Serbia has expanded its double taxation treaty coverage

Belgrade, 22 June 2017

Effective as of 2017, Serbia’s double taxation treaty network has been extended to include Luxembourg. This is a ground breaking investment development because most EU and US based investors use Luxembourg vehicles when doing business in CEE.

As well, Serbia has expanded its coverage by concluding similar double taxation treaties with Kazakhstan, Korea and Armenia. Similar treaties are presently being finalised with Israel and Oman.

Henceforth, Luxembourg entities will enjoy the following taxation of certain types of income: (i) dividends will be taxed up to 5% when the recipient (excluding partnership) owns at least 25% of shares of the paying entity; otherwise a 10% dividend tax is applicable; (ii) interest will be taxed up to 10% of the gross payment; and (iii) royalties will be taxed up to 5% or 10%, depending on the nature of the intellectual property right or the right to use thereof.