This agreement aims to eliminate double taxation on income and prevent tax evasion and avoidance between the two countries.
Australia and Croatia signed a new income tax treaty on 24 November 2025.
This agreement aims to eliminate double taxation on income and prevent tax evasion and avoidance between the two countries.
The treaty sets dividend withholding tax at 5% for companies holding at least 10% voting power (otherwise 10%), with a full exemption available for certain government bodies, central banks, and qualifying pension or superannuation funds that hold under 10% and lack control over the payer.
Interest is generally taxed at 10%, but exemptions apply for similar exempt entities and unrelated regulated financial institutions, except where the recipient can influence the issuer or the payment involves back-to-back loan arrangements.
Royalties are subject to a flat 10% rate.
The treaty will take effect once both countries exchange ratification instruments and will apply from the start of the next calendar or tax periods: from 1 January in Croatia, and in Australia from 1 January for withholding taxes, 1 April for fringe benefits tax, and 1 July for all other taxes.
Earlier, Croatia’s Ministry of Finance announced that the delegations of Croatia and Australia had completed negotiations for an income tax treaty on 25 October 2024.
