(НЕ)ИЗВЕСНА БУДУЋНОСТ КРЕДИТА ЗА УШТЕЂЕН ПОРЕЗ У МЕЂУНАРОДНОМ ПОРЕСКОМ УГОВОРНОМ ПРАВУ
THE (UN)CERTAIN FUTURE OF TAX SPARING CREDIT IN INTERNATIONAL TAX TREATY LAW

Summary/Abstract: Tax sparing clause emerged in the double tax treaties 63 years ago. Despite criticisms, it can nowadays be found in about 15% of all treaties, with Serbia having this clause in 44% of its double tax agreements. The authors are of the opinion that this provision represents a confirmation of the right to introduce tax incentives as a part of any country’s right to tax, while pointing out the necessity of preventing abuses of that provision. After an analysis of the effects of tax sparing on foreign direct investments in Serbia and on outgoing investments of Serbia’s residents has been conducted, the remaining part of the paper is dedicated to the future of the tax sparing clause in the light of the OECD/G20 initiative for global introduction of a minimum effective rate of the profit tax. Tax sparing could then be endangered, while the proposed relief in the form of the substance carve-out that will exclude an amount of income representing a percentage of the carrying value of tangible assets and payroll would create arbitrariness and administrative difficulties. It is unlikely that developed countries will accept a carve-out specifically linked to the spared tax.

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