UK Tax Treaties With Croatia In Force

[crojoe]

Maybe this is good news or maybe bad news tax wise?

www.tax-news.com/news/UK_Tax_Treaties_With_Croatia_Bulgaria_In_Force____70149.html

[Ribaric]

I've read it three times now, not much the wiser TBH.

[Carol]

This is my (rather hazy) take on it.
If you are :-

a UK resident with a Croatian company
AND

you get an income via a dividend payment from that company

THEN

You'll be taxed at 5% in Croatia and the rest of the tax will be paid to the UK

However, if your Croatian doo owns a company and pays most of its income away in dividends, then Croatia is going to hold onto he first 15% and the Uk can have the rest.

[velebit]

Is this new tax/disclosure standard operational as of now,or next tax year or September2017( result of a quick google!).
Not received any formal notification from HMRC..is there a link anywhere which provides said information?
Are standard Croatian current accounts,which may bear interest ...in my case minimal kunas through Splitskabanka..affected by this and does this have to be declared?
Will Croatian banks issue annual tax certificates detailing interest paid for this purpose as is the case in the UK.
Any light which anyone can shed on this would be appreciated?

[Carol]

I thnk this answers some of your questions Velebit:-

In the UK, the 2015 treaty will take effect in respect of income tax and capital gains for any year of assessment beginning on or after April 6, 2016; and in respect of corporation tax, for any financial year beginning on or after April 1, 2016.

In respect of withholding taxes, the new treaty became effective for amounts paid or credited on or after January 1, 2016.

- See more at: www.tax-news.com/news/UK_Tax_Treaties_With_Croatia_Bulgaria_In_Force____70149.html#sthash.DlnMNthI.dpuf

[Carol]

velebit, I am impressed that HMRC take time to write to you personally to let you know that tax laws have changed that may effect you. They just expect me to find out all by myself and ignorance isn't a defence.

I googled and found this which may help, althought its written in the usual legalese:-
www.gov.uk/government/uploads/system/uploads/attachment_data/file/490737/2015-croatia-UK-double-taxation-agreement.pdf

[Ribaric]

Thanks for this Carol. Trouble is, the more I read, the more confused I get. I've decided to sit and wait and see what happens. Pathetic I know but .... :-(

[Carol]

does this help:
www.gov.uk/government/publications/non-residents-relief-under-double-taxation-agreements-hs304-self-assessment-helpsheet/hs304-non-residents-relief-under-double-taxation-agreements-2015


It seems to say, if you live in the UK, then Croatia only gets to keep 5% - 15% of Croatian earnings on Croatian assets and the Uk takes the rest.
If you live in Croatia, but have an income from the uk, then the UK takes 5% - 15% and Croatia gets the rest, as long as you fill in the right form and send it to the UK government.

[Ribaric]

Jan 17, 2016 13:26:29 GMT 1 Carol said:

does this help:
www.gov.uk/government/publications/non-residents-relief-under-double-taxation-agreements-hs304-self-assessment-helpsheet/hs304-non-residents-relief-under-double-taxation-agreements-2015


It seems to say, if you live in the UK, then Croatia only gets to keep 5% - 15% of Croatian earnings on Croatian assets and the Uk takes the rest.
If you live in Croatia, but have an income from the uk, then the UK takes 5% - 15% and Croatia gets the rest, as long as you fill in the right form and send it to the UK government.

Is isn't very clear about UK pensions paid to residents of Croatia. Unless you can decypher it?

[Carol]

Without reading it, I'd have thought it would mean UK keeps 5% tax and Croatia gets the rest. So, let's say Cro tax is 59%. Then You pay 59% in total, but Cro only gets 54% and UK gets 5%.

You need a tax adviser.

[crojoe]

Jan 18, 2016 10:37:47 GMT 1 Carol said:

Without reading it, I'd have thought it would mean UK keeps 5% tax and Croatia gets the rest. So, let's say Cro tax is 59%. Then You pay 59% in total, but Cro only gets 54% and UK gets 5%.

You need a tax adviser.

In short only accept cash payments! LOL!

[Ribaric]

An update on CroJoe's post.
The income tax agreement between the UK and Croatia, as far as it concerns UK pensioners living here in HR, seems to be that HR residents must pay the Croatian rate of tax but the UK gets the first 12%, HR gets the rest. The reverse is also true but I doubt any HR pensioners are living in the UK, they'd have starved by now. No word about those with "temporary residence" visas.