In line with the most recent amendment to the EU list of non-cooperative jurisdictions for tax purposes, the number of countries whose residents (legal entities) are subject to a higher withholding tax rate has been amended.
The EU list of non-cooperative jurisdictions for tax purposes has been changed as follows: Antigua and Barbuda, Belize and Seychelles have been added to the EU list of non-cooperative jurisdictions for tax purposes and the British Virgin Islands, Costa Rica and the Marshall Islands have been removed from the list of non-cooperative tax jurisdictions.
The new list is effective as of 17 October 2023 and comprises a total of 16 countries, namely: American Samoa, Antigua and Barbuda, Anguilla, Bahamas, Belize, Fiji, Guam, Palau, Panama, Russia, Samoa, Seychelles, Trinidad and Tobago, Turk and Caicos Islands, the US Virgin Islands and Vanuatu.
The list became official as of 23 October 2023, upon publication in the Official Journal.
Legal entities residing in all other countries from the List, except for the countries having a Double Taxation Treaty with Croatia, remain subject to a higher withholding tax rate of 25% on all remunerations payable under Article 31 of The Profit Tax Act (including dividend and interest). Interest payments arising from bonds remain tax exempt.
Impact on investors: The number of countries whose residents (legal entities) are subject to a higher withholding tax rate has been amended.
Related Newsflash: Changes to withholding tax rates approved by Croatian Parliament