Effective 1 January 2021, the related party interest rate in Croatia has been set at 3.00%, a reduction from the 2020 rate of 3.42%. The related party interest rate applies as a minimum interest rate for interest income on cross-border financing between related parties when the Croatian resident provides the loan, and as a maximum rate for the deduction of interest expense on such cross-border financing when the Croatian resident receives the loan. The rate similarly applies for loans between resident related parties if one of the parties is in a favorable tax position. Subject to certain conditions, taxpayers may...