Croatia moves to eliminate double taxation with Australia and New Zealand

ZAGREB, 11 March 2026 – Croatia has begun the process of ratifying two important international agreements aimed at eliminating double taxation with Australia and New Zealand, a move expected to benefit citizens, businesses and wider economic cooperation.

The Ministry of Finance and Croatia’s Tax Administration have launched the procedure to confirm agreements between Croatia and both countries on the avoidance of double taxation on income and the prevention of tax evasion and tax avoidance.

The goal of the ratification process is to incorporate the agreements into Croatia’s domestic legal framework and create the conditions for their entry into force as soon as possible, the Ministry said in a statement.

Agreements signed in 2025

Until now, the issue of double taxation between Croatia and the two countries had not been formally resolved.

To strengthen economic ties, negotiations were initiated and successfully concluded in recent years.

Talks with Australia took place during 2024, with the agreement signed in Canberra on 24 November 2025. Negotiations with New Zealand followed in 2025, with the agreement signed in Wellington on 20 November 2025.

Once Croatia completes the ratification process, it will notify both countries. If Australia and New Zealand also ratify the agreements in their respective parliaments and inform Croatia by the end of 2026, the agreements are expected to come into force on 1 January 2027.

Key benefits for citizens and businesses

The agreements aim to simplify taxation rules for cross-border income while encouraging stronger trade and economic activity between Croatia, Australia and New Zealand.

Among the most important provisions are:

Clear residency rules
The agreements define tax residency to ensure Croatian residents, both individuals and companies, are not taxed twice on the same income while also preventing tax avoidance.

Recognition of investment and pension entities
Pension funds, investment funds, collective investment entities and non-profit organisations will be recognised as residents under the agreements and will benefit from reduced tax rates on income such as interest, dividends and royalties.

Lower withholding tax rates
The agreements significantly reduce withholding tax rates on dividends, interest and royalties compared with current domestic tax rates in Australia and New Zealand.

For example:

• Under the Croatia–Australia agreement

◦ Dividends: 0%, 5% or 10%

◦ Interest: 0% or 10%

◦ Royalties: 10%

• Under the Croatia–New Zealand agreement

◦ Dividends: 5% or 15%

◦ Interest: 10%

◦ Royalties: 10%

These reduced rates will replace the significantly higher domestic rates currently applied in both countries, providing notable tax relief for Croatian citizens and companies receiving income from Australia or New Zealand.

Benefits for construction companies
Croatian construction and related firms will not be required to pay corporate tax in Australia if projects last less than nine months, or in New Zealand if projects last less than 12 months.

Shipping and aviation rules
Croatian airline and shipping companies operating international transport between Croatia and Australia or New Zealand will pay tax on profits exclusively in Croatia. However, certain profits generated within those countries may still be taxable locally.

Pensions
Pensions paid from Australia or New Zealand to residents of Croatia will be taxed in Croatia.

Special provisions also apply to pensions paid from Croatian government funds for services rendered to Croatia.

Equal treatment and dispute resolution
Croatian citizens and companies will receive the same tax treatment as local residents in Australia and New Zealand, ensuring non-discrimination.

They will also have access to a mutual agreement procedure, allowing tax authorities from the countries involved to resolve double taxation disputes directly.

Improved tax transparency
The agreements include mechanisms for the exchange of tax information between authorities, strengthening efforts to combat tax evasion.

By eliminating double taxation barriers, the agreements are expected to encourage greater trade, investment and business cooperation between Croatia and the two Pacific nations.

The move is particularly significant for the large Croatian diaspora in Australia and the growing economic connections with both countries.

If the ratification process proceeds as planned, the new tax framework could be in place from 2027, providing clearer and more favourable tax conditions for individuals and companies operating between the three countries.