In line with the most recent amendment of the EU list of non-cooperative jurisdictions for tax purposes, the number of countries whose resident legal entities are subject to a higher withholding tax rate has been amended.
EU list of non-cooperative jurisdictions for tax purposes has been changed as follows: Anguilla, Dominica and Seychelles have been removed from the list of non-cooperative tax jurisdictions.
These countries are now included in the “State Of Play” document, which covers jurisdictions that do not yet fully comply with all the international tax standards but have committed to implement tax good governance principles. Added to this document are also Costa Rica, Hong Kong, Malaysia, North Macedonia, Qatar and Uruguay, while Australia, Eswantini and Maldives implemented all the necessary tax reforms and are therefore removed from the “State Of Play” document.
The new List effective as of 05 October 2021 comprises total of nine countries, namely: American Samoa, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, the US Virgin Islands and Vanuatu.
The list has become official as of 12 October 2021, upon the publication in the Official Journal.
Legal entities resident in all other countries included in the List, except for Oman (having a Double Taxation Treaty with Croatia and thus granting a statutory withholding tax rate of 12%), remain 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 tax exempt.
Impact on investors: The number of countries whose resident legal entities are subject to a higher withholding tax rate has been amended