The first income tax treaty between New Zealand and Croatia entered into force on 4 November 2026, setting withholding tax limits of 5% on qualifying dividends and 10% on interest and royalties.
New Zealand’s Inland Revenue has announced that the income tax treaty with Croatia entered into force on 4 November 2026.
This follows New Zealand’s publication of the Double Tax Agreements (Republic of Croatia) Order 2026, which provides for ratification of its income tax treaty with Croatia on 24 August 2026.
The agreement, signed on 20 November 2025, aims to eliminate double taxation and prevent tax evasion and avoidance.
The treaty covers Croatia’s profit tax, income tax, and related surcharges, as well as New Zealand’s income tax. The treaty caps withholding tax at 5% on qualifying direct investment dividends where a company holds at least 10% of the relevant voting power or capital for 365 days, and 15% on other dividends. Interest and royalties are subject to a maximum withholding tax rate of 10% of the gross amount. These limits generally apply where the recipient is the beneficial owner, while income effectively connected with a permanent establishment is taxed under the business profits rules.
The agreement also clarifies beneficial ownership requirements, recognises certain pension funds, collective investment vehicles and non-profit organisations.
The treaty generally applies in Croatia from 1 January 2027 for withholding and other taxes. In New Zealand, it applies from 1 January 2027 for withholding taxes and from 1 April 2027 for other taxes.
