Last modified: 22/01/2025 12:55

Corporate taxation

	Rate
Corporate income tax rate	15 (1)
Branch tax rate	15 (2)
Capital gains tax rate	15 (3)

1. Effective tax rate can be reduced up to zero due to Tax incentives.
2. Effective tax rate can be reduced up to zero due to Tax incentives.
3. Effective tax rate can be reduced up to zero due to Tax incentives.

Residence: A company is resident in Serbia if it has its legal seat (registered office) or its effective management and control there.

Basis: Resident companies are taxed on their worldwide income, except for profits derived from foreign branches, foreign immovable property, foreign royalty, foreign dividends and foreign interests, which are in total or partly tax exempt. Non-resident companies are taxed on permanent establishment (PE)/branch income and/or on immovable property located in Serbia. Branches are taxed mostly in the same way as subsidiaries.

Taxable income: The taxable income of a company is determined by adjusting the accounting profit as recorded in the income statement and determined in accordance with IFRS, IFRS for SME’s or local GAAP and accounting legislation, in accordance with the provisions of corporate income tax. Foreign source income is included in taxable income, but relief is granted for income from dividends, royalty, foreign immovable property and interests. Business expenses are deductible.

Significant local taxes on income: No.

Alternative minimum tax: No.

Taxation of dividends: Dividends from Serbian companies are tax exempted. Dividends received from non-residents are included in the taxable base of the recipient company, as grossed up for the foreign withholding tax and tax on profits, provided that the Serbian company holds at least 10% of the distributing company’s shares. Any foreign withholding tax may be set against the corporate tax liability, but only to the extent of Serbian corporate tax liability on that income.

Capital gains: Capital gains form part of a resident company’s taxable profits. Capital gains from patents and intellectual assets are only partial taxable (only 20% of such gains is taxable).

Losses: May be carried forward for five years and losses from business operations may be set off against gains from business operations, and capital losses may be set against capital gains. Losses may not be carried back.

Foreign tax relief: Foreign-source income is included in taxable income, as grossed up for the foreign withholding tax. Any foreign withholding tax may be set against the corporate tax liability, but only to the extent of Serbian corporate tax liability on that income.

Participation exemption: See above under ‘Taxation of dividends’.

Holding-company regime: No.

Tax-based incentives: Incentives include: • Exemption for up to 10 years on the proportion of corporate tax liability that the investment bears to taxable profits for companies investing a minimum of RSD 1000 million and employing at least 100 new workers • Enhanced (100%) deductions for R&D expenditure • 80% relief for qualifying patent-box profits • The tax liability for companies employing and training disabled persons is reduced by the percentage of such persons in the total number of employees • 30% tax credit for investments in innovative company in Serbia • Transition rules for former incentives.

Group relief/fiscal unity: Consolidated filing is possible. All members of the group must be resident in Serbia and the parent company must directly or indirectly control at least 75% of the shares in other group members. Tax consolidation must continue for at least five years. No fiscal unity.

Small company/alternative tax regimes: No.

Corporate taxation: compliance

Tax year: accounting period (usually the calendar year, except if some company demand other period).

Consolidated returns: Each group member must file its own tax return and the parent company files a consolidated tax return for the whole group. In a consolidated tax return, losses of one or more group members may be set against the profits of other group members. Each group member is then liable to pay that proportion of the consolidated tax liability which its taxable profits bear to the group’s taxable profits. If the consolidated return shows a net loss, this loss may not be carried over to subsequent periods, nor carried back.

Filing and payment: Tax returns must be filed with the tax authorities within 180 days of the end of the tax year. A self-assessment procedure applies.

Penalties: Penalties apply for late filing or failure to file.

Rulings: Rulings may be obtained from the tax authorities on various Serbian tax matters. See also “Disclosure requirements” below.

Taxation of individuals

	Rate
	Income Tax
Employment income (up to 28 423 RSD monthly)	0%
Employment income (above 28 423 RSD monthly)	10%
Business income	10%
Dividends and interest	15%
Royalties	20%/10%, 11.4%, 13.2% (effective)
Capital gains earned as a business	10%
Capital gains earned in private wealth	15%
Rental income	20%/15% (effective)
Income from personnel insurance	15%
Other income	20%/16% (effective)
Complementary tax 4 269 565 – 8 539 128 RSD	10%
Complementary tax above 8 539 128 RSD	15%

1. Complementary tax 4 269 565 – 8 539 128 RSD – these figures were apllied in FY 2024. based on information from FY 2023. The figures which will be applied in FY 2025, based on information from FY 2024, are not known yet. It will be presented from March 2025.
2. The same explanation as above for complementary tax above 8 539 128 RSD.

Residence: An individual is considered to be Serbian-resident if he or she has a permanent residence or center of vital interests in Serbia or is physically present in Serbia for at least 183 days within a period of 12 months beginning or ending in the respective tax year.

Basis: Resident individuals are taxed on their worldwide income. Foreign-source income is included in taxable income, as grossed up for the foreign withholding tax. Any foreign withholding tax may be set against the individual tax liability, but only to the extent of Serbian individual tax liability on that income. Non-residents are taxed on Serbian income, especially employment income, business profits and profits attributable to Serbian immovable property, or intellectual rights in Serbia, and in some other cases.

Taxable income: All income derived from compensation for work performed and income from capital (real and movable property) are subject to income tax. Income from foreign capital is taxed as grossed up for the foreign withholding tax. Any foreign withholding tax may be set against the individual tax liability, but only to the extent of Serbian individual tax liability on that income.

Capital gains: Taxable capital gains may be generated by the sale or other form of alienation for consideration of Immovable property, Industry and intellectual property rights, digital property or stocks, shares, securities, certain bonds and investment units, except those in voluntary pension funds. A capital gain is determined as the difference between the sale or market price and adjusted purchase price of the asset concerned. If the amount is negative, the result is a capital loss. Capital losses can be offset against capital gains occurring in the same period. A net capital loss may be carried forward for a maximum of five following years. Capital gains from property owned for more than 10 years are exempt.

Deductions and allowances: Various expenses may be deducted in computing taxable income, including transportation to the working location, daily allowances for business travel and others. Personal allowances are granted to taxpayers, their spouses and dependent children.

Foreign tax relief: Foreign-source income is included in taxable income, as grossed up for the foreign withholding tax. Any foreign withholding tax may be set against the individual tax liability, but only to the extent of Serbian individual tax liability on that income.

Taxation of individuals: compliance

Tax year: Calendar year

Filing and payment: Self-assessment, by employer or by Tax authorities. Tax on employment income is withheld by the employer for all employees. Tax filing dates vary by type of income.

Penalties: Penalties apply for late filing or failure to file.

Rulings: See above under ‘Corporate taxation’.

Withholding taxes

Type of Payment	Resident recipients		Non-residents recipients
	Company	Individual	Company	Individual
	Rate (%)	Rate (%)	Rate (%)	Rate (%)
Dividends	0%	15%	20%	15%
Interest	0%	0%(1)/15%	20%	0%(1)/15%
Royalties	0%	20%/10%, 11.4%, 13.2% (effective)	20%	20%/10%, 11.4%, 13.2% (effective)
Capital gains	0%	15%	20%	15%
Fees for technical services	0%	20%	0%/25%(2)	0%(3)/20%(4)

1. On bank deposits in RSD and on bonds of Republic Serbia, National Bank and local authorities.
2. Withholding tax pays only residents of tax heavens. Also, a resident company of tax heavens pays 25% tax on interests and royalties.
3. If work is performed abroad.
4. If work is performed in Serbia.

Branch remittance tax: No.

Anti-avoidance legislation

Transfer pricing: There is formal TP legislation and documentation requirements, and related party transactions have to be carried out at arm’s length terms. Generally, Serbia follows OECD principles for TP, including CbC reporting requirements.

Interest restriction: There is interest restriction only for intra – group loans. Thin capitalization rules require a minimum debt-to-equity ratio 4:1 (for banks and leasing companies 10:1). Tax authorities prescribed maximum interest rates for intra group loans.

Controlled foreign companies: No such regime.

Hybrid mismatches: No special rules, but the participation exemption does not apply to income that is tax deductible in the source country.

Disclosure requirements: TP reports for transactions with related parties. CbC reporting for qualifying enterprises. Advance tax rulings may be subject to the spontaneous exchange of information.

Exit taxes: Only for businesses at the same rates and with same rules as income taxes.

General anti-avoidance rule: Still under development (without enough court decisions): • The taxpayer’s legal structure is unusual, inappropriate or inadequate having regard to its economic purpose • Tax considerations are deemed to be the only motive for the transaction and • The transaction effectively would lead to significant tax savings if it were accepted by the tax authorities. Measures against treaty abuse may apply, but there is no relevant practice about it.

Digital services tax and Other significant anti-avoidance legislation: No special digital service tax.

Value-added tax/Goods and services tax

Type of tax: Value-added tax (VAT) similar to EU model. Applies to supplies of most goods and services and to imports. There is a broad range of exempt supplies (some exempts allowing deduction of input tax).

Standard rate: 20%

Reduced rates: 10%

Registration: Serbian businesses must register for VAT where taxable supplies and VAT exempt supplies allowing deduction of input tax have exceeded RSD 8 000 000 in twelve months. Voluntary registration possible.

Filing and payment: Monthly or quarterly return period, filing and payment within 15 days after end of month or quarter.

Social security contributions

	Employer	Employee
	Rate (%)	Rate (%)
Social security contributions	15.15%	19.9%

 Social security contributions are payable by employers (15.15% on salary) and employees (19.9% from salary). The employer deducts the employee’s contributions from salary. The ceiling is 656.425 RSD monthly salary. If monthly salary is below 45.950 RSD, contributions are payable on that amount, regardless of actual salary.

Self-employed

Self – employed contribution is 35.05%, on their taxable monthly income (minimum base 45.950 RSD monthly, maximum base 656.425 RSD monthly).

Other taxes

Capital duty: No.

Immovable property taxes: Depends on local authorities. For resident companies, branches of foreign companies and Serbian entrepreneurs, up to 0,4% for buildings and up to 0,3% for land. For individuals and foreign subjects without bookkeeping in Serbia, rates are progressive for buildings 0 – 2%, and for land is up to 0,3%.

Transfer tax: Transfer tax is applicable on certain transactions, including the transfer of real estates, intellectual property, used vehicles, used ships, used aircrafts (only if transaction is exempt from VAT). Tax rate is 2.5%.

Stamp duty: No.

Net wealth/worth tax: No.

Inheritance/gift taxes: Inheritance and gift tax rate is 2.5% (1.5% for parents and cousins and offspring of cousins). Inheritances/gifts to spouse and direct descendants are exempt.

Other: In Serbia are also applied: Custom duties (Serbia has free-trade agreements with EU, Russia, EFTA, CEFTA etc.), Excise duties (including oil and oil derivatives, biodiesel, cigarettes and other tobacco products, alcoholic beverages coffee and electricity), ecological tax, taxes on waste products, radio and television fee, and others

Tax treaties

Serbia has concluded over 60 full double taxation treaties on income and capital gains and has a small number of tax information-exchange agreements. It has over 30 bilateral social security agreements. It is also a signatory to the OECD Multilateral Instrument.