Double Tax Treaty with Canada

The Serbian and the Canadian governments ratified the Double Tax Treaty (DTT) originally signed by them on 27 April 2012. The agreement is based on the OECD Model Tax Convention on Income and on Capital and will become applicable to income earned as of 1 January 2014.

The DTT between Canada and Serbia provides the following treaty benefits to beneficial owners of the respective type of income as detailed below.

Article 10 - Dividends

• 5% of the dividend gross amount, if the beneficial owner on the income is a company (partnerships excluded) that holds directly at least 25% of the capital of the company paying the dividends
• 15% of the dividend gross amount in all other cases

Article 11 - Interest

• 10% of the gross amount of the interest

Article 13 - Capital gains

• 0% if the investor sells equities issued by a company, the assets of which, directly or indirectly, do not consist mainly of immovable property situated in Serbia (i.e. less than 50% of      the company's total assets). The standard tax rate applies if this condition is not met.

Foreign investors that intend to avail of the DTT rates are obliged to provide a valid certificate of tax residence.

Impact on investors: As of 1 January 2014 Serbia will feature a more favourable tax environment for Canadian investors.