Croatia has officially gazetted its new income tax treaty with Australia, which caps withholding taxes on dividends, interest, and royalties at 5-10% and will take effect from 1 January following the exchange of ratification instruments.
Croatia has gazetted the law ratifying the income tax treaty with Australia on 15 May 2026.
Signed on 24 November 2025, the agreement between the two countries is intended to eliminate double taxation on income and to prevent tax evasion and avoidance.
The treaty establishes maximum withholding tax rates on cross-border payments: dividends are generally capped at 10%, reduced to 5% for companies holding at least 10% voting power for 365 days, or exempt for government entities and pension funds under certain conditions; interest is limited to 10% but exempt when paid to governments, central banks, pension funds, or unrelated financial institutions; and royalties are capped at 10% of the gross amount.
It will enter into force once the instruments of ratification have been exchanged. It will apply in Croatia from 1 January of the year following its entry into force, and in Australia for withholding taxes from 1 January following its entry into force.
Earlier, Croatia’s parliament approved legislation that ratified the pending income tax treaty with Australia on 30 April 2026.
