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February 2016

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Serbian double taxation treaties – effective as at 1 January 2016

The list of effective double taxation treaties between the Republic of Serbia and other countries is expanded for one new contracting state starting from 1 January 2016.

Namely, as of 1 January 2016 the new double taxation treaty concluded between the Republic of Serbia and the Kingdom of Norway is effective.

The new double taxation treaty replaced the previous treaty that was concluded in 1983 between the former Socialist Federative Republic of Yugoslavia and the Kingdom of Norway.

List of effective double taxation treaties

The list of 54 countries with which the Republic of Serbia has effective double taxation treaties as at 1 January 2016 is presented below together with the breakdown of effective withholding tax rates on dividends, interest and royalties:

No.    Country                                                Dividends*                    Interest                           Royalties               
1 Albania                     5/15  10 10
2 Austria 5/15 10 5/10**
3 Azerbaijan 10 10 10
4 Belarus 5/15 8 10
5 Belgium 10/15 15 10
6 Bosnia and Herzegovina 5/10 10 10
7 Bulgaria 5/15 10 10
8 Canada 5/15 10 10
9 China 5 10 10
10 Croatia 5/10 10 10
11 Cyprus 10 10 10
12 Czech Republic 10 10 5/10***
13 Denmark 5/15 10 10
14 Egypt 5/15 15 15
15 Estonia 5/10 10 5/10***
16 Finland 5/15 0 10
17 France 5/15 0 0
18 FYROM (Macedonia) 5/15 10 10
19 Georgia 5/10 10 10
20 Germany 15 0 10
21 Greece 5/15 10 10
22 Hungary 5/15 10 10
23 India 5/15 10 10
24 Iran 10 10 10
25 Ireland 5/10 10 5/10***
26 Italy 10 10 10
27 Kuwait 5/10 10 10
28 Latvia 5/10 10 5/10**
29 Libya 5/10 10 10
30 Lithuania 5/10 10 10
31 Malaysia 20**** 10 10
32 Malta 5/10 10 5/10**
33 Moldova 5/15 10 10
34 Montenegro 10 10 5/10**
35 Netherlands 5/15 0 10
36 North Korea 10 10 10
37 Norway 5/10 10 5/10**
38 Pakistan 10 10 10
39 Poland 5/15 10 10
40 Qatar 5/10 10 10
41 Romania 10 10 10
42 Russia 5/15 10 10
43 Slovak Republic 5/15 10 10
44 Slovenia 5/10 10 5/10**
45 Spain 5/10 10 5/10***
46 Sri Lanka 12.50 10 10
47 Sweden 5/15 0 0
48 Switzerland 5/15 10 0/10******
49 Tunisia 10 10 10
50 Turkey 5/15 10 10
51 Ukraine 5/10 10 10
52 United Arab Emirates (UAE) 0/5/10***** 0/10***** 10
53 United Kingdom 5/15 10 10
54 Vietnam 10/15 10 10
5/15

* If the recipient company holds at least 25% (20% in the treaty with Switzerland, 5% in the treaty with UAE) of the ownership stakes/shares in the paying company, the lower of the two rates shown will apply.

** 5% rate is applicable for the use of or the right to use copyright of literary, art or scientific work, including cinematography films and films or tapes for television and radio.

10% rate is applicable for the use of or the right to use patent, trademark, draft or model, plan, secret formula or process or for the use of or the right to use industrial, commercial or scientific equipment or for the information regarding the industrial, commercial or scientific experience (know-how).

*** 5% rate is applicable for the use of or the right to use copyright of literary, art or scientific work, except for computer software, including cinematography films.

10% rate is applicable for the use of or the right to use patent, trademark, draft or model, plan, secret formula or process, as well as computer software, or for the use of or the right to use industrial, commercial or scientific equipment or for the information regarding the industrial, commercial or scientific experience (know-how).

**** 10% rate is applicable if the payer is resident of Malaysia, whereas 20% rate is applicable if the payer is resident of Serbia.

***** 0% rate will apply if it is paid to the government of the contracting state (or to its political subdivisions or local authorities). In case of dividend payments made by Serbian tax residents to tax residents of the UAE, the Protocol provides for the specific list of entities to which 0% rate on dividends is applicable.

****** In accordance with the Protocol to the Treaty, the 10% rate will not be applied as long as Switzerland does not impose withholding tax on royalties. Until that moment, royalties would be taxable only in the contracting state whose resident is the beneficial owner.
 

Conditions for the application of the provisions of the double taxation treaties

In order to apply the abovementioned reduced (beneficiary) withholding tax rates envisaged by the relevant double taxation treaties, the resident taxpayer – payer of income should obtain residence certificate from the non-resident income recipient on the POR-2 form (certified by the foreign competent authority) or in the form of a certificate prescribed by the foreign competent authority with certified translation into Serbian language. Furthermore, the payer of income should also provide proof that the non-resident is the beneficial owner of income (e.g. a contract and an invoice based on which payments are made to the non-resident).

 

Disclaimer

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