Croatia

Croatia adjusted its legislation to mandatory European Union (EU) Directives (ATAD I and ATAD II) within the Corporate Income Tax (CIT) Act provisions in relation to exit taxation and hybrid instrument rules.

Croatia implemented the Council Directive 2018/822 of 25 May 2018 amending Directive 2011/16/EU in relation to reportable cross-border arrangements (DAC6) through the Act on administrative cooperation in the field of taxation and Rulebook on the automatic exchange of information in the field of taxation.

Croatia modified its legislation in accordance with Council Directive 2021/514 regarding administrative cooperation in the field of taxation in relation to reporting of digital platforms (DAC7). Platforms operators have the obligation to report the sale of goods, rental of any mode of transport, provision of personal services, and rental of immovable property to the Tax Administration.

The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) negotiated within the Organisation for Economic Co-operation and Development (OECD)/G20, which modifies bilateral tax treaties in order to eliminate double taxation, is also implemented in Croatian legislation.

In December 2022, the United States (US) and Croatia signed a DTT. The new tax treaty will enter into force after both countries have notified each other that they have completed their requisite domestic procedures. Croatia also signed a DTT with Australia in October 2024, Saudi Arabia in December 2024 and with Liechtenstein in January 2025, but these agreements have not yet entered into force. New agreements with Hong Kong and Egypt have been ratified and entered into force.

Croatia has introduced Pillar Two rules into Croatian legislation. According to the Act on minimum Global CIT, the Croatian Pillar Two rules are in line with the Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union. The Act entered into force as of 31 December 2023 and applies to the fiscal years commencing after 31 December 2023.