DT5253 - Double Taxation Relief Manual: Guidance by country: Croatia: Treaty summary
The table summarises the provisions of the treaty in force. Where a percentage rate is shown, this rate is the ‘treaty rate’ and does not reflect taxes chargeable under the domestic law of either state before relief is given under the provisions of the treaty. The ‘treaty rate’ is the maximum rate at which the UK and Croatia are permitted to tax income in the relevant categories under the treaty. Rates chargeable under the domestic law of either state may be higher or lower.
In all cases other conditions for relief (e.g. beneficial ownership) will have to be met before relief is due under the treaty. The text of the treaty can be found on gov.uk.
| Subject | Comments | Article |
|---|---|---|
| Portfolio dividends | 10% (Note 1) | 10 |
| Dividends on direct investments | 5% (Note 2) | 10 |
| Conditions for lower rate on dividends on direct investments | The beneficial owner must be a company resident in the other state | 10 |
| Property income dividends | 15% | 10 |
| Interest | 5% (Notes 3 and 4) | 11 |
| Royalties | 5% (Note 4) | 12 |
| Government pensions | Taxable only in Croatia, unless the individual is a resident of, and a national of, the UK | 18 |
| Other pensions | Taxable only in the UK (Note 5) | 17 |
| Arbitration | No | N/A |
Note 1: Dividends beneficially owned by a pension scheme are taxable only in the state in which the pension scheme is resident.
Note 2: Under the EU Parent Subsidiary Directive, dividends beneficially owned by a company resident in the UK that has held at least 10% of the capital of the Croatian company paying the dividend for an uninterrupted period of at least 24 months are exempt from tax in Croatia.
Note 3: Interest is taxable only in the state of residence of the beneficial owner where such interest is paid:
- in connection with the sale on credit of any industrial, commercial or scientific equipment
- in connection with the sale on credit of any merchandise by one enterprise to another enterprise
- on any loan of whatever kind granted by a bank
Note 4: Interest and royalties paid by a Croatian company to an associated UK company will be exempt under the terms of the EU Interest and Royalties directive where the conditions of the Directive are met.
Note 5: Lump-sum payments derived from a pension scheme established in Croatia are taxable only in Croatia.