As publicly announced in the Official Journal of the European Union, European Council found United Arab Emirates as compliant with all its commitments and removed it from the EU list of non-cooperative jurisdictions for tax purposes (List) completely. Marshall Islands have been moved from the black list to grey list. Compared to the version of the List as of 21 June 2019, the new List effective as of 17 October 2019 comprises total of nine countries, namely: American Samoa, Belize, Fiji, Guam, Oman, Samoa, Trinidad and Tobago, US Virgin Islands and Vanuatu.
Consequently, legal entities resident in all other countries from the List, except for Oman (having a Double Taxation Treaty with Croatia and thus granting a statutory withholding tax rate of 12%), remain to be subject to a higher withholding tax at the rate of 20% on all remunerations payable under the Article 31 of The Profit Tax Act (including dividend and interest). Interest payments arising from bonds remain to be tax exempt.
Impact on investors: The number of countries whose residents (legal entities) are subject to a higher withholding tax rate has been additionally reduced.
Related Newsflashes: New amendment to EU list of non-cooperative tax jurisdictions