The UK and Croatia on January 15 signed a tax treaty in Zagreb, the UK’s HM Revenue and Customs has announced. The treaty would replace the UK/Yugoslavia Double Taxation Convention which both countries are currently honoring. That treaty was signed in 1981.
The new treaty reduces withholding tax rates on dividends from 15 percent to 10 percent for companies controlling less than 25 percent of the capital of the company paying the dividend and for portfolio investors. For companies controlling more than 25 percent of capital, the withholding rate remains at 5 percent. Withholding on interest is reduced from 10 percent to 5 percent, with zero withholding for banks. Withholding on royalties is set at 5 percent.
The treaty will enter into force once both countries have completed their legislative procedures.
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