janan
Junior Member
Posts: 18 
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Post by janan on Jul 16, 2012 23:34:05 GMT 1
Hello, I am currently in the process of selling a croatian house I own through a company, and am trying to figure out a sale price.
according to the estate agent, if we sell the house to someone who wants to buy it with the company, we get the full amount of the sale price (minus their fee of course!), but if we sell to someone who only wants to buy the house, we have to pay 20% tax on the sale price. This is completely new information to me, does anyone know if this is correct?
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Post by usplitu on Jul 16, 2012 23:39:41 GMT 1
That would be your corporate profit tax.
If you have bought your property through a company - you will have to pay 20% on the difference between you purchase price and your sale price (i.e. your profit). Your company accountant should also have been recording your costs on your books and this may reduce the amount of profit you have made and therefore reduce your profit tax.
First port of call should be your accountant .....
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janan
Junior Member
Posts: 18
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Post by janan on Jul 17, 2012 0:02:41 GMT 1
Thank you, much appreciated! I'll contact my accountant, but I don't hold out much hope of getting any kind of helpful reply  |
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Post by Carol on Jul 17, 2012 7:58:35 GMT 1
Unfortunately its more likely to be the tax office's estimation of the sale price, not the actual sale price.
For some reason the tax people have not heard that there is a recession and seem to think that property prices have been steadily rising these last 5 years.
So the profit will be estimated to be higher than you report and therefore the 20% sale tax will be much higher too. On the upside, you can offset the agent's fee against this profit.
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janan
Junior Member
Posts: 18
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Post by janan on Jul 17, 2012 8:47:30 GMT 1
Cripes! Thanks Carol
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Post by Madgolfer on Jul 17, 2012 16:48:58 GMT 1
It might be in your interest to sell the company and avoid paying tax altogether. And then set up another company if you need to.
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Post by Carol on Jul 17, 2012 18:34:26 GMT 1
It might be in your interest to sell the company and avoid paying tax altogether. And then set up another company if you need to. It makes a lot of sense but buyers just don't want the complication IME. |
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Post by zvekov on Jul 20, 2012 7:21:58 GMT 1
Hi janan the answer to your question is no. It's not correct. Usplitu, has explained in more detail and your accountant really should have a fair go at explaining these issues to you-ask the accountant to do a simulation for you.
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Post by stevejames on Nov 5, 2012 10:45:43 GMT 1
It is a profit tax on the building but one thing is very surprising that 20 percent ratio is too high.I think in this way we just make the people unwilling to invest in properties.Its really surprising.
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Post by Madgolfer on Nov 5, 2012 13:38:24 GMT 1
20 percent ratio is too high
What is the profit tax rate in other EU countries?
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Post by mh on Nov 7, 2012 3:59:39 GMT 1
I suggest you contact your accountant and ask ... You can sell the company (that is the holding company for your property or make your company to sell the property to the third party and company to receive the proceedings of the sale). Both routes have their advantages or disadvantages ... It would also depend on the buyer. You also need to pay the appropriate tax in your country, of course. Any route you choose, you pay tax only on your profit, not the price you sell for. So, you can declare a loss ... but you are not entitled to any refund.
Play fair - pay tax! That is the old and simple slogan to all foreign investors in Croatia. In my personal opinion, 20% company tax is a bargain, introduced by the bad Croatian governments. 30% is the right number, but that is up to Croatian people to change, sooner - better.
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