Key insights
- The US and Croatia signed a protocol amending their income tax treaty to align with current US tax policies and address double taxation. The protocol awaits US Senate ratification. This is unlikely to have a significant impact on US equity markets.
Investing.com -- U.S. Ambassador to Croatia Nicole McGraw and Croatia’s Minister of Finance Ćorić signed a protocol on Tuesday amending the income tax treaty between the United States and Croatia. The ceremony took place on the margins of the Three Seas Initiative Summit in Dubrovnik.
The protocol amends the treaty that was signed on December 7, 2022, which marked the first income tax treaty between the two countries.
Ambassador McGraw stated that the protocol will allow the Trump Administration to transmit the tax treaty, together with the protocol, to the U.S. Senate for its advice and consent to ratification.
Treasury Assistant Secretary of Tax Policy Kenneth J. Kies said the protocol brings the 2022 tax treaty into conformity with current U.S. tax treaty policies.
The protocol includes three key amendments. First, it adopts a treaty-based definition of "active conduct of a trade or business" for Article 22 of the 2022 tax treaty. Second, it revises rules in Article 23 regarding U.S. obligations to provide relief from double taxation. Third, it amends Article 24 to coordinate with rules enacted in the One Big Beautiful Bill Act of 2025.
The protocol will be transmitted with the 2022 tax treaty to the U.S. Senate. The protocol will enter into force after both countries notify each other that they have completed their domestic procedures.
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