In line with the most recent amendment to the EU list of non-cooperative jurisdictions for tax purposes, the list of countries whose residents (legal entities) are subject to a higher withholding tax rate has been extended with the British Virgin Islands, Costa Rica, Marshall Islands and Russia.
The new List effective as of 14 February 2023 comprises total of nine countries, namely: American Samoa, Anguilla, Bahamas, the British Virgin Islands, Costa Rica, Fiji, Guam, Marshall Islands, Palau, Panama, Russia, Samoa, Trinidad and Tobago, Turk and Caicos Islands, the US Virgin Islands and Vanuatu.
This list became official as of 21 February 2023, upon the publication in the Official Journal.
Legal entities resident in all other countries from the List (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: For information purposes