Following the recent approval by the Croatian Parliament the new laws on income and profit taxation have been published in the latest issue of the Official Gazette of the Republic of Croatia. The new laws will come into force on January 1st, 2005.
Pursuant to our previous notifications, as of January 1st, 2005, dividend income – irrespective of the domicile of investor – will no longer be seen as an income and, accordingly, no taxation will be applied. The exception will be dividends paid from a company’s profits that have been earned in the period between January 1st, 2001, and December 31st, 2004. Those will be subject to the withholding tax rate in accordance with the provisions of the Income Tax Law prevailing at the time of profit attribution – thus, a tax rate of 15% will be applied, according to a BA-CA news flash.
The taxation of interest on government and corporate fixed income securities that re paid to non-resident investors remain to be tax free.