Igor Živkovski, Živković Samardžić Corporate and M&A Partner, wrote articles titled “Rollover Privilege” and “Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting”, which appeared in “Poreski informator” magazine, published by Forum Media, Serbian subsidiary of The Forum Media Group, an international media company offering cutting-edge education and training.
In the article titled “Rollover Privilege”, Igor wrote about the roll-over privilege, a special tax regime for the taxation of capital gains to which resident legal entities are subject in the event of status changes. Any change of the status of a resident taxpayer made in conformity with the Company Law shall defer the onset of tax liability based on capital gains. The tax liability based on capital gains shall run from the moment a legal entity sells the assets it had acquired on the basis of status change. However, the right to the deferment of payment of corporate profit tax on the capital gains shall apply, if the owner of the legal entity which had transferred property on the occasion of status change has received compensation in the form of shares or interest in the legal entity to which the property was transferred, as well as any compensation in cash, the amount of which is not greater than 10% of the par value of the obtained shares or interests.
In the article titled “Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting”, Igor elaborates on the BEPS Multilateral Convention, which encompasses provisions on hybrid mismatches, treaty abuse, avoidance of permanent establishment status, improving dispute resolution and arbitration. The object and purpose of the Convention is swift and consistent implementation of the agreed solutions aimed at preventing tax evasion or avoidance via modifications of the existing bilateral tax treaties, while providing for a high level of flexibility in the implementation. By adopting the Law on Ratifying the Convention in 2018, the Serbian National Assembly ratified this international agreement signed in June of 2017 by the Republic of Serbia and 75 other countries and jurisdictions in Paris, which became the basis for changes of double tax treaties. Serbia specified all its tax treaties as the “covered tax agreements” but Germany, Switzerland and Sweden did not do the same with their respective treaties with Serbia. Both articles were originally published in “Poreski informator” magazine’s first issue and are only available in Serbian. Click here to view the table of contents of the issue and to subscribe.