Finance Minister Slavko Linic said that the amendments were bringing three important changes -- the possibility of publishing a list of tax debtors, the institute of piercing the corporate veil, and the possibility of debt clearance through the takeover of property.
"The main reason for the proposed amendments are enormous claims by the Croatian state, given that the overall debt with interest exceeds 50 billion kuna," Linic said, adding that the number of debtors exceeds 761,000, of whom about 500,000 are private citizens and the rest are companies and small enterprises.
The list of tax debtors could not have been published before because it was considered a tax secret. Now the Tax Administration can make public all details of a taxpayer without their consent, provided that it is in accordance with the law or if the taxpayer provides incorrect data about their debt.
The list will be published on the Tax Administration's website, including the names of 15,800 companies with debt exceeding 100,000 kuna, 31,000 small businesses with debt exceeding 50,000 kuna, and 85,000 citizens with debt exceeding 10,000 kuna.
The list will also include the names of taxpayers that have been granted payment deferral, payment in instalments or whose debt has been rescheduled.
"In that way we want to strengthen the financial discipline and improve the collection of debt payments," Linic said.
According to figures from the Tax Administration, from the moment the publication of the list was announced the collection of tax payments has improved by three per cent.
The institute of piercing the corporate veil is being introduced in order to prevent the widespread practice of opening new limited liability companies to evade paying contributions to the state and the workers or to use them for siphoning off funds. "We want to prevent operations through companies affiliated in that way, the transfer of profit and loss, and in particular the issuing of fictitious bills," Linic said.
Management board members who are found to have caused damage to their company and creditors as a result of their illegal actions, as well as the founders of a limited liability company and the shareholders of a joint stock company face the possibility of having their property seized.