The 2003 France-Croatia tax treaty, article by article

The convention between France and Croatia was signed in Paris on June 19, 2003, and entered into force on September 1, 2005. It is classified as an income tax only, excluding inheritance tax. It caps the withholding tax on dividends at 15% of GDP, and at 0% for a company holding at least 10% of the share capital. Interest and royalties are taxable only in the beneficiary's country of residence. This page presents the articles read in the official consolidated text and explains what it does not cover.

Signed in 2003, implemented since 2006, amended by MLI since 2021

The BOFiP indicates authorization by law no. 2005-681 of June 21, 2005 and publication by decree no. 2005-1292 of October 13, 2005. The Croatian tax administration displays, for France, an application from January 1, 2006.

The convention is amended by the Multilateral Convention (MLI), which entered into force on January 1, 2019, for France and on June 1, 2021, for Croatia. Its effects began on January 1, 2022, for withholding taxes and on December 1, 2021, for other taxes. A note in the consolidated version specifies that paragraph 7 of Article 10 is not applicable pursuant to Article 7, paragraph 2, of the MLI; we have not reviewed the content of this paragraph.

Article 29 terminates the effects of the 1974 convention with Yugoslavia. Article 30 allows for denunciation of the agreement after five years, with at least six months' notice before the end of a calendar year.

Maximum deductions and key rules

Income tax alone

Article 2 applies to income taxes levied on behalf of a State, including, for France, withholding taxes, prepayments and advances; for Croatia, it specifically mentions corporate income tax ("porez na dobit"). The administrative list classifies Croatia as "IR".

Who is a resident: Article 4

A resident is a person liable to tax in a State by reason of their domicile or a similar criterion, excluding those taxed solely on locally sourced income. In the case of dual residence of an individual, paragraph 2 considers first the permanent home, then, if there is one in each State, the center of vital interests, and finally the habitual abode if that center cannot be determined. For a person other than an individual, it is the place of effective management.

Dividends: 10 % of the capital, without any time limit.

The 0% tax rate assumes that the beneficial owner is a company that directly or indirectly holds at least 10% of the capital of the paying company. In other cases, including for an individual, the limit is 15% of the gross amount. We did not see any minimum holding period specified. Paragraph 6 prohibits a State from taxing dividends paid by a company of the other State, or its undistributed profits, solely on the grounds that these profits or income originate from it, unless paid to one of its residents or attributable to a permanent establishment or fixed base. The Croatian tax authorities publish the same figures for France: 0% or 15% for dividends, 0% for interest and royalties.

Interest and royalties: no withholding tax

Articles 11 and 12 reserve taxation to the State of residence of the beneficial owner. Royalties include copyrights, software and films, patents, trademarks, designs, plans, secret formulas or processes, and know-how. Both articles exclude this rule if the beneficiary carries on business in the State of source through a permanent establishment or fixed base to which the claim or asset is attributable. In such cases, Article 7 or 14 applies.

Capital gains: the 365-day window

Article 13, paragraph 1(b), concerns shares, rights, or similar interests, including in a partnership or trust. The gain is taxable in the other State if, at any time during the 365 days preceding the transfer, these securities derive, directly or indirectly, more than 50% of their value from immovable property situated in that State. Immovable property that the company uses for its own business operations is not included. Gains on immovable property are taxable in the State where the property is situated (paragraph 1(a)). Paragraphs 2 and 3 deal with movable property of a permanent establishment or fixed base, and ships and aircraft operated in international traffic. Gains on all property other than that covered by paragraphs 1 to 3 are taxable only in the State of residence of the transferor (Article 13, paragraph 4).

Salaries, tokens, pensions, teachers

Article 15, paragraph 2, exempts stays in the other State not exceeding a total of 183 days during any twelve-month period beginning or ending in the relevant tax year, provided the employer is not a resident of the other State and the expense is not borne by a permanent establishment or fixed base. Directors' fees are taxable in the State of the company. Pensions for previous employment are taxable in the State of residence. Public remuneration (excluding pensions) is taxable in the paying State (Article 19, paragraph 1), unless services are rendered in the other State and the individual is a resident and national of that State without holding the nationality of the first State. Article 19, paragraph 2, provides the same general rule for public pensions and an exception for individuals who are residents and nationals of the other State without holding the nationality of the first. Article 21 exempts for two years from arrival the teacher or researcher on assignment; the exemption does not apply to income from research work which is not undertaken in the public interest, but mainly for a particular benefit accruing to one or more specific persons.

Double taxation: French tax credit, Croatian exemption

The two countries do not use the same method. For France, income taxable in Croatia is taken into account for the calculation of French tax, and the French resident receives a tax credit: equal to the corresponding French tax for most income, provided it is subject to Croatian tax, or equal to the Croatian tax paid, capped at the corresponding French tax, for dividends, gains referred to in Article 13 § 1 and 2 (real estate, securities with a significant real estate component, assets of a permanent establishment or fixed base), and other listed income. Croatia, on the other hand, exempts French-source income taxable in France, while still taking it into account for the tax rate. For dividends, this exemption applies only to those paid to a Croatian company that directly holds at least 10% of the capital and that are not deducted by the payer. Other dividends give rise to a capped Croatian tax credit.

Shares in a real estate company: numerical example (fictitious profile)

Situation. A fictitious French resident sells shares of a company whose assets include buildings located in Croatia on October 15, 2026. The share of these buildings in the value of the shares, excluding operating buildings, amounts to 46 % on October 31, 2025, 52 % on January 31, 2026, 49 % on April 30, 2026, and 47 % on August 31, 2026.

Issue. He wants to know if the real estate share has exceeded 50 %.

Strategy. It applies Article 13 § 1 b): the window runs from October 15, 2025 to October 15, 2026, and the threshold is assessed at any time during this period.

Result. The four measures fall within the window. The maximum is 52 %, which is 2 points above the threshold of 50 %: the condition is met, and the article allows Croatia to tax the gain. The French resident remains taxable in France: Article 23, presented above, then resolves the double taxation. The percentages and dates are fictitious.

Disputes and anti-abuse clause

Article 25 requires that the case be submitted within three years of the first notification of the measure. The consolidated version reproduces the MLI clause on the right to benefits: a benefit is not granted if it is reasonable to conclude that its granting was one of the principal objects of an arrangement or transaction, unless it is proven that such granting would be consistent with the object and purpose of the agreement.

Inheritance and gifts

The administrative list classifies Croatia for income tax purposes only, without mentioning inheritance or gifts. This page provides no further information: inheritance and gifts are governed by both French and Croatian law.

What this page does not cover

Articles 5, 7, 8, 9, 14, 17, 20, 24, 26 to 28, the content of paragraph 7 of Article 10, and Croatian domestic law for non-residents. Domestic tax rates on dividends are not provided.

What changes depending on your situation

• Your residence as defined in Article 4.
• The nature of the income: dividend, interest, royalty, salary, pension, gain.
• Your status as an individual or a company, and the share held in the capital.
• The number of days spent in Croatia in each twelve-month period.
• The real estate composition of the companies in which you hold shares, and its evolution over 365 days.

Each article applies to the specific facts of your case. No outcome is guaranteed.