From our experience, many clients which are planning to start their business in Serbia, have problems because they can’t determine with certainty, which tax they are obliged to pay and what is the tax rate.

Our office decided to help our clients and potential investors in Serbia, and in one place we listed all taxes and tax rates.

I Corporate Taxes

Serbia’s tax regime is highly conducive to doing business. The corporate profit tax is among the lowest in Europe, while the Value Added Tax is among the most competitive in Central and Eastern Europe.

II Value Added Tax

The VAT rates are as follows:

  • The standard VAT rate – 20% (for most taxable supplies);
  • The lower VAT rate – 10% (for basic food stuffs, daily newspapers, utilities, etc.).

Contact our office, so we could check, in which category your company falls.

III Corporate Profit Tax

Corporate profit tax is paid at the uniform rate of 15%. Non-residents are taxed only based on their income generated in Serbia.

IV Withholding Tax

The withholding tax is not applied to dividend payments between Serbian entities. For non-residents of Serbia, a 20% withholding tax is calculated and paid on certain payments such as dividends, shares in profit, royalties, interest, capital gains, lease payments for real estate and other assets.

V Personal Income Tax

The personal income tax rate is 10% for salaries.

VI Annual Income Tax

The annual income is taxed if exceeding the amount of threefold the average annual salary in Serbia. The tax rate is 10% for the annual income amounting up to 6 times average annual salary in Serbia, and 15% for the  part of the annual income exceeding  6 times average annual salary in Serbia.

VII Taxes and Contributions

The rates for mandatory social security contributions are:

  • 14% for pension and disability insurance,
  • 5.15% for health insurance, and
  • 0.75% for unemployment insurance.

The total sum of social security contributions and income taxes that are calculated on the net income amounts to about 65% of net earnings.

Reduced Salary Load

Starting from July 1st, 2014. new employment entitles employers to a sizable relief of taxes and contributions paid on net salary from the moment of employment until June 30, 2016.

  • 1-9 new jobs: 65% reduction;
  • 10-99 new jobs: 70% reduction;
  • 100+ new jobs: 75% reduction.

This reduces the total salary load to very competitive 20%*.

*an estimate for an average salary in Serbia

We hope that this text will help you, to understand tax system in Serbia, if you have any questions or need additional information, feel free to contact our office.

*Source: Siepa