FYR Macedonia: FYR Macedonia and Israel sign tax treaty

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

FYR Macedonia: FYR Macedonia and Israel sign tax treaty

Kostovska-Elena

Elena Kostovska

On December 9 2015, FYR Macedonian Government representatives signed a double tax treaty (DTT) with Israeli officials in Jerusalem.

Pending approval from both countries' authorities, the treaty will be effective from the calendar year following the one during which ratifications will take place.

The DTT covers personal income tax and profit tax in FYR Macedonia and income tax, company tax and tax imposed on gains from the alienation of property in Israel. According to the treaty, construction and installation projects exceeding 12 months in duration are considered to constitute a permanent establishment.

Article 10 of the treaty with Israel defines a 5% withholding tax rate for dividends in cases when the beneficial owner holds at least 25% of the dividend-paying company and a 15% tax rate in cases when this participation criterion is not met. The same article clearly defines the withholding tax applied to distributions made by real estate investment companies. Such distributions are subject to 15% withholding tax assuming the beneficial owner's participation of at least 10%. The clarifying remarks of the treaty stipulate that a real estate investment company presumes a company meeting the conditions outlined in section 64A2 of the Israeli Income Tax Ordinance.

Additionally, a standard 10% withholding tax rate is applicable on interest and a 5% rate is applicable on royalties.

As far as prevention of double taxation is concerned, the treaty stipulates that both countries will allow deduction from taxes in the amount of tax paid on it the other state.

Given the recent momentum in the bilateral relations between FYR Macedonia and Israel, including the signing of a bilateral investment protection agreement (IPA) in December 2015, it is expected that swift ratifications of the DTT will ensue during 2016.

Elena Kostovska (elena.kostovska@eurofast.eu), Skopje

Eurofast Global

Tel: +389 2 2400225

Website: www.eurofast.eu

more across site & shared bottom lb ros

More from across our site

Whether it be due to a fragmented advisory market or a rise in M&A, Italy’s frenetic hiring has not gone unnoticed by ITR’s Talent Tracker
The deal gives Azets 14 new partners and boosts its Swedish revenues to over $100 million; in other news, Svalner Atlas launched in Copenhagen
The tax technology company will be providing a free demonstration of its OTP software and offering best practice advice on whether to ‘buy or build’ on September 8
Johanes Glorinus Saragih of Indonesia’s Directorate General of Taxes outlines the nation’s delicate geopolitical situation, as it sits between a rock and a hard place with the US and pillar two
The law firm’s head of tax, trade and wealth management likens tax legislation to a complex puzzle, recommends a sturdy coffee mug, and explains why acronyms make tax cool
The global tax and accounting firm has appointed two experienced TP advisers from a New Jersey-based boutique
A lack of commitment from major jurisdictions and the associated compliance burden are obstacles facing the OECD initiative
Richard Gregg is no longer fit and proper to be a tax agent, said the TPB; in other news, MHA completed its acquisition of Baker Tilly South-East Europe
Recent Indian case law emphasises the importance of economic substance over mere legal form in evaluating tax implications, say authors from Khaitan & Co
PepsiCo was represented by PwC, while the ATO was advised by MinterEllison, an Australian-headquartered law firm
Gift this article