According to an update from the Norwegian Ministry of Finance, the new income tax treaty with Serbia entered into force on 18 December 2015. The treaty, signed 17 June 2015, replaces the 1983 income and capital tax treaty between Norway and the former Yugoslavia, which applied in respect of Serbia.
The treaty covers Norwegian:
It covers Serbian corporate income tax and personal income tax.
If a company is considered resident in both Contracting States, the competent authorities will determine the company's residence for the purpose of the treaty through mutual agreement based on its place of effective management, place of registration and any other relevant factors. If the authorities cannot reach mutual agreement, any relief or exemption from tax provided by the treaty will not apply unless agreed upon by the competent authorities.
A permanent establishment will be deemed constituted when an enterprise of one Contracting State furnishes services in the other State through one or more individuals present in that other State for the same or connected project for a period or periods aggregating more than 183 days within any 12-month period.
The beneficial provisions of Articles 10 (Dividends), 11 (Interest), 12 (Royalties) and 22 (Other Income) will not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the shares, debt-claims or other rights in respect of which the dividends, interest, royalties or other income are paid was to take advantage of those Articles by means of that creation or assignment. The limitation is included in each of those Articles.
The following capital gains derived by a resident of one Contracting State may be taxed by the other State:
Gains from the alienation of other property by a resident of a Contracting State may only be taxed by that State.
Both countries apply the credit method for the elimination of double taxation.
The tax treaty applies from 1 January 2016.
The 1983 income and capital tax treaty between Norway and the former Yugoslavia is terminated in respect of Serbia, and its provisions will cease to have effect once the new treaty is effective.
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