Based on a very recent, arguably controversial, official opinion of the Croatian Tax Authority, any profit transferred to the head office will be, for tax purposes, treated as a transfer of dividend outside Croatia.
This means that after the corporate profit tax (assessed at 18% or 12%, depending on the revenue) on the profit of the branch office, transfer of profit abroad is additionally subject to withholding tax at 12%. If the head office is registered in another EU Member State or in a country with which there is a Double Tax Treaty in place, exemption or reduced withholding tax rate prescribed for dividend payments may be applied.
No protection is, however, available if the head office of the Croatian branch office is located outside of the EU or in a "non-treaty" country - for example USA, Brazil or Japan. In that case, withholding tax at 12% is payable on any transfer of profit from Croatia.