Croatia's parliament ratifies the country's first-ever income tax treaty with Australia, introducing reduced withholding tax rates of 5-10% on dividends, 10% on interest and royalties. The agreement, signed in November 2025, aims to eliminate double taxation and prevent tax evasion between the two nations.
Croatia’s parliament has approved legislation that ratified the pending income tax treaty with Australia on 30 April 2026.
The treaty is the first of its kind between the two countries and follows an agreement between Croatia and Australia on the elimination of double taxation with respect to taxes on income and the prevention of tax evasion and avoidance, which was signed in Canberra on 24 November 2025.
The agreement sets lower withholding tax rates for income earned across borders. Dividend taxation will be 5% for companies that own at least 10% of voting rights for 365 days, while other cases face a 10% rate. Both interest and royalties will be taxed at 10%.
The treaty will come into force upon the exchange of ratification instruments and will apply in Croatia from 1 January of the year following its entry into force, while in Australia it will take effect from the next 1 January for withholding taxes, 1 April for fringe benefits tax, and 1 July for other taxes.
