Croatia adopts new law making it harder to hide income, offshore assets and crypto

Zagreb

ZAGREB, 11 December 2025 (Hina) – From today, anyone living in Croatia will find it significantly harder to conceal income, assets or transactions carried out through offshore companies, crypto holdings or digital platforms.

Croatia’s amendments to the Law on Administrative Cooperation in Taxation entered into force on 11 December, giving tax authorities wider powers and access to detailed information shared automatically with other European Union members.

The legislation aligns Croatia with two key EU directives –2023/2226, focusing on the exchange of information on crypto-assets and financial accounts, and 2025/872, which strengthens cooperation and reporting obligations for digital platforms.

The result is a more unified European approach to tax transparency.

The enhanced system covers income, financial accounts, crypto transactions, platform-based revenues and data exchanged through international agreements beyond the EU.

The reform significantly expands the scope of information that EU countries must share. Required reporting now includes crypto-asset activity, with Croatia’s Tax Administration, the Ministry of Finance and the Customs Administration taking on new oversight duties, particularly in monitoring crypto-related services.

Financial institutions, banks and digital platforms must now collect and retain more detailed data on users, including information on crypto purchases, sales and transfers, as well as dividends, interest and other financial income.

Ownership details, residency status and account structures must also be reported.

These records are submitted to Croatia’s Tax Administration, which may request further clarification and levy penalties if reporting obligations are ignored.

Data relating to residents of other EU member states will be passed on automatically to their respective tax authorities. For example, a Croatian resident trading on a German crypto platform will have their details sent from Germany to Croatia as part of this system.

The expanded information-exchange framework is one of the EU’s main instruments in combating tax evasion, money-laundering and the financing of terrorism.

The European Parliament notes that crypto assets, still a young but transformative sector, pose particular challenges for tax authorities, given the ease and speed with which capital gains can be realised.

Finance-industry experts broadly welcome the reforms, saying they will bring stability, clearer rules and increased transparency to the crypto sector.

They advise investors to ensure all gains and income are properly reported, stressing that tax authorities will eventually detect undeclared assets.

Concerns Among Crypto Traders

Within the crypto community, criticism centres on fears that the new framework does not cover the entire crypto ecosystem and may impose excessive regulatory burdens. Smaller investors worry that strict obligations could make crypto investing impractical or less attractive.

A study by the independent EU Tax Observatory found that more than 70% of crypto investors currently do not report income, highlighting the challenges faced by tax authorities and the need for coordinated EU action.

Fully effective implementation is expected within a year due to the technical and logistical complexity of processing vast amounts of financial and digital-asset data. Analysts suggest that the real impact—both on tax revenue and the size of the grey economy, will only become clear once the first large wave of reports is processed in 2027.

The European Parliament has long advocated greater oversight of crypto markets, and reports calling for regulation have repeatedly received broad support, even among political groups usually cautious about EU-driven harmonisation.

Croatian MEP Stephen Nikola Bartulica (ECR), who sits on the Parliament’s Economic and Monetary Affairs Committee, offers conditional backing for the reform. He stresses that while crypto cannot remain outside the tax system, such measures must not become a backdoor to excessive financial surveillance.

He notes that a unified framework such as DAC8 can reduce fragmentation, close loopholes and ensure fair competition between compliant firms and those avoiding reporting.

However, he warns that the measures will only remain acceptable to conservatives if they do not lead to mass data monitoring, raise costs for small users or burden businesses with heavy compliance demands.

“If compliance becomes too expensive or legally uncertain, we risk driving innovation and jobs out of the EU without guaranteeing higher tax revenue,” Bartulica cautions.

Even so, he views the reform as potentially positive if implemented with strong safeguards. Clear rules could reduce abuses and provide a more predictable environment for serious market participants.

He also calls for regular parliamentary scrutiny of how DAC8 data is used, including assessments of its impact on civil liberties and the competitiveness of Europe’s digital-asset sector.