The income and capital tax treaty between Luxembourg and Serbia reportedly entered into force on 27 December 2016. The treaty, signed 15 December 2015, is the first of its kind between the two countries.
The treaty covers Luxembourg income tax on individuals, corporation tax, capital tax, and communal trade tax. It covers Serbian corporate income tax, personal income tax, and tax on capital.
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.
Serbia applies the credit method for the elimination of double taxation, while Luxembourg generally applies the exemption with progression method. However, in respect of income covered by Articles 10 (Dividends), 11 (Interest), 12 (Royalties), and 17 (Artistes and Sportspersons income), Luxembourg applies the credit method.
The final protocol to the treaty includes the provision that if Serbia signs a tax treaty with a third State that is a member of the EU and such treaty provides for a lower rate of tax in respect of income covered by Articles 11(Interest) and 12 (Royalties), then negotiations will begin for the revision of the rates provided for under the Luxembourg-Serbia tax treaty.
The treaty applies from 1 January 2017.
We’re here to answer any questions you have about the Orbitax products and services.
We’re committed to providing high value, low cost tax research and management solutions.
Our Twitter account is where you can find latest information, news updates, offers and lots more.