Personal Income Taxation in Serbia
Serbia follows a worldwide principle of taxation for its residents. This implies that their aggregate income is used in order to calculate personal income taxation. This includes both, income sourced from within Serbia, as well as income sourced outside Serbia. On the contrary, non-residents are only supposed to pay taxes on income that has been sourced from within Serbia only. Income sourced outside Serbia is not used to calculate Personal Income Taxation.
Personal Income Tax Rates in Serbia
A flat tax system is levied in Serbia, under which individuals are taxed at flat rate between 10% and 20%. The applicable rate primarily depends on the type of income and where it was essentially sourced from.
Supplementary Annual Taxation
Annual Taxation is levied across all residents in Serbia. Under this particular regime, residents are subject to pay supplementary annual taxation on their worldwide income, whereas non-residents are supposed to pay tax on their Serbian-sourced income only.
For this particular taxation, progressive rates are levied. In accordance to the thresholds present, the tax levy is either 10% or 15%.
Corporate Income Taxation in Serbia
Resident business entities in Serbia are taxed on the income sourced within Serbia, as well as income sourced outside Serbia. On the other hand, non-resident business entities are supposed to pay Personal Income Tax on income that has been sourced from within Serbia only.
Corporate Income Tax Rates in Serbia
The applicable corporate income tax rate in Serbia is 15%.
Other Taxation in Serbia
- Value Added Tax (VAT): VAT is levied as a consumption tax across most taxable goods and services. It is levied at a rate of 20%. However, a reduced rate is levied, at 10%, for essential items, including food supplies, public transportation, as well as medicines. There are some zero-rated goods and services too, that include exported goods and services, as well as other services mostly related to exports, as well as other international air transport.
- Custom Duties: Custom Duties are levied on almost all goods and services that are imported in Serbia. The custom duty levy ranges from 0% to 57.6%. However, most goods are levied custom duties below 30% only.
- Excise Duties: Excise Duties are levied across goods and services with negative externalities. The levy varies across different product categories. Examples of goods on which excise duties are levied include oil derivatives, tobacco and related products, as well as alcoholic beverages.
- Property Tax: Property tax is levied in Serbia on an annual basis. It is levied on business that own real estate with ownership rights, or right of occupancy. However, in cases where accounting records have properly been maintained, the property tax levy does not exceed more than 0.40%.
- Transfer Tax: Transfer Tax is levied in cases that involve transfer of rights over real estate. In this case, contract price is used as a tax base. In most cases, transfer tax is levied at a rate of 2.5%.
- Stamp Taxes: There are no stamp taxes levied in Serbia.
- Capital Gains Tax (for non-residents): Capital Gains that are realized by non-residents are subject to a 20% levy in the form of capital gain tax.
- Payroll Taxes: Payroll Taxes and Social Security Contributions are withheld at source by the employer, at the following rates:
- 10% is levied as Personal Income Tax
- 9% is levied as employee’s contribution towards the social security fund
- 65% is levied as social contributions that are payable by the employee