Taxation in Serbia. What taxes do I have to pay in Serbia?

Serbia's tax system and applicable tax rates.

There are several types of taxes in Serbia, which include:

1. Tax on personal income (income tax):

Individuals earning income in Serbia are obliged to pay income tax. This includes income from employment, business activities, rental of real estate and other types of income. Tax rates may vary depending on the amount of income and other factors.

Progressive tax scale, starting at 10% and increasing according to income level.

2. Corporate tax (corporate income tax):

Legal entities operating in Serbia are obliged to pay income tax.

The standard corporate income tax rate is usually fixed, calculated on the firm's net income and is around 15%.

3. Value added tax (VAT):

VAT applies to most goods and services sold or consumed in Serbia. Depending on the type of goods or services, there are standard and reduced rates.

• The standard VAT rate is 20%.
• A reduced VAT rate of about 10% applies to basic foodstuffs, medicines, books, educational materials, medical services and public transportation.

4. Property Taxes:

Property owners in Serbia are obliged to pay property tax, which is calculated based on the value of the property.

The tax rate ranges from 0.40% to 2.00% of the assessed value of the property.

5. Excise Taxes:

Established on alcohol, tobacco products, fuel and other categories of goods.

6. Social contributions:

Employers and employees are obliged to pay social contributions in Serbia.

The general rate of social contributions for employers and employees is approximately 35-40% of wages, including contributions to the pension, health and social insurance funds.

Advantages of the Serbian tax system over the European one.

Serbia's tax system offers a number of advantages over the tax systems of some European Union countries, which may be attractive to businesses and individuals:

1. Lower corporate tax rates:

Serbia offers one of the lowest corporate tax rates in Europe, around 15%, which is quite competitive compared to many EU countries where rates can range from 20% to 30% or higher. This makes it attractive to international investors and entrepreneurs.

2. Attractive conditions for investment:

Low tax rates and incentive tax breaks for investment projects, especially in high-tech and export-oriented industries. (e.g., state subsidies)

3. Low income tax rates:

Serbia applies a progressive taxation scale starting from 10%. The progressive scale is also widespread in the EU, but the rates can be higher, especially in countries with a high level of social guarantees, e.g. in France and Germany - personal income tax ranges from 14% to 45%, in Spain - from 19% to 45%, in Italy - from 23% to 43%, in the Netherlands - from 37.10% to 49.50% depending on the amount of income.

4. Reduced VAT rates on certain goods and services:

A reduced VAT rate of 10% on basic foodstuffs, medicines, books and educational materials, which is lower than in some EU countries. In EU countries, standard VAT rates usually range between 19-25%.

5. Simplicity and transparency of the tax system:

Perhaps a simpler and clearer tax system compared to some EU countries, making it easier to do business.

6. Tax incentives for new investments:

Possible tax incentives for new investments, especially in certain economic zones and for certain types of investments (e.g. tax vacations).

7. Agreements on avoidance of double taxation:

Serbia has concluded over 60 international double taxation treaties, which facilitates cross-border transactions.

8. Absence of certain types of taxes in the Serbian tax system:

• tax on financial transactions (tax on the purchase of shares of large companies), for example, in France - about 0.3% of the purchase price of shares
• tax on large inherited fortunes
• wealth (or asset) tax in Switzerland Wealth tax rates can range from 0.13% to 1%
• luxury tax (tax on expensive cars and yachts) Such a tax exists in Italy, Spain, and France
• green tax

These advantages make Serbia attractive to businesses and individual investors looking for alternative opportunities in Europe.