DTT agreement between Serbia and Hong Kong was adopted by the Serbian Parliament in December 2020 and is effective on January 1, 2021.
The DTT between Hong Kong and Serbia provides the following benefits:
5% withholding tax rate will apply to the gross amount of the dividends if the beneficial owner (other than a partnership) holds directly at least 25% of the capital of the company paying the dividends during the period of 365 days, dividend payment date is also included;
10% withholding tax rate will apply to the gross amount of the dividends in all the other cases.
Tax on interest shall not exceed 10% of the gross amount of the interest.
Interest that arises in Serbia and that will be paid to the resident of Hong Kong will be taxed only in Hong Kong if the beneficial owners are the Hong Kong government, the monetary government (authorities) of Hong Kong or the Stock Exchange Fund.
Investors from Hong Kong who intend to exercise DTT favorable rates are obliged to provide Certificate of Tax Residency issued for the current year and, if requested, documents proving that the investor is the actual beneficiary of the income.
Impact on investors: DTT between Hong Kong and Serbia is expected to create a more favorable tax environment for eligible investors.