Comparison of Accounting Legislation in Serbia and the Baltic Countries

The modern business world presents multiple challenges for companies aiming for international growth: different accounting standards, rapidly changing regulations, digital reporting expectations, and compliance costs. These challenges directly affect investment decisions, operational planning, and tax strategies. In the following six sections, I will compare the accounting legislation of Serbia with the Baltic countries, including Estonia, Latvia, and Lithuania; in each section, you will find applicable recommendations and insights beneficial to your business.

1. Regulatory Framework and Competent Authorities

National regulatory structure

Serbia updates its accounting regulations through central authorities and the relevant ministry. The Baltic countries, due to EU membership, utilize a legal infrastructure that is closely aligned with European Union directives.

Benefits:

• The Baltics offer a more predictable environment for investors seeking full compliance with EU legislation.
• As Serbia is in the process of aligning with EU standards, it presents an opportunity for compliance; this is advantageous for companies with a regional expansion strategy.

2. Accounting Standards Used

IFRS and national practices

The Baltic countries apply IFRS for consolidated financials and align national standards with IFRS. Serbia, on the other hand, emphasizes the application of IFRS for many companies; however, there can be differences in the scope of application and technical details.

Applicable insights:

• To enhance the international comparability of financial statements, multinational groups should prefer IFRS in their consolidated reports.
• Companies operating in Serbia should standardize their reporting processes by identifying local application differences in advance.

3. Facilities Provided for SMEs & Micro Enterprises

Simplified reporting regimes

The Baltic countries offer comprehensive simplifications for micro and small enterprises; this reduces the business burden and lowers compliance costs. Although simplifications exist in Serbia, practical applications may be more limited.

What you should do:

• If you are an SME, analyze what tax and reporting simplifications are available in the country where you will operate.
• Organize your company registration plan to maximize benefits from local simplifications; structure your accounting system according to these needs.

4. Digitalization, e-Invoicing, and Electronic Reporting

Technology and regulatory expectations

The Baltic countries are leading in digital reporting and e-invoicing applications; electronic data sharing and regulatory portal integration are at a high level. Serbia is accelerating digital processes; it is expanding e-invoicing and electronic record applications.

Operational advantages:

• Being compliant with digital reporting systems increases data accuracy and shortens audit processes.
• By managing payroll, invoicing, and tax reporting on a centralized platform with appropriate integration, you can achieve cost savings.

5. Tax Compliance, Investment, and Workforce Effects

Investor perspective and employee management

Accounting legislation directly affects tax compliance and investment attractiveness. The Baltics attract foreign capital with clear tax administration and predictable financial reporting. Serbia, while offering competitive cost advantages, requires you to closely monitor changes in regulatory compliance.

In terms of personnel and payroll management:

• Correctly structure the representation of internationally employed personnel as expenses, payroll, and posted worker applications.
• Efficiently report the salaries of contracted and remote workers in cost planning to achieve tax optimization.

6. Implementation Recommendations and Strategic Insights

Practical steps and risk management

Regulatory differences affect your operations; therefore, establish compliance governance in target markets. Immediately implement the following steps:

• Set up a regular update tracking system for local accounting and tax legislation.
• Align reporting standards with a centralized policy; design consolidation processes early.
• Invest in digital invoicing and e-reporting solutions to ensure transparency during audits.
• Optimize recruitment and payroll processes according to local regulations; comply with posted worker and temporary employment rules.

Recent developments in the sector:

• The EU is taking steps to enhance financial reporting transparency; you can see its impact as a broad application in the Baltic countries. For more information, you can visit the EU Directive 2013/34/EU page.
• The IFRS Foundation is working to make financial reporting standards suitable for digitalization; monitoring these developments is beneficial for multinational groups. For up-to-date resources, check the IFRS Foundation site.
• Remote work and posted worker regulations are reshaping businesses’ payroll and social security strategies; proactive regulatory compliance in this area reduces risk.

In conclusion, the prominent differences in accounting legislation between the Baltic countries and Serbia focus on predictability, compliance levels, and SME-friendly practices. The most effective approach for companies operating in multiple countries is to align local legislation with centralized group policies, strengthen digital reporting infrastructure, and integrate payroll/taxation processes in the early stages of operational planning.

As Corpenza, we provide regulatory comparisons, local compliance guidance, and implementation plans for entrepreneurs and investors with international expansion plans. If needed, we can prepare a detailed action plan focused on the target country.