Investment Incentives
There is a whole list of attractive incentives that are at your disposal. Feel free to read through them and choose the combination that best suits your company needs.
State Grants
The National Employment Service Grants
Corporate Income Tax Holiday
Corporate Income Tax Credits
Corporate Income Tax Holiday for Concessions
Carrying Forward of Losses
Avoiding Double Taxation
Salary Tax and Social Insurance Charges Exemptions
Annual Income Tax Deductions
Value Added Tax Exemptions in Free Zones
Customs-Free Imports
Local Incentives
FINANCIAL INCENTIVES
State Grants
A new investment package has been prepared for investors into Serbia. State grants are offered for Greenfield and Brownfield projects in all industries, except for primary agriculture, the hospitality industry, retail, and the production of synthetic fibers and coal.
For standard-scale Greenfield and Brownfield projects in the manufacturing, export-related services sector and tourism, non-refundable state funds are offered in the range between €2,000 and €10,000 per new job created within three years.
For large investors, a special financial package is available. If a project's value exceeds €200 million, with the minimum of 1,000 new jobs created within 3 years, the state may cover 20% of the investment. Investments of over €50 million that create the minimum of 300 new jobs within 3 years, can be subsidized up to 20% of the project's value.
More info HERE>>
The National Employment Service Grants
The National Employment Service (NES) grants include:
1. the Employment Subsidies Program,
2. the Apprentice Program, and
3. the Re-Training Program.
For further information on the NES programs, log on to: www.nsz.gov.rs.
TAX INCENTIVES
Corporate Income Tax Holiday
Companies are exempt from Corporate Income Tax for a period of 10 years starting from the first year in which they report taxable profit if they invest in fixed assets an amount exceeding approximately €8 million, and throughout the investment period they employ at least 100 additional employees.
Corporate Income Tax Credits
The amount of tax payable can be reduced by 20% or 80% of the amount invested in fixed assets for the respective tax period. This reduction cannot exceed 50% of the total tax liability for a single year. If not used entirely in the course of one year, this tax credit can be carried forward for a maximum period of 10 years.
Corporate Income Tax Holiday for Concessions
A 5-year tax holiday is granted for concession-related investments, from the day the concession investment has been completed. No tax is due if income is derived before the completion of the concession investment.
Carrying Forward of Losses
The tax loss stated in the tax return can be carried forward and offset against future profits over a period up to 5 years.
Avoiding Double Taxation
If a taxpayer already paid tax on the profit generated abroad, he is entitled to a Corporate Income Tax credit in Serbia to the already paid amount. The same right is enjoyed by a taxpayer who earns revenue and pays Personal Income Tax in another country, provided there is a Double Taxation Treaty with that country.
Salary Tax Social Insurance Charges Exemptions
The employer who hires certain categories of workers on a permanent basis is exempt from paying Salary Tax over the periods of 3 or 2 years.
The employer is exempt from paying social insurance contributions over the periods of 3 or 2 years, depending on the category of workers hired.
Annual Income Tax Deductions
For non-Serbian citizens, 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 below the amount of 6 times average annual salary in Serbia, and 15% for the annual income above the amount of 6 times average annual salary in Serbia. The taxable income is further reduced by 40% of an average annual salary for the taxpayer and by 15% of an average annual salary for each dependent member of the family. The total amount of deductions cannot exceed 50% of the taxable income.
Value Added Tax Exemptions in Free Zones
Income generated through commercial activities in the Free Zones in Serbia is exempted from Value Added Tax. There are six Free Zones, currently operating in the country: Subotica, Novi Sad, Zrenjanin, Sabac, Kragujevac, and Pirot. Three more zones are being prepared in Nis, Smederevo and Uzice. Foreign companies can establish a privately-owned Free Zone based on the project approved by the government.
OTHER INCENTIVES
Customs-Free Imports of Raw Materials and Semi Finished Goods
Foreign investors in Serbia can enjoy the benefit of customs free import of raw material and semi finished goods for export oriented production. This benefit can either be achieved by operating in one of the free zones in Serbia or by a permit from custom office for outward processing production. In both cases finished products must be 100% designated for export.
Customs-Free Imports of Machinery and Equipment
Foreign investors are exempt from paying customs duty on imported equipment and machinery which represents the share of a foreign investor in a capital of a company in Serbia.
Local Incentives
A wide array of incentives is also available at the local level, varying in scope and size from one city to another. The major ones comprise the following:
- City construction land lease fee exemptions or deductions, including the option of paying in installments, with the prior consent of the Serbian Government;
- City construction land development fee relief such as fee exemptions or discounts for one-off payments;
- Other local fees exemptions or deductions (e.g. the fee for displaying the company's name).