Global minimum corporate income tax and its impact on the financial statements for 2024

The Global Minimum Corporate Income Tax Act (Official Gazette No. 155/2023) (“the Act”) has been in force since 31 December 2023 and is based on the provisions of Council Directive (EU) 2022/2523 of 14 December 2022 (the so-called “Pillar 2” Directive).

This tax sets a minimum tax rate of 15 %, which must be paid by large corporations. The subjects of the Act are multinational enterprise groups (MNEs) and large-scale domestic groups that generate revenues exceeding EUR 750 million on a consolidated basis in two of the previous four years.

During the transitional period (for financial years starting no later than 31 December 2026, but not including financial years ending after 30 June 2028), it will be possible to use transitional simplified safe harbour rules. This possibility has been introduced due to the complexity of the regulations, which requires MNEs to invest significant resources to comply with the new rules and develop appropriate compliance and reporting systems.

Taxpayers in the Republic of Croatia will be required to file a top-up tax information return and a tax return for fiscal years beginning after 31 December 2023 (effective from 2024 onwards). The first tax returns regarding top-up tax for 2024 should be filed by the end of June 2026 (after that, no later than 15 months from the end of the fiscal year).

Although the deadlines for formally filing tax returns are set for 2026, the possible effect of the tax calculated according to the GloBE rules for 2024 should be shown already in the financial statements for 2024, in accordance with accounting standards. Given that the application of these rules can significantly affect the tax position of companies, it is crucial to timely assess the potential liability and ensure its accurate recording and reporting in the financial statements as early as 2024.

Our experts are at your disposal for any additional questions regarding the global minimum tax, helping you understand the legal provisions, assessing the impact of Pillar 2, and providing support in analysing administrative obligations related to reporting and calculating the global minimum corporate income tax liability.