On 16 March 2026, Decision of the Council of Ministers No. 4 of 2026 entered into force. The Decision introduces a mechanism allowing the direct application of withholding tax rates under double tax treaties.
Under the previous practice, withholding tax was generally applied at the domestic rates set out in the Income Tax Law, with non-resident recipients subsequently required to claim treaty relief through a refund procedure. The new provisions allow treaty benefits to be applied at source, subject to specific conditions and procedural requirements.
In this Alert, our Middle East Managing Partner, Olivier Remacle, and our Tax Principal, Barbara Schwartz, outline the key features and implications of the new regime.