The Government of Austria and the Government of Montenegro concluded a new Convention for the avoidance of double taxation with respect of taxes on income and on capital (BGBL 51/2015)
Article 10 – dividends:
1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.
2. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of the State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed:
a) 5% of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 5 per cent of the capital of the company paying the dividends;
b) 10% of the gross amount of the dividends in all other cases
Article 11 – interest:
1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
2. However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 10% of the gross amount of the interest.
3. Notwithstanding the provisions of paragraph 2, interest shall be exempted from tax in the Contracting State in which it arises if the interest is paid in respect of a loan, debt-claim or credit that is owned to, or made, provided, guaranteed or insured by, that State or a political subdivision, local authority or export financing agency thereof.
This convention entered into force already and shall have effect in respect of taxes for any fiscal year beginning on/ after January 1, 2016.
Impact on investors: New DTT between Austria and Montenegro