Entry into Force of the Protocol Amending the Double Taxation Agreement with Switzerland

The Protocol between the Government of the Republic of Serbia and the Swiss Federal Council amending the Agreement on the Avoidance of Double Taxation with respect to taxes on income and property entered into force on 18 July 2025, while its provisions will take effect as of 1 January 2026.

One of the key amendments concerns the exchange of information – the Protocol now provides for the sharing of data relating to all types of taxes, including information held by banks and other financial institutions.

The Protocol also clarifies rules concerning the profits of enterprises and related parties. It is stipulated that adjustments to the profits of a permanent establishment cannot be made after five years, except in cases of tax evasion or deliberate non-compliance. In addition, the other state is obliged to make a corresponding adjustment if the same profits have already been taxed in the first contracting state.

One of the most notable changes concerns the taxation of capital gains. Serbia and Switzerland now have the right to tax gains realized by a resident from the disposal of shares or interests in companies, where more than 50% of their value is derived directly or indirectly from immovable property located in the other contracting state.

These amendments are expected to enhance tax planning for residents of Serbia and Switzerland, strengthen legal certainty, align practices with international standards, and reinforce the capacity of tax authorities to combat tax avoidance and the misuse of double taxation agreements.