Croatia and the United States are removing tax barriers to boost economic cooperation between the two countries. The announcement was made on Thursday during a government meeting, where a decision was made to send the final draft of the law to the parliamentary procedure. This law ratifies the convention between the Government of the Republic of Croatia and the Government of the United States of America on the avoidance of double taxation in relation to income tax.
The draft law submitted to the Croatian Parliament includes a supplementary protocol that amends and supplements the convention. While the convention was signed in Washington on 7 December 2022, the protocol was concluded later, on 28 April 2026, in Dubrovnik. The US side considered that the provision on the method of avoiding double taxation in previous US agreements was more favourable to US businesses than the one contained in the original convention, which led to the need for amendments.
The Deputy Prime Minister and Minister of Finance, Tomislav Ćorić, highlighted that the entry into force of this convention and protocol would result in numerous benefits in the taxation of all types of income. According to him, this legal framework will significantly improve the conditions for increasing the exchange of goods and services between the two states.
The ratification process requires reciprocity, meaning that after the Republic of Croatia ratifies the convention and protocol, the United States must do the same. Only after both sides have completed their internal procedures will the new rules governing tax obligations come into effect.
Alongside this step towards the US, the government has simultaneously decided to initiate the process for concluding an agreement with Tajikistan. The aim of this agreement is to eliminate double taxation on income and property, thereby expanding the network of international tax agreements of the Republic of Croatia.
