Taxes in Serbia are public levies of the Republic of Serbia paid by certain categories of natural and legal persons, so-called Serbian tax residents. The tax system of Serbia is basically the european continental tax system, which does not have any significant differences from the tax system of the European Union countries. However, there are differences.
Taxes in Serbia differ from the tax systems of the European Union countries primarily in tax rates, tax procedure and deadlines for filing tax returns, i.e. payment deadlines. With the exception of the tax procedure itself and tax inspections, the tax system is largely digitized.
As for taxes in Serbia, there are numerous subdivisions in terms of the tax subject, taxpayer, deadlines and the like, so we list the main types of taxes in Serbia:
- Corporate tax
- Value added tax
- Annual Income tax
- Income tax
- Flat taxation
- Tax on dividends and profit participation
- Real estate rental tax
- Capital gains tax
- Tax on the transfer of absolute rights
- Inheritance tax
- Tax on gift.
taxes in serbia for its tax residents
Tax residency means a person who is obliged to pay taxes in Serbia, regardless of whether a natural person is registered at an address in Serbia or whether the legal entity has its registered office or branch in Serbia.
According to the provisions of the Law on income tax of the Republic of Serbia, a tax resident of the Republic of Serbia is a natural person who stays in Serbia for 183 or more days in a 12-month period, continuously or temporarily.
Even a natural person who does not meet the minimum residency requirement in Serbia is a tax resident if he or she has a residence or a center of his or her business and life interests on the territory of Serbia. The very concept of the center of business and life interests is a question of fact and can be proven in tax proceedings.
Corporate tax
Corporate tax for legal entities registered in Serbia is 15% of the realized profit. In Serbia, there is no progressive taxation of legal entities, no municipality tax and no solidarity surcharge.
Legal forms whose profits are subject to this tax are partnerships, limited partnerships, limited liability companies, joint-stock companies, entrepreneurs with an annual turnover of more than 6 million dinars (50,000 EUR), but also other legal entities that were not established with the intention of making a profit and that generate income by selling products on the market or providing services (political parties, trade unions, religious communities, associations and foundations).
VAT as a part of taxes in Serbia
Value added tax (VAT) is a tax that is part of the budget of the Republic of Serbia. The subject of VAT taxation is the supply of goods and the provision of services provided by the taxpayer for a fee, as well as the import of goods into Serbia.
The general VAT rate is 20%, for certain goods and services a special rate of 10% is prescribed.
No VAT is paid for certain transactions. We list the most common examples:
- Transport and other related services related to the import of goods
- Sales of goods sent abroad by the taxpayer
- Sales of goods sent abroad by the foreign recipient
- Transport of goods sent abroad by the passenger in personal luggage for non-commercial purposes under the conditions prescribed by law.
Annual Income tax in Serbia
Annual tax in Serbia is a tax paid by taxpayers in Serbia whose total annual income exceeds the sum of three average annual salaries and the amount of tax deductions granted to them. You can find more about this topic in the text Annual tax in Serbia.
Income tax in Serbia is a tax paid on income from employment or on income outside employment. You can find more about this tax in the text Salary in Serbia as well as in the text Wages in Serbia.
Flat taxation
Lump sum (flat) taxation is characteristic of the legal form of a registered entrepreneur in Serbia. Namely, natural persons can register as independent service providers and pay a lump sum tax on income up to a maximum of 5 million dinars per year (50,000 EUR). A lump sum tax is a tax that the Tax Administration of Serbia sets separately for each entrepreneur, based on estimates of the income that person will earn, up to the stated amount.
If an entrepreneur earns an annual income of more than 50,000 EUR, he is obliged to keep accounts as a limited liability company, i.e. pay profit tax. This ends the lump sum taxation.
Other taxes in Serbia
A very common tax in Serbia is capital gains tax. Such a tax applies to income from:
- Interest on loans, savings and other deposits and securities
- Dividend and participation in the profit of a legal entity
- Income from the investment fund
- Use of the company’s services and goods by the company’s owners for their private needs and personal consumption.
The tax rate on capital gains in Serbia is 15%.
The capital gains tax/speculation tax in Serbia represents the difference between the sale price of rights, shares and securities and their purchase price, which is realized by transferring:
- Rights to real estate
- Copyrights
- Shares of legal entities, shares and other securities
- Investment fund shares
Digital assets.
Such income is taxed in Serbia with the capital gains tax/speculation tax at a rate of 15%.
The tax on the transfer of absolute rights in Serbia is a tax paid upon transfers for consideration:
- Ownership rights to real estate;
- intellectual property rights;
- ownership rights to used ships, vehicles or aircraft, with the exception of mopeds, tractors and work machines
- rights to use building land
- the right to permanent use of a parking space in an open-plan residential block or residential complex.
The tax rate for the transfer of absolute rights in Serbia is 2.5%.
Rental tax in Serbia is a tax on the income that the taxpayer receives from renting or subletting real estate. The rental tax rate in Serbia is 20% and is applied to the basic rent minus the utilities of 25%.
Inheritance tax in Serbia is a tax paid by the heir. The basis for calculating inheritance tax is the value of the inherited property, with the tax rate being 1.5% and 2.5% depending on the heir’s succession. Tax exemption is available for a specific succession, the closest family members of the testator.