Kosovo: Introduction of tax procedures for application of income tax treaties
Changes affecting application of income tax treaties to transactions with foreign entities announced
Changes affecting application of income tax treaties to transactions with foreign entities
The tax administration of Kosovo announced changes affecting the application of income tax treaties to transactions with foreign entities. These procedures are applicable from 1 January 2023.
The announcement provides that income tax treaty benefits provided either for Kosovo taxpayers or for foreign taxpayers that have generated income in Kosovo will not be automatic. Instead, an application procedure must be followed. Kosovo taxpayers will be required to submit income tax treaty applications to apply income tax treaties to transactions (payments) made to non-resident entities, which must include documentation and information on the nature of the transactions, the payment amounts and the tax withheld (if any). The applications must be submitted to the tax administration within the fiscal year in which the payments are made.
Depending on the nature of the transaction (i.e., payment for services categorized under business profits, dividends, interest, royalties, capital gains, etc.) a separate application must be submitted.
Read a January 2023 report prepared by the KPMG member firm in Albania
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