Serbia’s Corporate Tax Framework
Basic rule: 15% flat rate
Serbia applies a flat rate of 15% for corporate income tax. Both local and cross-border investors gain predictability thanks to this simple rate.
- Corporate tax (CIT) rate: 15%.
- No corporate tax is applied at the local municipality level; this keeps the tax structure simple.
- The tax year is based on the calendar year (January 1–December 31).
Tax Liability: Residence and Permanent Establishment
Who is taxed where?
Serbia determines tax liability based on the place of establishment and where management/control is exercised. Companies that maintain their headquarters or effective management in Serbia are taxed on their worldwide income.
- Residence: If a company is established in Serbia or if management and control are in Serbia, the company is considered a tax resident.
- Non-resident companies only face taxes on income sourced from Serbia (e.g., permanent establishment, real estate income).
- Permanent establishment (PE) rules determine tax liability in cases of cessation of activities and transfers.
Types of Taxable Income and Exemptions
Income categories and applicable rates
In Serbia, types of income such as commercial profits, capital gains, dividends, interest, and rental income are subject to different rules; knowing these differences provides an advantage in tax planning.
- Profits from commercial activities are subject to corporate tax (15%).
- Capital gains are taxed at 15% for resident companies; in some cases, non-resident capital gains may be subject to 20% or reduced through double taxation treaties.
- Locally sourced dividends are generally exempt; foreign-sourced dividends are taxed but can be offset against foreign taxes under certain conditions.
- Interest, licensing fees, and rental income are taxed as business income.
Declaration, Accounting, and Compliance Requirements
Notification times and record keeping
If you clarify compliance processes, you reduce tax risks. Serbia requires adherence to international standards in accounting and declaration processes.
- The annual corporate tax return is submitted by June 30 of the following year.
- Financial statements are prepared according to IFRS or local accounting rules; proper classification and record-keeping are mandatory.
- Transfer pricing rules are applied in accordance with OECD principles; document related party transactions.
- Record and document retention; keep all supporting documents ready for audit requests.
Operational Options for Foreign Investors
Types of companies, residence permits, and payroll solutions
If you choose the structure correctly, you manage the tax burden and facilitate cross-border operations. A compliant personnel strategy optimizes financial reporting and expense recording.
- Common structures: Limited Liability Company (DOO) and Joint Stock Company (AD). Both structures are open to foreign founders and provide limited liability.
- Foreign founders and managers can apply for work/residence permits; residence permits become critical for strategic roles.
- If you arrange payroll services on local platforms, you can deduct salaries as expenses; specialized service providers like Corpenza assist with payroll and cost structuring.
- Hire staff for short-term projects with the posted worker option; this method simplifies social security and payroll processes.
Practical Steps, Risk Mitigation, and 2025 Updates
Step-by-step roadmap and legislative changes
Legislation clarified some practices in 2025; declaration processes and responsibilities in liquidation, mergers, and acquisitions became clearer. Incorporate these changes into your plan.
- Conduct a benefit analysis before company establishment: compare taxes, tax treaties (DTT), VAT implications, and labor costs.
- If your business model poses PE risk, redesign contracts and operational arrangements.
- Prepare transfer pricing documentation; demonstrate market conditions for related transactions.
- Submit tax returns and accounting reports on time; create a calendar according to the June 30 deadline.
- Establish internal control mechanisms to reduce audit risk and implement a document retention policy.
- Plan semi-annual and annual tax planning for investors; keep track of new legislative items.
If you want to access additional resources and official references, the following official agency pages contain up-to-date legislation and guides:
As Corpenza, my advice is to plan structural decisions along with operational details in Serbia. Address the type of company, payroll structure, and work/residence permits alongside tax planning. This approach provides you with transparent cost management, reduced compliance risk, and growth-oriented operational flexibility.
As a next step, if company establishment, residence permit applications, payroll and posted worker solutions, or investment citizenship planning are needed, we can prepare practical checklists and local compliance guides. Plan to seek professional tax and legal consultancy; local regulations vary according to project scale.
