DTT agreement between Serbia and Japan was adopted by the Serbian Parliament in December 2020.Effective date will be not before than January 1, 2022.
The DTT between Japan and Serbia will provide 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 Japan will be taxed only in Japan if the beneficial owners are a political subdivision or a local authority in Japan thereof, the Central Bank of Japan or any institution fully owned by Japan or a political subdivision or a local authority.
Impact on investors: DTT between Japan and Serbia is expected to create a more favorable tax environment for eligible investors.