CRO GOVT. : BILLS ON INCOME AND PROFIT TAX FORMULATED

ZAGREB, Oct 19 (Hina) - The Croatian government on Thursday forwarded to the parliament's procedure bills on profit tax and income tax, which foresee a decrease in the profit tax rate, the introduction of a third income tax rate, tax relief for employers who will offer new jobs, and the obligation to report greater property and the source of funds the property was bought for. The bill on profit tax defines profit as a difference between income earnings and expenditure. The decrease of the profit tax rate from 35 to 25 percent foresees a 3.5 percent protection interest rate, and a decrease of tax base for the value of purchased equipment and donations, up to two percent of the total income. The bill also proposes the decrease of the base for profit tax for one year for employers hiring new employees, and up to three years for those hiring disabled persons. The bill on income tax foresees the introduction of three income tax rates (15, 25 and 35 percent), and taxing the dividend by a 15 percent rate. The bill also foresees an obligation for persons with property of greater value to submit data on their property (with the balance registered on December 31, 2000) to the tax administration by late February 2001. Along with data on property, they should also submit data on sources of funds for the purchase of the property as well as evidence which would prove they paid taxes for the funds. New legal regulations on income and profit tax would come into force as of early next year, however, they would refer to this year as well, Croatian Finance Minister Mato Crkvenac said. The government also forwarded to the parliament a bill on tax counselling service. (hina) it jn