Croatian Minister of Finance, Boris Lalovac and US Ambassador in Croatia, Kenneth Merten, signed an agreement between the two governments on the implementation of the Law on execution of tax obligations with respect to accounts in foreign financial institutions, "Foreign Account Tax Compliance Act" (FATCA) to enhance transparency between the two countries in the field of taxation. These agreements are evidence of the growing international cooperation in combating tax evasion worldwide.
Based on FATCA agreement between the US and Croatia, financial institutions in Croatia are obliged to submit to the Croatian Tax Administration data on US account holders which will be further forwarded to the IRS. The IRS will also inform the Tax Administration of the Croatian account holders in the United States.
Impact on investors: Mutual assistance in tax matters based on an effective infrastructure for the automatic exchange of information between Croatia and US.