Serbia: Business Environment

Accounting Rules

Tax Year: The financial year begins on 1 January and ends on 31 December of the same year.
Accounting Standards: All enterprises from the largest listed companies to the smallest unincorporated proprietorships must comply with IFRS.
Accounting Regulation Bodies: International Accounting Standards Board
Accounting Reports: All accounting operations must be recorded in the journal (dnevnik) in chronological order or according to the order of receipt of the accounting documents. In the ledger (glavna knjiga) all the accounts appear (changes concerning ownership, liabilities, capital, revenue and expenditure). This document is a basis for creating financial reports. The annexes (pomocne knjige) are analytical documents for non-material investments : real estate, equipment and machines, long term financial investments, stocks etc.
Companies must draw up financial reports for the current year : a balance sheet of current financial standing (bilans stanja), a statement of income (bilans uspeha), report on liquid assets (isvestaj o tokovima gotovine), report on changes concerning capital (izvestaj o promenama na kapitalu), explanatory notes (napomene uz finansijske izvestaje) and annexes (statisticki aneks).
Publication Requirements: The obligations concerning publication and audit depend on the size of the company.
All companies must file their financial reports with the National Bank of Serbia, by the end of February for small companies and by the end of April for medium-sized and large companies. The Bank handles these reports and publishes the financial standing of the companies.
Professional Accountancy Bodies: The Association of Accountants and Auditors of Serbia
Certification and Auditing: Auditing is mandatory for large and medium-sized companies, it is optional for small companies which can be audited by the fiscal administration. The audit must be carried out according to international standards, by members of the Chamber of Certified Auditors (Komora ovlascenih revizora). You can contact an external auditor: Deloitte, PricewaterhouseCoopers, Ernst & Young, KPMG.
Accounting News

Tax Rates

Consumption Taxes

Nature of the Tax: Value Added Tax (VAT) - Porez na dodatu vrednost (PDV)
Tax Rate: 20%
Reduced Tax Rate: A reduced rate of 10% applies to basic foodstuffs and the supply of medicines and medical care devices (e.g., prostheses).
The export of goods, transport and other services directly related to exports, international air transport, are zero-rated with the right of deduction of the input VAT. properties (except for first-time transfer of ownership); land; supply of goods for which acquirer did not have the right to deduct input tax; rental of flats if used for housing; financial services; insurance services; postal services; religious services; printing and sale of publications; public broadcasting services (except those with commercial character) education; medical services; financial services; charity; culture and entertainment; organizing of gambling and lotteries services; etc.
Other Consumption Taxes: Imports are subject to VAT in the same way as national production (except in the free zones). Excise duties are levied on producers and importers of the following goods: oil derivatives; tobacco products and fuels for filling electronic cigarettes; alcoholic beverages; coffee and electricity, bioliquids and biofuels.

Corporate Taxes

Company Tax: 15%
Tax Rate For Foreign Companies: Residents are taxed on their worldwide income. Non-resident companies are only taxed on the part of their income generated through a permanent establishment in Serbia.
An entity is deemed to be resident of Serbia if it is established or has its place of effective management and control in Serbia.
Capital Gains Taxation: Capital gains obtained by resident companies are included in the annual income tax return and subject to tax at 15%, whereas those obtained by non-resident entities are taxed at 20% (unless a lower rate is provided under a tax treaty). Non-residents should appoint a fiscal representative in Serbia who should submit a tax return within 30 days from the realisation of capital gain.
Gains can be offset with capital losses occurring in the same period, and capital losses can be carried forward for five years.
Main Allowable Deductions and Tax Credits: Depreciation of tangible and intangible assets is tax-deductible at rates ranging from 2.5% to 30%. Goodwill is not deductible.
Start-up fees are generally deductible. Interest charges that exceed the thin capitalisation limits and transfer pricing thresholds are not deductible.
Bad debts are tax-deductible if they are at least 60 days overdue.
Donations to charities and humanitarian aid to national and local authorities in urgent cases are deductible up to 5% of income.
Fines are not deductible while taxes that do not depend on the profitability of the company are deductible.
Expenses directly related to qualifying R&D activities performed in Serbia are eligible for a double deduction. The Serbian intellectual property box regime offers an exclusion from the corporate income tax base of 80% of qualified income received by a taxpayer for the use of registered copyrights, patents, or related rights (does not include income derived from the disposal of the rights).
Investments in newly established companies that perform innovative activities give the right to a tax credit equivalent to 30% of the investments made (capped at RSD 100 million).
Entertainment expenses are deductible up to 0.5% of income. Finally, membership fees to chambers of commerce and associations (excluding political parties) are deductible up to 0.1% of income.
Tax losses can be carried forward for up to five years. The carryback of losses is not permitted.
Other Corporate Taxes: A property tax is payable not only by homeowners but also by long-term tenants (one year or more) and urban land users (ten acres or more). The maximum rate is 0.4%.
A transfer tax is levied on all types of transfers (property, vehicles, intellectual property, etc.) at a rate of 2.5%.
Although there are no stamp duties, the competent authorities and/or notary may charge fees when certifying documents relating to property transfers.
Social security contributions payable by the employer amount to 16.65% of the gross salary (11.5% for pension and disability insurance and 5.15% for health insurance), limited to five average monthly salaries.
Other Domestic Resources: Tax Administration; Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

	Serbia	Eastern Europe & Central Asia	United States	Germany
Number of Payments of Taxes per Year	33.0	13.9	10.6	9.0
Time Taken For Administrative Formalities (Hours)	225.5	226.2	175.0	218.0
Total Share of Taxes (% of Profit)	36.6	36.5	36.6	48.8

Source: Doing Business - Latest available data.

Individual Taxes

Tax Rate

Personal income tax rate	Rate depends on the type of income
Employment income (salary)	10% (for taxpayers under the age of 40, the annual tax base is further reduced by an amount equal to three times the Serbian annual average wage)
Income from capital	15%
Royalty, rental and other income	20%
Supplementary annual taxation	10% in case of taxable income between three and six times the average annual salary (six times for taxpayers below 40 years of age) 15% in case of taxable income above six times the average annual salary (nine times for taxpayers below 40 years of age)

Allowable Deductions and Tax Credits: Personal allowances are available to the members of the taxpayer's family that are financially supported by the taxpayer.
Taxpayers have the right to a 40% deduction of their average annual salary, plus 15% of the average annual salary per dependent. In any case, the total deduction cannot exceed 50% of the taxable income.
Special Expatriate Tax Regime: Residents are taxable on their worldwide income, whereas non-residents are taxable on their Serbian-sourced income and worldwide income related to their work in/for the Republic of Serbia.
An individual is considered resident for income tax purposes if he/she has a residence or centre of business and/or vital interests in Serbia or stays in the country for at least 183 days in a 12-month period commencing or ending in the tax year concerned.

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed: See the list of the Double Taxation Agreements
Withholding Taxes: Dividends: 0 (resident company)/20% (non-resident company)/15% individuals; Interest: 0 (resident company)/20% (non-resident company, 25% if resident in a tax heaven)/15% individuals; Royalties: 0 (resident company)/20% (non-resident company; individuals)/25% (company resident in a tax haven)

Sources of Fiscal Information

Tax Authorities: Overview of Serbia's tax measures in response to Covid-19
Tax Administration
Other Domestic Resources: Customs Administration

Intellectual Property

National Organisations: The organization responsible for intellectual property protection in Serbia is the Federal Bureau for Intellectual Property (Zavod za Intelektualni Svojinu). It depends on the Ministry of the Economy and Foreign Trade.
International Membership: Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)

National Regulation and International Agreements

Type of property and law	Validity	International Agreements Signed
Patent Patents Act	20 years	Patent Cooperation Treaty (PCT)
Trademark Trademark Protection Act 1 January 2005	10 years	Trademark Law Treaty Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks
Design Protection of Designs Act 1 January 2005	25 years
Copyright Copyright and associated rights Act 1 January 2005	70 years	Berne convention For the Protection of Literary and Artistic Works WIPO Copyright Treaty
Industrial Models Design Protection Act 1 January 2005	25 years

Legal Framework

Independence of Justice: Judicial power is independent, the highest authority being the Constitutional Court.
The Language of Justice: Serbian.
Recourse to an Interpreter: It is possible to have an interpreter at a trial.
Sources of the Law and Legal Similarities: Following Montenegro's declaration of independence on June 3rd 2006 a new constitution was drawn up; it was put to referendum and ratified on 28 and 29 October 2006. The previous constitution dated from 27 April 1992.
Checking National Laws Online: Website of Serbian lawyers
Website about commercial laws in Serbia

Standards

National Standards Organisations: Ministry of the Economy, website in Serbian.
Integration in the International Standards Network: The organization which fixes norms, tests and certifications in Serbia is the Institute for Standardization (Zavod za Standardizaciju - ISS). The organization which grants accreditations is Accreditation Board (ATC). Both organizations depend on the Ministry of the Economy. ISS represents Serbia in international and European organizations for standardization (ISO, IEC, CEN and CENELEC), and in systems/schemes for certification (IECEE, IECEx and IECQ).
Classification of Standards: The Serbian standards are the SRPS. For more information about the classification of standards consult the ISS website.
Online Consultation of Standards: Consult the standards in the catalogue of the ISS website.
Certification Organisations: Accreditation Board of Serbia

Business Practices

General Information: Ministry of Foreign Affairs of Denmark, Business culture in Serbia
Export.gov, Business Customs in Serbia
Opening Hours and Days: Food shops : 6 am - 9 pm in the week and on Saturday, 8 am - 2pm on Sunday.
Administration : 8 am - 4pm every day of the week.
Banks : 8 am - 7pm in the week, 8 am - 3 pm on Saturday.

Public Holidays

New Year's Day	1 January
Orthodox Christmas	7 January
Saint Sava	27 January
Constitution Day	15 February
Good Friday, Orthodox Easter	17 April
Orthodox Easter Monday	20 April
Labor Day	1 May
Victory Day	9 May
Saint Vitus	28 June
Catholic Christmas	25 December

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