Overhead Costs
Extremely competitive environment provides second lowest corporate income tax in Europe, together with other favorable taxes and costs.
Corporate Taxes
Value Added Tax
Corporate Income Tax
Withholding Tax
Personal Income Tax
Annual Income Tax
Social Insurance Contributions
Labor Costs
Utility Fees
Corporate Taxes
Serbia's tax regime is highly conducive to doing business. Corporate income tax is the second lowest in Europe, while Value Added Tax is among the most competitive in Central and Eastern Europe.
Value Added Tax
The VAT rates are as follows:
- The standard VAT rate - 18% (for most taxable supplies);
- The lower VAT rate - 8% (for basic food stuffs, daily newspapers, utilities, etc.).
Corporate Income Tax
Corporate income tax is paid at the uniform rate of 10%. Non-residents are taxed only based on their income generated in Serbia.
Witholding Tax
Withholding tax is not applied to dividend payments between Serbian entities. For non-residents of Serbia, a 20% withholding tax is calculated and paid on certain payments such as dividends, shares in profit, royalties, interest, capital gains, lease payments for real estate and other assets.
Personal Income Tax
The personal income tax rate is 12% for salaries.
Annual Income Tax
The annual income is taxed if exceeding the amount of threefold the average annual salary in Serbia. The tax rate is 10% for the annual income amounted in the range between 3 and 6 times average annual salary in Serbia, and 15% for the part of the annual income exceeding 6 times average annual salary in Serbia.
Social Insurance Contributions
The rates for mandatory social security contributions are:
- 11% for pension and disability insurance,
- 6.15% for health insurance, and
- 0.75% for unemployment insurance.
Labor Costs
Average salaries in Serbia are low enough to ensure cost-effective operating. Total costs for employers stand at merely 50% of the level in EU countries from Eastern Europe. Social insurance charges and Salary Tax amount to roughly 65% of the net salary but the tax burden for employers can be reduced through a variety of financial and tax incentives available.
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UTILITY FEES
Electricity
The 100% state-owned Electric Power Industry of Serbia is the sole electricity supplier at the moment. The electricity price varies according to the consumption category and daily tariff rate, ranging between €0.0112 and €0.0487/kWh.
Gas
As a natural gas supplier in Serbia, the state-owned company Srbijagas pursues its pricing policy in accordance with world prices of oil derivatives and the US dollar exchange rate fluctuations. The price of natural gas is set every 15 days, currently standing at €0.3057/m3.
Water
The waterworks in Serbia are operated at the municipality level with water prices set by local authorities.
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