Serbia

Residents are taxed on their worldwide income, whereas non-residents are taxed on their income received in Serbia and worldwide income connected with their work in/for the Republic of Serbia.

The tax rates are fixed and vary from 10% to 20%. Determination of the tax base depends on the kind of income.

Tax residents are imposed with corporate tax on their income received in Serbia and their worldwide income.

Corporate income tax (CIT) rate is 15%.

VAT was introduced on 1 January 2005 and generally complies with the EU Sixth Directive.

The standard VAT rate is 20% for most taxable supplies. The reduced 10% VAT rate applies to basic food products, daily newspapers, medicines, publications, public transportation services, utility services, etc.

Besides the above tax rates, there is a 0% tax rate with the right of deduction of incoming VAT, which applies to exported goods, transportation and other services directly connected with export, international air transportation, etc.

Withholding tax is calculated and paid at a 20% rate on the following payments:

• dividends / profit shares,
• royalties (including related copyrights and intellectual property rights),
• interest income,
• income from market research services,
• accounting and audit services,
• other payments to a non-resident,

except when a DTT is applied to provide a lower rate or tax exemption.

Real estate tax is paid annually in Serbia by all legal entities and individuals who own real estate or hold interest in real estate located in Serbia, for example:

• ownership right;
• right of residence;
• right to rent a flat or building for a period exceeding one year or for an indefinite period;
• right to use urban land (municipal, public and other land owned by the state) more than ten ares in area.

If the taxpayer keeps accounting records, the real estate tax rate is fixed and may not exceed 0.40%.

Property transfer tax is imposed when the following is transferred for remuneration:

• real estate rights if at such a transfer no VAT is paid;
• intellectual property rights;
• ownership of used vehicles, ships and airplanes (except when they belong to the state);
• rights to use land under urban and/or public buildings;
• rights connected with expropriated real estate.

The contract price is used as the tax base; however, tax authorities have the right to adjust the tax base if they consider that the agreed price in the contract is lower than the market price. The tax rate is 2.5%.

None.

Contributions to the Social Insurance Fund:

For an employee:

• Pension insurance and disability insurance – 14%,
• Medical insurance – 5,15%,
• Unemployment insurance – 0,75%;

For an employer:

• Pension insurance and disability insurance – 10%,
• Medical insurance – 5,15%.

The minimum tax base for social insurance contributions determined by the Compulsory Social Insurance Contributions Act is set at 35% of the average monthly salary published in Serbia, and the maximum tax base for social insurance contributions is limited to five times the published average monthly salary according to the official statistics of Serbia at the time of payment of the salary.

None.

When calculating profit tax, the company must disclose information on related party transactions separately for transfer prices and for market prices. Positive difference between those prices (expense adjustments) and negative difference (income adjustments) are included in the taxable profit.

Serbia has entered into 62 Double Tax Conventions (DTCs) with the following jurisdictions:

62 DTCs: Albania, Armenia, Austria, Azerbaijan, Belarus, Belgium, Bosnia, Bulgaria, Canada, China, Cyprus, Denmark, Egypt, Germany, Hong Kong, Georgia, Greece, Hungary, India, Indonesia, Iran, Ireland, Israel, Italy, Kazakhstan, Qatar, Korea, Kuwait, Latvia, Spain, Latvia, Libya, Lithuania, Macedonia, Malta, Moldova, Netherlands, Norway, UAE, Pakistan, Poland, Romania, Russia, San Marino, Singapore, Slovakia, and Vietnam, Croatia, Czech Republic, Estonia, Finland, France, Libya, Lithuania, Luxembourg, Macedonia, Malta, Moldova, Montenegro, Netherlands, Norway, Pakistan, Poland, Romania, Russia, San Marino, Singapore, Slovakia, Slovenia, Spain, Sri Lanka, Sweden, Switzerland, Tunisia, Turkey, UAE, Ukraine.

In addition, Serbia has signed and ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). The Multilateral Convention came into force for Serbia on 1 October 2018.

Foreign exchange controls in Serbia are regulated by the Currency Transactions Act. In the country, payments between residents and non-residents are made in the national currency (RSD).

Citizens of Serbia are currency residents, but citizens of Serbia that live abroad longer than 1 year lose that status. Foreign citizens become currency residents if they stay in Serbia longer than 1 year based on a residence permit or work visa.

For currency residents, there are a number of restrictions regarding transactions on foreign accounts.