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Company Taxation In Serbia

In this article, our Serbian Colleague Associate Ana Dulovic will mention corporate profit tax in Serbia and gives general views about Taxation in Serbia.

Investing Insights: Corporate Profit Tax In Serbia

Taxation is a very important factor in the financial investment decision-making process. Companies must pay a variety of taxes. The taxes must be paid by the companies, which settled in Serbia;

1. Corporate Profit Tax,
2. Value Added Tax (VAT),
3. Withholding Tax (dividends, shares in profits, royalties, interest income and capital gains),
4. Personal Income Tax,
5. Social Insurance Contributions,
6. Annual Income tax
7. Capital income and capital gains and other types of personal income.

When deciding about incorporation and investing in a foreign country, the important thing you have to consider tax rates and regulations, higher the tax rates and more rigorous regulations, bigger your tax bills are going to be.

Introducing Serbia As A Possible Destination For Business Incorporation And Its Corporate Profit Tax Regulations

Corporate profit tax law in the Republic of Serbia is regulated by Corporate Profit Tax Law.

The current corporate profit tax rate is set to 15 %, one of the lowest in Europe. Taxpayers can be granted tax incentives for the purpose of achieving economic policy aims relating to the fostering of economic growth and development of enterprises.

According to Corporate profit tax law legal entities obliged to pay the corporate profit, a tax is legal entities set up in the form of

• General partnership,
• Limited partnership,
• Limited Liability Company and
• Joint-stock company.

The tax period is defined as the financial year and taxpayers are divided into two groups,

1. residents and
2. non-residents.

A resident of the Republic of Serbia is considered to be legal entity founded or having its head office managed or controlled from the territory of the Republic of Serbia. A foreign company is resident if incorporated in Serbia or have real management and control in Serbia. Resident entities are taxed on their worldwide income, generated in the territory of the Republic of Serbia or abroad.

Non-Resident Companies Are Taxed Only On Income Generated In Serbia

The corporate profit tax base is a taxable profit of a company and it is established on the basis of accounting profit seen in company fiscal balance sheet. Corporate profit tax is calculated by the taxpayer. Income statement needs to be prepared in accordance with International Financial Reporting Standards (IFRS) for non-deductible costs and non-taxable revenues.

Serbia doesn’t have a high tax regime which makes it a great place to do business. Contact us to have the guidance of an expert and to be sure that you are following regulations and keeping your taxes to a minimum.