Croatia and the US have inked a deal on the application of the Foreign Account Tax Compliance Act (FATCA) concerning accounts in foreign financial institutions.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

The two parties aim to boost transparency on taxes with the agreement, according to a statement from the Croatian Finance Ministry signed by Finance Minister Boris Lalovac and US Ambassador Kenneth Merten.

"The signing of this agreement is an important step in cooperation between the US and Croatia in preventing tax fraud and tax evasion. Failure by taxpayers to meet their tax obligations leads to an uneven distribution of the tax burden to the detriment of those that duly pay their taxes. FATCA is an important part of cooperation between the governments of the US and Croatia in dealing with this issue," the statement said.

Croatia will implement the OECD standard for the automatic exchange of information on financial accounts. This will also allow automatic exchange of information with EU member states as well as with third countries.

Under FATCA, foreign financial institutions are required to report to the US Internal Revenue Service (IRS) once a year on data on assets held by US citizens in accounts abroad. The reporting should be done directly or indirectly through competent authorities.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

The latest deal requires financial institutions in Croatia to submit information on accounts held by US nationals in Croatia to the Croatian Tax Authority which will send the data to the IRS.

At the same time, IRS is required to inform the Croatian Tax Authority about Croatian owners of accounts in the US.