Croatia

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

Croatia also 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.

As of 1 January 2023, 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).  As of 1 January 2023, 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, entered into force in Croatia on 1 June 2021. The Croatian MLI covers 66 double taxation treaties (DTTs).

In December 2022, the United States 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 Hong Kong in January 2024, but this agreement has not yet entered into force.  New agreements with Andora, Cyprus and Egypt have been ratified any came 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 came into force as of 31 December 2023, and applies to the fiscal years commencing after 31 December 2023.