The UK signed a double taxation agreement with Kosovo on 4 June 2015. The agreement generally follows the provisions of the OECD Model.
Under the agreement the withholding tax on cross-border dividends is reduced to zero, except where the dividends are paid from income derived directly or indirectly from immovable property by an investment vehicle (that is not a pension fund) that distributes most of its income annually and where the income is tax exempt. In that case a 15% withholding tax may apply. The agreement provides for a Nil withholding tax rate on interest and royalties.
The Article on the mutual agreement procedure provides for a case to go to arbitration where the competent authorities have been unable to reach agreement within two years after an issue was referred to them.
The agreement will enter into force after it has been ratified by the two countries.
