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Tax Treaty between Morocco and Serbia has Entered into Force — Orbitax Tax News & Alerts

The income tax treaty between Morocco and Serbia entered into force on 19 April 2022. The treaty, signed 6 June 2013, is the first of its kind between the two countries.

Taxes Covered

The treaty covers Moroccan income and corporation tax, and Serbian personal and corporate income tax.

Service PE

The treaty includes the provision that a permanent establishment will be deemed constituted when an enterprise furnishes services through employees or other engaged personnel in a Contracting State if the activities continue for the same or connected project for a period or periods aggregating more than 3 months within any 12-month period.

Withholding Tax Rates

  • Dividends - 10%
  • Interest - 10%
  • Royalties - 10%
  • Technical Fees in consideration for any services of a technical, managerial, or consultancy nature - 10%

Capital Gains

The following capital gains derived by a resident of one Contracting State may be taxed by the other State:

  • Gains from the alienation of immovable property situated in the other State;
  • Gains from the alienation of movable property forming part of the business property of a permanent establishment in the other State; and
  • Gains from the alienation of shares of the capital stock of a company, the property of which consists directly or indirectly principally of immovable property situated in the other State.

Gains from the alienation of other property by a resident of a Contracting State may only be taxed by that State.

Double Taxation Relief

Both countries apply the credit method for the elimination of double taxation. A provision is also included for a tax sparing credit for tax that would otherwise be payable but has been reduced or waived in a Contracting State under its legal provisions for tax incentives.

Effective Date

The treaty applies from 1 January 2023.