The Serbian and United Arab Emirates governments recently ratified the Double Tax Treaty (DTT) agreement that was originally signed on 13 January 2012. The agreement will enter into force on 1 August 2013.
The DTT between the United Arab Emirates and Serbia will provide the following benefits to the beneficial owners of the income:
• Article 10 – Dividends:
- 5% of the gross amount of the dividends if the beneficial owner is a company which holds directly or indirectly at least 5% of the capital of the company paying the dividends
- 10% of the gross amount of the dividends 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 whose assets, directly or indirectly, do not exceed 50% of the immovable property situated in Serbia. Standard tax rate would apply if this condition is not met.
Foreign investors who intend to exercise DTT rates are obliged to provide a valid certificate of tax residency issued on the Serbian Ministry of Finance and Economy template.
Impact on investors: Starting from 1 August 2013 Serbia will create a more favorable tax environment for investors from the United Arab Emirates.