The France-Serbia tax treaty: the 1974 text signed with Yugoslavia

Tax relations between France and Serbia are based on the convention signed on March 28, 1974, with Yugoslavia, which the French tax authorities indicate is applicable to Serbia. This convention caps dividends at 5 or 15 13% of the taxable income, reserves interest and royalties for the recipient's country, and provides for exemption in France for most income. It covers income taxes (personal income tax and corporate income tax in France), but not wealth or inheritance taxes. This page presents the articles read in the consolidated text.

A Yugoslav text, an agreement in 2003, the MLI since 2019

The convention entered into force on August 1, 1975. An agreement signed in Paris on March 26, 2003, with the Council of Ministers of Serbia and Montenegro confirms that it continues to have effect in bilateral relations; according to the BOFiP (French Official Tax Bulletin), the same applies to Serbia. The consolidated text remains drafted in the name of Yugoslavia.

The MLI amends the convention. The CML has been in force since October 1, 2018, for Serbia and January 1, 2019, for France; the BOI-ANNX-000511 list gives effects from January 1, 2019, for withholding taxes and from July 1, 2019, for other taxes. A clause in the text denies the benefit of the convention if one of the main objectives of an arrangement is to obtain it.

Maximum deductions and key rules

Exemption in France, tax credit for three items

Article 23A is the distinctive feature of this text. France exempts income taxable in Serbia under the convention, except for income covered by Articles 10 (dividends), 16 (profit-sharing bonuses), and 17 (artists and athletes), for which it grants a tax credit equal to the Serbian tax, without exceeding the French tax on this income. However, French tax may still be calculated at the rate applicable to the total income.

Form 5000: Proof of Residence

According to the BOFiP (Official Bulletin of Public Finances), reduced rates or exemptions require proof of residence in Serbia (Article 4) using form 5000, a residence certificate endorsed by the Serbian tax authorities. Appendices 5001 (dividends), 5002 (interest), and 5003 (royalties) must accompany the application. Royalties of French origin paid to a Serbian resident are not subject to the withholding tax stipulated in Article 182 B of the French General Tax Code (CGI).

Residence

Article 4, paragraph 2, categorizes natural persons in the following order: permanent home, center of vital interests, habitual residence, nationality, and then agreement between authorities. For legal entities, it is the place of effective management.

Dividends of €100,000: a numerical example (fictitious profile)

Situation. A French company, fictitious profile, pays €100,000 in gross dividends to a Serbian company that has directly held 25,% of its capital for more than 365 days.

Issue. She wants to know the maximum tax withheld in France.

Strategy. She applies Article 10 § 2, then has form 5000 and its annexes drawn up.

Result. The ceiling is €5,000 (5 %). Without the ownership requirement, it would be €15,000 (15 %), i.e., €10,000 more. These are maximums, not the actual tax due.

What this page does not cover

It does not address Serbian taxes, nor does it detail Articles 7, 9, 14, 16, 17, and 21. The convention contains no articles on inheritance. Article 2 does not list any wealth tax; the word "wealth" appears only in Article 27, concerning diplomatic and consular agents.

What changes depending on your situation

• Your residence as defined in the agreement.
• The nature of the income and, for dividends, the rate and the holding period.
• The days spent in each state during the fiscal year.
• Documents to be provided to the administration to obtain the reduced rate.

An article should be read in light of the facts in your case, and no result is guaranteed in advance.