WHT is calculated and paid at the rate of 20% on payments such as dividends/share in profit, royalties (including neighbouring authorship rights, intellectual property rights, and related rights), interest income, income from market research services, accounting and audit services, and other legal and business consulting services, income from distributed surplus of a company in bankruptcy, revenues derived from the liquidation surplus of a company in liquidation, and lease payments for real estate and other assets made to a non-resident, unless a DTT applies to provide a reduced rate or exemption.
WHT is also payable on a non-resident’s income realised on the basis of performing entertaining, artistic, sports, and similar programs in Serbia, which is not taxed as income of an individual (performer, musician, sportsman, etc.).
In order to benefit from application of a relevant DTT, non-residents (i.e. the income recipient) must provide a tax residency certificate on the form prescribed by the Serbian Ministry of Finance stamped by the relevant body from the non-resident's country of residence.
Special WHT rules apply in case of non-resident entities from tax havens. WHT is payable at the rate of 25% on royalties, interest, income from lease of immovable property and other assets, and service fees paid to non-resident entities from tax havens. Dividend payments to non-residents from tax havens are subject to WHT at 20%. The Serbian Ministry of Finance publishes a list of jurisdictions that are regarded as tax havens (http://www.poreskauprava.gov.rs/pravna-lica/pregled-propisa/prav ilnici/312/pravilnik-o-listi-jurisdikcija-sa-preferencijalnim-poreskim-sistemom.html).
WHT rates envisaged by applicable DTTs are provided in the following table.
|Recipient||WHT (%)||Applicable from|
|Dividends (1)||Interest||Royalties (3)|
|Bosnia and Herzegovina||5/10||0/10 (5)||10||2006|
|Czech Republic||10||0/10 (5)||5/10||2006|
|Hong Kong (8)||5/10||0/10 (5)||5/10||2021|
|Indonesia (2)||15||0/10 (5)||15||2019|
|Iran (2)||10||0/10 (5)||10||2012|
|Israel (8)||5/15||10 (5)||5/10||2019|
|Japan (8)||5/10||0/10 (5)||5/10||2021|
|Morocco (2)||10||0/10 (5)||10||N/A|
|North Korea||10||0/10 (5)||10||2002|
|Norway||0/5/15 (7)||0/10 (5)||5/10||2016|
|Palestine (2)||10||0/10 (5)||10||N/A|
|San Marino (8)||5/10||10||10||2019|
|Singapore||0/5/10 (7)||0/10 (5)||5/10||2021|
|Slovak Republic (8)||5/15||10||10||2002|
|Slovenia (8)||5/10||0/10 (5)||5/10||2004|
|South Korea||5/10||0/10 (5)||5/10||2017|
|United Arab Emirates||0/5/10 (7)||0/10 (5)||10||2014|
- If the recipient company owns/controls at least 25% (5% depending on the relevant DTT) of the equity of the paying company, the lower of the two rates applies.
- The treaty has not been ratified by one of the parties.
- A tax rate of 5% will be applicable to literary, scientific, and work of art; films and works created like films; or other source of reproduction tone or picture. A tax rate of 10% will be applicable to patents, petty patents, brands, models and samples, technical innovations, secret formulas, or technical procedures.
- Only in cases when dividends are to be paid to Serbian residents. If paid to Malaysian residents, they are taxable at 20% in Serbia.
- A 0% rate is applicable in cases when the income recipient is the government or government owned banks. In all other cases, a higher rate envisaged by the DTT should apply.
- WHT rate refers solely to dividends distributed from Serbia. In Malta, WHT cannot be higher than CIT on profit before dividend distribution.
- A 0% rate is applicable in cases when the dividend income recipient is the government of the contracting state.
- Besides ownership requirement (see Note 1), 365 holding period criterion needs to be met in order to apply lower of the two DTT rates on dividend payments.