Fiscal & tax system

VALUE ADDED TAX

VAT rates are as follows:

  • regular VAT rate: 20% for most of the taxable transactions
  • reduced VAT rate: 10% of food, basic necessities, services

COMPANY INCOME TAX RATE

The tax regime in Serbia is very favorable to do business. The tax on corporate income is the lowest in Eastern Europe and in Central Europe.

Company income tax rate is fixed at 15%. Non-resident persons in Serbia pay taxes only on income generated in Serbia. Serbian companies controlled by Italian companies do not include the regime of C.f.c. since the effective taxation is higher than the minimum provided for by art. 167 paragraph 8 bis of the Consolidated Income Tax.

PERSONAL INCOME TAX

The nominal tax rate on personal income is 10%.

More precisely, the annual personal income is taxed if exceeding the amount of 3 times the average annual salary in Serbia. The tax rate is 10% for the annual income of up to 6 times the average annual salary in Serbia, and 15% for the portion of annual income above 6 times the average annual salary in Serbia.

TAXES AND FEES

The rates for mandatory social contributions are:

  • 14% for pension and disability insurance
  • 5.15% for health insurance
  • 0.75% for the unemployment benefits

REDUCTION OF TAXES AND CONTRIBUTIONS

Creating new jobs, as of 1 July 2014, is facilitated by a significant reduction of taxes and contributions paid out of net salaries since the beginning of the employment relationship and up to 31 December 2017.

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

PUBLIC SERVICES COSTS

Electricity

The sole distributor of electricity in Serbia is that EPS is 100% state-owned.

The price of electricity varies according to the consumer category and the daily rate, which varies between € 0.0112 and 0.0487 / kWh.

Natural gas

As a supplier of natural gas in Serbia, the state-owned company Srbijagas pursues its pricing policy on the basis of world prices of oil derivatives and the fluctuations of the US dollar exchange rate.

The price of natural gas is set every 15 days, and currently stands at € 0.3057 / m3.

Water

Waterworks in Serbia are operated at the municipal level, with water prices set by local authorities.