Tax Alert, December 2018

Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting has come into force for Serbia on 1 October 2018.

The Multilateral Convention will apply to Double Tax Treaties with Austria, Poland, United Kingdom and Slovenia:

-  for withholding taxes – as of 1 January 2019;

-  for other taxes – for the tax periods starting on or after 1 April 2019.

The Multilateral Convention will apply to Double Tax Treaties with France, Slovakia and Lithuania:

-  for withholding taxes – as of 1 January 2019;

-  for other taxes – for the tax periods starting on or after 1 July 2019.

Serbian Ministry of Finance has published on its webpage consolidated versions of the Double Tax Treaties amended by the Multilateral Convention.

Multilateral Convention amends the provisions of the existing bilateral Double Tax Treaties with the aim of preventing the erosion of the tax base, in case the Multilateral Convention has come into force for both contracting states which have notified the Double Tax Treaty under the Multinational Convention. Serbia has notified 64 Double Tax Treaties, both ones that have already come to force and ones which have not been ratified yet. The actual amendments to the provisions of a particular Double Tax Treaty depend on the choices of the both contracting parties.

Please note it should be expected that the Multilateral Convention will have effect on majority of the existing Double Tax Treaties in the future period.

For more details on the Multilateral Convention and its application, contact our experts in the tax department.