Tax Administration: One Wrong Letter – 10,000 Kuna Fine

Total Croatia News

The war against entrepreneurs continues.

The war which the Tax Administration is conducting against small business owners is getting worse by the day. There are more and more bizarre stories about huge penalties businesses have to pay for minor mistakes, reports on December 5, 2017.

After a recent story about a baker who, due to having one letter missing in his forms and 85 kunas in the cash register more than was supposed to be there, received a fine of 60,000 kunas, there is a new example, a decision by the Tax Administration that a sole proprietorship owner has to pay 10,000 kunas in penalties due to “incorrect” business premises code written on her receipts.

The decision explains that, “…on the above mentioned receipt… from 10 November 2017 in the amount of 30,00 kunas, the designation of the business premises is listed as P1, while the Ministry of Finance has the same premises registered as p1, which means that the business premises P1 have not been registered with the Ministry of Finance and the Tax Administration.”

In short, the invoice had the code in an uppercase letter, while the Tax Administration’s database has the same code in a lowercase letter. They came to the conclusion that the business premises had not been reported and the penalty for this offence range from 10,000 to 300,000 kunas.

Obviously, such high penalties for common mistakes can bring many businesses to the verge of bankruptcy. The question is how many jobs have already been lost due to such fines.

The Croatian Accounting Initiative has sent several letters to the Ministry of Finance and has tried to get them to include in the electronic tax system a warning if the wrong code for business premises is used, but they have not received any response. The reason is very likely the fact that it is in the interest of the Ministry of Finance to charge such massive penalties and fill the budget.

“We have asked them to include a notice in the software if there are mistakes with the codes. We have examples where inspectors order entrepreneurs to pay penalties because they use codes such as, for example, P2 and 2. And the fine for this offence is 30,000 kunas. In this particular case, all receipts have been registered in the Tax Administration system; they just have the wrong code. There has been no financial damage for the state, but the penalty is still huge and disproportionate to the ‘misdemeanour’ which occurred. By a small change in the software, the situation would quickly be resolved, and such astronomical fees would no longer have to be paid. There is always a possibility of making a mistake, because business premises codes are usually registered by accountants, while the designation of the same business premises in the cash register software is written by developers, who often communicate by phone, and errors easily happen,” said Vesna Varšava from the Croatian Accounting Initiative.

Translated from


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