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Moldova Clarifies that Foreign Tax Improperly Withheld under Tax Treaty is Not Creditable

|Treaty Development|Moldova-Macedonia
Moldova-Macedonia

Moldova's State Tax Service recently issued a letter clarifying the allowance of a credit for foreign tax paid under the 2006 tax treaty with Macedonia. The issue concerned a Moldovan software company that had sold software to a resident of Macedonia, which withheld 10% tax on the payment as provided under Article 12 (Royalties) of the treaty. However, because there was no actual transfer of ex…

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