Croatia reviews negotiations for new Norway tax treaty

Negotiation report reaches government

Croatia's published agenda for the Government's 224th session includes a report on negotiations for an agreement with Norway to eliminate double taxation on income. The item identifies a prospective bilateral income-tax agreement, but the public meeting record does not provide a signed treaty text or state that an agreement was signed. This is therefore a negotiation-stage proposal, not a change to the rules currently applied by taxpayers.^[1]

The inherited convention remains the baseline

Norway's official treaty catalogue continues to list the 1 September 1983 Norway-Yugoslavia convention as the treaty in force for Croatia. It records that an exchange of notes made the convention applicable to Croatia from 6 March 1996, subject to a reservation concerning Article 15(3). The catalogue says the inherited convention remains in force for Croatia, Bosnia and Herzegovina and Montenegro.^[2][3]

The 1996 exchange of notes anticipated negotiations for a replacement convention while applying the earlier treaty as an interim measure. The 11 November report does not displace that position. Until a new agreement is signed, ratified, enters into force and reaches its specified application dates, groups should continue to analyse Croatia-Norway income under the existing convention and applicable domestic law.^[1][2][3]

Terms and dates remain unresolved

The reviewed official sources do not establish the proposed treaty's permanent-establishment threshold, withholding-tax ceilings, capital-gains allocation, relief method, anti-abuse provisions, mutual-agreement procedure, entry-into-force test or application dates. Those matters should not be inferred from this procedural milestone.^[1][2]

Groups with Croatian or Norwegian entities, permanent establishments or cross-border payments should monitor publication of a signed text and both jurisdictions' ratification steps. Existing withholding, residence, beneficial-ownership and permanent-establishment positions should not be changed solely because the negotiation report has reached the Croatian Government.^[1][2][3]