The Convention between the Government of the Republic of Serbia and the Government of the State of Israel on the avoidance of double taxation and the prevention of tax evasion with respect to taxes on income has entered into force on 25 October 2019.
According to the Convention, the maximum withholding tax rates on dividends, interest and royalties are:
Dividends:
1) 5% of the gross amount of the dividend if the beneficial owner is a company (excluding a partnership) which directly holds at least 25% of the capital of the dividend-paying company during the year which includes the dividend payout date, and
2) 15% of the gross amount of the dividend in all other cases.
Interest:
10% of gross interest
Royalties:
1) 5% of the gross amount of royalties (for use or for the right to use copyright for a literary, artistic or scientific work, including cinematograph films and films or tapes used for television or radio broadcasting), and
2) 10% of the gross amount of royalties (for the use or right of use of a patent, trademark, design or model, plan, secret formula, process, industrial, commercial, or scientific equipment, information / know-how concerning industrial, commercial or scientific experience).
The Convention was signed in Belgrade on November 22, 2018. The Law on Confirmation, as well as the text of the Convention, was published in the Official Gazette of the RS – International Agreements, no. 2 of February 18, 2019. The Convention shall apply as of 1 January 2020.
Contact our Belgrade office for more information on how the treaty may impact or benefit you if your Serbian company is doing business with Israel.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
