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Serbia/May 2013 In January 2013, the double tax treaty with respect to taxes on income and capital between Serbia and the United Arab Emirates was signed and on March 15 2013 the Parliament of Serbia ratified the treaty. Article 5- Permanent Establishment  The Permanent Establishment (PE) considered as the fixed place of business such as a place of management, branch, office, factory, workshop, mine, oil or gas well. The term also includes: i.A building site, construction , assembly or installation when it lasts more then 18 months; and ii.The services are provided for a period or periods exceeding in the aggregate 183 days in any 12 month period, and these services are performed for the same project or for connected projects through one or more individuals who are present and performing such services in that other State. Article 6- Income from Immovable Property  Income gained from immovable property including income from direct use, letting or other as well as income from agriculture and forestry may be taxed in the state where the property is located. Article 7- Business Profits The profits of an enterprise shall be taxable in the other contracting state, if the enterprise carries on business there, through a permanent establishment situated therein, provided that the profits of the enterprise are taxed only as much as is attributable to that permanent establishment. Article 10- Dividends  If the beneficial owner of the dividends is a resident of the other contracting state, the tax may be charged as follows: 1)5% of the gross amounts of the dividends if the beneficial owner is a company which holds directly or indirectly at least 5% of the capital of the company paying the dividends; 2)10% of the gross amounts of dividends in all other cases. Article 11-Interest; Article 12-Royalties The withholding tax rate at 10% applies at source in both cases if the beneficial owner of the interest/royalties is the resident of the other contracting state. Article 13- Capital Gain Gains derived by a resident of a contracting state from the alienation of immovable property situated in the other contracting state may be taxed in that other state, except gains of the resident of a contracting state from the alienation of ships or aircraft operated in international traffic shall be taxable only in that contracting state. Article 23- Elimination of Double Taxation  If the resident of a contracting state derives income or owns capital that may be taxed in the other contracting state, the contracting state shall allow deduction from the tax on the income of that resident, in the amount equal to the income tax paid in that other state. Article 25- Exchange of Information Same provisions as seen in the OECD model convention. Analysis It is expected that based on this DTT and the other agreements regarding cooperation in the fields of defense, mutual incentives and protection of investments, the range of potential for cooperation between Serbia and the UAE will significantly grow. The first announced investments of the UAE to Serbia based on the above agreements are expected to be of around USD 500 million for agriculture and USD 220 million for military industry, and partnership in the air transportation industry. Eurofast Global, Belgrade Office Tel:  +381 11 3241 484