The international double taxation, namely its avoidance, becomes more important both worldwide and in the Republic of Serbia, due to more intensive capital investments in the Republic of Serbia, opening of foreign companies, participation of foreign companies in the privatization processes, employment of foreign persons, inclusion of the Republic of Serbia in international financial transactions, etc.
As a result, the Republic of Serbia is, like all other states, interested in elimination of the problem of international double taxation, through the conclusion of Double Taxation Treaties (hereinafter: DTTs), primarily with the states that are its most important economic partners, and then with other states as well, which would thus make easier its integration into the international division of labour and intensify its economic and financial relations worldwide.
This is especially important in the present situation of significant changes within the economic and tax system reform, which creates new conditions in the Republic of Serbia, for doing business on profit making and market economy principles, and for equal treatment of all types of ownership.
In connection with that, we would particularly like to point out that concluded DTTs become the integral part of domestic tax law upon ratification by the National Assembly of the Republic of Serbia, and they have priority over the law of the Republic of Serbia.
At the same time, the correct application of DTTs is of particular importance for residents of the Republic of Serbia (payers of income subject to withholding tax) who have the obligation to calculate, withhold and pay tax, as well as to submit the prescribed tax return, in accordance with positive legal regulations (in which, after ratification in The National Assembly of the Republic of Serbia also includes DTTs).
With respect to that, it can be concluded that:
– development of economic relations with foreign countries, consequently has the increasing interest of foreign partners to conclude the DTT (because of more favourable conditions for investing in the Republic of Serbia, for sale of copyrights and know-how, granting of loans, etc.);
– in the Republic of Serbia there is an increasing awareness of the importance of bilateral DTTs, especially with the countries which are its most important economic partners;
– that the DTTs are useful and in the interest of companies (legal persons) and citizens (natural persons) and particularly, for the promotion of joint venture, and for enabling foreign investors, and not the governments of these countries, to use tax reliefs given to them;
– that positive experiences in application of concluded DTTs are increasingly evident, from day to day.
Considering the above, we can enable our clients, to a greater extent than it is the case with those who are not, to independently (as well as with our help) apply the provisions of the DTT, correctly fulfill their tax obligations and, at the same time, provide the company with significant savings.