At a recent seminar on Croatian companies entering the US market, the US Ambassador to Croatia, Nathalie Rayes, announced that the anticipated tax treaty between Croatia and the US could be ratified within 2025.

“More than a hundred American companies are already operating in Croatia, creating thousands of jobs. The cooperation and friendship between the USA and Croatia have only grown over the years. We have removed visas, but the challenge of double taxation remains, which mostly affects the operations of small and medium enterprises. We are currently waiting for the U.S. Senate to ratify the Treaty. With our efforts and the support of the business community, I believe that we could close this matter to the satisfaction of Croatian and American entrepreneurs next year.” said Nathalie Rayes, the US Ambassador to Croatia.

The US is the largest market for Croatian IT companies and this sector is expected to benefit the most from the elimination of double taxation. Other sectors to benefit from the elimination of double taxation are the pharmaceutical, defence, and food products.

“The USA is among the top ten most significant export markets for Croatia and the eleventh most significant trade partner overall. The elimination of visas for U.S. holders of Croatian passports was a significant step in strengthening bilateral relations. However, we are still awaiting the abolition of double taxation. The agreement was signed almost two years ago, and with its enactment, we expect to see a reduction in business and administration costs and attract more direct investments, especially in the IT sector,” stated Luka Burilović, President of the Croatian Chamber of Economy (HGK). 

The US and Croatia signed an income tax treaty on 7 December 2022, the first between the two nations.

The treaty will take effect upon the exchange of ratification instruments and will apply for withholding taxes from the first day of the second month following its entry into force and for all other taxes from January 1 of the subsequent year.