On 22 March 2012, the Protocol amending the Double Tax Treaty has been signed between the two countries. It will come into effect on the 1st of January following the year in which ratification takes place.
The new double Tax Treaty is considered to be much more effective than the one it replaces. The main changes are the following:
- Withholding tax on dividends has been reduced from 10% to 0% in the cases where the shareholder owns at least 10% in the company distributing the dividends and 5% in all other cases
- Withholding tax on royalties remained unchanged at 5%
- Director fees earned by an individual will now be taxable only in the country in which he/she resident.
- Tax sparing credits will no longer be given
The new Treaty is in line with the articles of the OECD Model Treaty