On 3 December 2019, Kosovo published in the Official Gazette the decree for the ratification of the pending income tax treaty with Saudi Arabia. The treaty, signed 20 October 2019, is the first of its kind between the two countries.
The treaty covers Kosovo personal income tax and corporate income tax and covers Saudi Zakat and income tax, including the natural gas investment tax.
The treaty includes the provision that a permanent establishment will be deemed constituted when an enterprise furnishes services through employees or other engaged personnel if the activities continue for the same or connected project within a Contracting State for a period or periods aggregating more than 183 days within any 12-month period.
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.
Both countries apply the credit method for the elimination of double taxation.
The treaty will enter into force on the first day of the second month after the ratification instruments are exchanged and will apply from 1 January of the year following its entry into force.
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