In line with the most recent amendment to the EU list of non-cooperative jurisdictions for tax purposes, number of countries whose residents (legal entities) are subject to a higher withholding tax rate has been additionally amended.
As publicly announced in the Official Journal of the European Union, EU list of non-cooperative jurisdictions for tax purposes has been expanded by moving Cayman Islands, Palau and Seychelles from grey to black list. Panama was also added to the black list.
The new List effective as of 27 February 2020 comprises total of twelve countries, namely: American Samoa, Cayman Islands, Fiji, Guam, Oman, Palau, Panama, Samoa, Seychelles, Trinidad and Tobago, US Virgin Islands and Vanuatu.
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 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 expanded.