United States, Croatia Sign Protocol to Income Tax Treaty

WASHINGTON- Today, in a ceremony held on the margins of the Three Seas Initiative (3SI) Summit in Dubrovnik, U.S. Ambassador to Croatia Nicole McGraw and Croatia's Minister of Finance Ćorić signed a protocol amending the income tax treaty between the United States and Croatia, which was signed on December 7, 2022 (the 2022 tax treaty). The 2022 tax treaty is the first of its kind between the United States and Croatia.

"I am honored to sign the protocol to the U.S.-Croatia income tax treaty with you today, Finance Minister Ćorić," said Ambassador McGraw. "This important step will allow the Trump Administration to transmit this mutually beneficial tax treaty, together with the protocol signed today, to the U.S. Senate for its advice and consent to ratification."

"The Treasury Department is pleased to conclude this protocol to the U.S.-Croatia tax treaty, which was the first comprehensive tax treaty between the United States and Croatia and, together with the protocol, reflects our current tax treaty policies. This is a milestone in the Treasury's efforts to expand the U.S. tax treaty network and bring certainty to investments. We appreciate the collaboration Croatia showed throughout the negotiations," said Treasury Assistant Secretary of Tax Policy Kenneth J. Kies.

Background

The protocol incorporates key amendments to the 2022 tax treaty, all of which are intended to bring the 2022 tax treaty into conformity with aspects of current U.S. law and to reflect discussions with the U.S. Senate on the rules regarding relief from double taxation to be included in new tax treaties. These amendments include:

• The adoption of a treaty-based definition of the term "active conduct of a trade or business" for the purpose of Article 22 (Limitation on Benefits) of the 2022 tax treaty;
• Revised rules in Article 23 (Relief from Double Taxation) regarding the obligations of the United States to provide relief from double taxation; and
• An amendment to Article 24 (Non-Discrimination) to coordinate with certain rules that were enacted into law in the One Big Beautiful Bill Act of 2025.

The protocol will be transmitted as a package with the 2022 tax treaty to the U.S. Senate for that body's advice and consent to ratification. The protocol will enter into force after the United States and Croatia have notified each other that they have completed their requisite domestic procedures.

Read more here.

The text of the protocol is available here.

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