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Canada Signs Tax Treaty with Serbia - by Brian Mustard 

Global Tax Adviser


May 08, 2012


Brian Mustard
Montreal, International Corporate Tax


The Department of Finance recently announced that Canada has signed a Tax Convention with Serbia on April 27, 2012. The Convention limits the rate of withholding tax to 5% for dividends paid between affiliated companies, 15% for dividends paid in all other cases, and 10% for payments of interest and royalties. The Convention also limits withholding tax rates and include provisions for the exchange of tax information that reflect the standards set by the OECD.

This Convention will enter into force after each country has notified the other that the Convention has been ratified by its government. In Canada, the Convention will apply to tax withheld at source on amounts paid or credited to non-residents beginning on January 1 of the first calendar year after the Convention has entered into force and, for other taxes, for taxation years beginning on or after January 1 in the calendar year after the Convention has entered into force.


So, if the treaty is ratified in 2012, a corporation that has a March 31 year-end will be subject to the new treaty for its March 31, 2014 taxation year (i.e., the treaty will take effect on April 1, 2013).


For more information, contact your KPMG adviser.


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