International Tax Review is part of the Delinian Group, Delinian Limited, 8 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

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

FYR Macedonia: FYR Macedonia ratifies double tax treaty with Bosnia & Herzegovina

kostovska.jpg

Elena Kostovska

On February 3 2014, the FYR Macedonian Parliament has ratified the tax treaty with Bosnia & Herzegovina signed on September 24 2013 in Sarajevo. The ratification law was published in the Official Gazette No. 29 of February 6 2014. Pending ratification of the treaty by Bosnia & Herzegovina and its subsequent entry into force, the agreement provisions will be effective from the following calendar year. The treaty covers the personal income tax, property tax and profit tax in FYR Macedonia and the tax on income of individuals, tax on profit and tax on property in Bosnia & Herzegovina. As usual, the agreement is mostly harmonised with the OECD model with the below specifics that are of interest in the treaty's content.

Permanent establishments are deemed to arise when a building/construction site or an installation project (including any related site activity of supervisory nature) lasts for more than 12 months.

As far as withholding taxes are concerned, the treaty with Bosnia & Herzegovina stipulates rates which are slightly higher than what is fairly common in FYR Macedonian double tax treaties; dividends are taxed with 15% (a preferential rate of 5% is applicable when the beneficial owner holds at least 25% of the capital in the dividend-paying company). A standard 10% withholding tax rate on interest has been agreed, which is also applicable to royalties.

In regards to the provisions for the elimination of double taxation, the treaty stipulates that both FYR Macedonia and Bosnia & Herzegovina will allow deduction from taxes in the amount of tax paid to the other state. Bosnia & Herzegovina also reserves the right to take into account any exempted income or capital for which tax has been suffered in FYR Macedonia when calculating the amount of tax payable in Bosnia & Herzegovina for the remaining income/capital.

Elena Kostovska (elena.kostovska@eurofast.eu)

Eurofast Global, Skopje Office

Tel: +389 2 2400225

Website: www.eurofast.eu

more across site & bottom lb ros

More from across our site

David Pickstone and Anastasia Nourescu of Stewarts review the facts and implications of Ørsted’s appeal at the Upper Tribunal.
The Internal Revenue Service will lose the funding as part of the US debt limit deal, while Amazon UK reaps the benefits of the 130% ‘super-deduction’.
The European Commission wanted to make an example of US companies like Apple, but its crusade against ‘sweetheart’ tax rulings may be derailed at the CJEU.
The OECD has announced that a TP training programme is about to conclude in West Africa, a region that has been plagued by mispricing activities for a number of years.
Richard Murphy and Andrew Baker make the case for tax transparency as a public good and how key principles should lead to a better tax system.
‘Go on leave, effective immediately’, PwC has told nine partners in the latest development in the firm’s ongoing tax scandal.
The forum heard that VAT professionals are struggling under new pressures to validate transactions and catch fraud, responsibilities that they say should lie with governments.
The working paper suggested a new framework for boosting effective carbon rates and reducing the inconsistency of climate policy.
UAE firm Virtuzone launches ‘TaxGPT’, claiming it is the first AI-powered tax tool, while the Australian police faces claims of a conflict of interest over its PwC audit contract.
The US technology company is defending its past Irish tax arrangements at the CJEU in a final showdown that could have major political repercussions.