Further to our previous Newsflash on decrease of Croatian withholding tax on dividend from the rate of 12% to 10%, the same amendments of The Income Tax Act prescribe the decrease of the capital gain tax and withholding tax on interest applicable to domestic and foreign individuals. Consequently, currently applicable tax rates will be decreased for both from the rate of 12% to 10%, effective as of 1 January 2021.
Lower capital gain tax is applicable to tax period of 2021, with the annual capital gain reporting obligation by 31 January 2022. Interest from bonds remains tax exempted.
Impact on investors: Lower rates (10%) for capital gain tax and withholding tax on interest for individuals to become effective as of 1 January 2021.
Related Newsflashes: Decrease of Croatian withholding tax