Latest Taxation Updates for Non-Resident Legal Entities in Serbia (Amendments to Existing DTTs Effective from January 2025

Latest Taxation Updates for Non-Resident Legal Entities in Serbia (Amendments to Existing DTTs Effective from January 2025)

The implementation of the Multilateral Convention on tax base erosion and profit shifting within Double Taxation Treaties (DTTs) began on January 1, 2019. This agreement has directly modified certain provisions in existing DTTs, and throughout 2025, several DTTs will be further amended.

Practical Implementation of the Multilateral Convention

The Multilateral Convention applies when two contracting states, both signatories of the agreement, mutually agree to adopt its provisions and have not placed reservations on specific articles. In such cases, the Multilateral Convention automatically incorporates relevant modifications into the text of the existing DTTs.

Ministry of Finance Guidance for Tax Authorities and Businesses

To facilitate compliance for tax authorities, taxpayers, and the broader professional community, the Ministry of Finance of Serbia has published “Combined Texts” of the amended bilateral DTTs in Serbian language. These documents highlight all modifications and additions to the treaties.

Key Amendments Effective in 2025

The application of the Multilateral Convention impacts certain taxes in countries where the Combined DTTs will take effect during 2025. Specifically, in the case of Azerbaijan, the following changes will apply:

• Withholding tax in Serbia: Effective from January 1, 2025
• Other taxes in Serbia: Effective from July 1, 2025

These changes aim to ensure greater tax transparency, reduce double taxation risks, and strengthen bilateral cooperation in taxation matters. Businesses operating in Serbia should carefully assess these amendments and adjust their tax strategies accordingly.