DTT with Indonesia

Double Tax Treaty between Serbia and Indonesia, which was signed in 2011, entered into force on 1 January 2019, the Serbian Ministry of Finance has confirmed. The agreement provides for the following benefits:

Article 10 – Dividends

1. Dividend arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State
2. The tax charged in that way shall not exceed 15% of the gross amount of the dividend

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. Such interest may also be taxed in the Contracting State in which it arises and in accordance with the laws of that Contracting State, however if the beneficial owner of the interest is a resident of the other Contracting State, the tax charged in that way shall not exceed 10% of the gross amount of the interest
3. Notwithstanding the provisions of paragraph (ii) the interest referred to in paragraph (i) shall be taxable only in the Contracting State of which the recipient is a resident if the beneficial owner of the interest is a resident of that Contracting State, and:
   • is the state in which the interest arises or a political subdivision or a local authority of such state
   • is the national or the Central bank of the other Contracting State
   • is a financial institution owned by the Government, its political unit or the local authorities

The DTT is in force as of 1 January 2019.

Investors from Indonesia that intend to exercise any DTT favourable rates are obliged to provide Certificate of Tax Residency issued for the current year.

Impact on investors: DTT between Indonesia and Serbia is expected to create a more favourable tax environment for eligible investors