close
Share with your friends

Serbia: Change of position, withholding tax and interest-rate swaps

Serbia: Change of position, withholding tax

The tax authorities have revised their position concerning the withholding tax treatment with respect to interest-rate swaps.

1000

Related content

Ministry of Finance on 25 September 2019 issued an opinion (No. 430-00-493/2019-04) regarding the treatment of interest-rate swaps from a corporate income withholding tax perspective.

According to the 2019 opinion, income of a non-resident legal entity from an interest-rate swap—concluded as a transaction separate from financing for the purpose of hedging the interest-rate risk—is not considered to be interest income. As such, income from such an interest-rate swap would not be subject to withholding tax on interest.

This approach recognizes the substance of interest-rate swap agreements as an exchange of cash flows in order to hedge parties against interest-rate risk, but is contrary to the position taken by the Ministry of Finance in a 2007 opinion (No. 430-01-00328/2007-04 dated 12 December 2007).

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal