The taxation regime of Serbia is very appropriate for business because it is among the countries situated in Europe with the lowest rates of taxation.
Subjects of Taxation
- Citizens of Serbia must pay taxes on their international earnings. Corporations with their headquarters in Serbia or whose administration and supervision are located there, too.
- Foreign businesses that aren’t based in Serbia and don’t have an administration or controlling center there, but yet make money through a constant presence there. People from other countries are obliged to tax payments on their profits received only in Serbia.
The corporation tax rate in Serbia is 15%. Complementary taxes on fiscal assets are levied at the same 15% rate.
Serbia joins the group of historically advantageous nations for doing business.
This is significant information for anybody searching the country for launching a new firm, particularly when considering tax rates in other European countries like Latvia (20%) and Poland (19%). An average corporation tax rate of 22,5% in Europe.
Tax year
A Serbian firm may make a choice to have an alternative 12-month term if it is an overseas parental company that holds income reports for a tax term other than the fiscal year, even if the accounting term is by standard a calendar year. Nevertheless, prior Ministry of Finance permission is required. Additionally, in a rare state of affairs, the financial year might be less than twelve months.
Taxable base
It is set by the income and loss account that has been tax-adjusted. Profit and company revenue are both considered to be tax liabilities. The difference between earnings and expenditures is the taxable base.
Considering that the money is traveling inside the same legal organization, transforming the satellite company into the main business is not liable to dividend tax, which enables this format ideal for reviving outdated or dormant legal companies.
Assuming that allowance provided by a firm with a Serbian resident employee to another Serbian organization is free from corporation tax. A Serbian resident firm that has held at least 10% of the stock in an external company for one year is qualified to claim a credit for both the dividends and the international taxes it has paid.
180 days after the expiration of the fiscal period for which the taxable income is completed, a tax return and tax balance must be filed. For the foregoing year, earnings reports are delivered during the interval of February and July.
Features of taxation
- Serbia has a great number (approximately 60) of prevention of tax evasion deals with other countries around the world.
- Serbia has neither revenue nor a salary tax.
- The income tax for individuals is levied on wages, profits from unincorporated businesses, royalties from books, capital gains, rental properties, and other sources of revenue.
- Only Serbian-sourced profit is taxed for foreigners. An individual is deemed to be a resident for income tax purposes if they vindicate a place of abode, a principal place of business, or if they spend a total of at least 183 days in Serbia during the tax year.
- A tax resident certificate can be obtained after permanent staying in Serbia for one year.
- Presents and inherited wealth are subject to a fixed level of taxes that ranges from 1.5% to 2.5%.
- Transactions of real estate are subject to a 2.5% transfer tax.
- Taxes on property rates from 0.4% and 2%.
Value Added Tax
- 20%
- In some cases like health care or for some products, it is 10%
- It is paid every month or once every three months
- It is paid on imports of commodities, services rendered, commodities provided in Serbia.
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