The Tax Administration of Kosovo (TAK) has informed taxpayers on changes affecting the application of DTT provisions to transactions with foreign entities. The announcement from the TAK provides that DTT benefits provided either for the Kosovo taxpayers or for foreign taxpayers that have generated income in Kosovo will not be automatic, instead an application procedure is introduced. The Kosovo taxpayer will be required to submit a DTT application to ensure that the DTT provisions are applicable to given transaction (payment) made to non-resident entities. Documentation and information on the nature of the transaction, the payment amounts and the tax withheld (if any) will be provided by the Kosovo taxpayer through the DTT application submitted to the TAK.
The DTT application should be submitted to TAK within the fiscal year in which the payment is made. The DTT application is reviewed by TAK and confirmed accordingly. Failure to submit the DTT application may negate DTT benefits to the foreign taxpayer. TAK has not provided further details on implications that may arise due to non-submission of the DTT applications.
Depending on the nature of the transaction (i.e. payment for services categorized under business profits, dividends, interest, royalties, capital gains, etc.) a separate DTT application is submitted. The format of the DTT applications by type of transaction may be found in the following link: Application Forms for DTA.
Entry into force
These procedures are applicable from 1 January 2023.