Non-resident in Serbia is subject to taxes on profit, for the profit made during business operations via permanent business unit located on the territory of the Republic of Serbia.Individuals will be regarded as tax residents:
- if they stay permanently in Serbia,
- if they have their habitual place of abode in Serbia, i.e. if they stay in the country for at least 183 days in a 12 month period that begins or ends in the relevant tax year, or
- if their centre of vital interests is located in Serbia.
Corporate profit tax rate in Serbia is among the lowest in Europe and it is set at 10%. Revenues made by the non resident from the resident tax payer, the withholding tax, is calculated and paid at the rate of 20% on various forms of income (dividends, shares in profits, royalties, interest income, capital gains, lease payments for real estate and other assets) by a non–resident. It is not calculated and is not paid if the realized revenue is continuously paid to the permanent business unit of the non-resident taxpayer.
A foreign investor and a company with a foreign investment enjoy tax and customs benefits in compliance with the law.
Value added tax (Serbian: PDV)
VAT was enacted on 1 January 2005. The taxable base is the fee for products and services sold, including customs duties, excise taxes paid, The taxable base is the fee for products and services sold, including customs duties, excise taxes paid, transportation and insurance costs or any other cost relating to the sale of goods and services.
- Standard rate of Value added tax (VAT) in Serbia is 18%
- Standard rate 18%: Taxable supplies of goods and services, which are not subject to a reduced rate
- Reduced rate 8%: Agricultural goods, certain kinds of food, fruits, vegetables, text books and teaching aids, medications, personal computers, daily newspapers, firewood, accommodation services in hotels, motels etc.
Exemption with the right of previous tax rebate – goods exportation; entry of goods to the free zone, trade in goods and services destined for diplomatic and consular representations and international organizations; international passenger air and inland waterway transport; trade in goods and services in compliance with donation agreements with RS; trade in goods and services based on loan contracts between RS and international financial organization, or state.