On 25 September 2026, the Croatian Parliament unanimously adopted the act ratifying the Convention between Croatia and the United States for the avoidance of double taxation. The Convention was signed in December 2022 and amended by a Protocol signed in Dubrovnik on 28 April 2026. It is the first comprehensive double-tax treaty between Croatia and the United States.
What benefits does the Convention provide?
The Convention regulates the taxation of income and profits of individuals and businesses connected with both countries. Key provisions include eliminating withholding tax on certain dividends paid to pension funds and on interest, reducing withholding rates on other dividends and royalties, and introducing anti-abuse rules governing access to treaty benefits.
It also provides mechanisms for resolving tax disputes, including mandatory binding arbitration, and for the exchange of information between the tax authorities.
When will it apply?
The Convention enters into force after both countries complete their domestic procedures and exchange formal notifications. In the United States, the treaty package was transmitted to the Senate on 14 September 2026 and referred to the Committee on Foreign Relations.
The exact application date will depend on the date of the later notification and the type of tax concerned. Until then, current rules continue to govern existing transactions and payments.
If you receive income, hold investments or conduct business between Croatia and the United States, our office can assess the Convention's future impact on dividends, interest, royalties, business profits and tax residence.
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