Dividend Tax in Serbia

Dividend Tax in Serbia

Updated on Tuesday 30th July 2019

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Dividend-Tax-in-Serbia.jpgSerbia is among the preferred countries for business by international investors who want to benefit from an appealing tax system, a stable and thriving economy and varied business opportunities. In Serbia, the incomes derived from dividends are levied with a withholding tax at a rate of 20%. Comprehensive information about how you can open a company in Serbia and about the taxes imposed on businesses established in Serbia can be offered by our team lawyers in Serbia.

The withholding tax on dividends in Serbia

The withholding tax in Serbia is imposed on dividends, intellectual property rights royalties and capital gains at it is established at a fixed rate of 20%. As stipulated by the law, the dividends are paid to non-residents once the withholding tax of 20% is applied. A reduced tax is applicable under the rules of double taxation treaties signed by Serbia. Also, a withholding tax of 25% rate is imposed for payments in jurisdictions with preferential tax regimes in Serbia. This kind of tax is also imposed for interests and royalties registered in Serbia. Any information about the taxation of dividends in Serbia can be provided by our team of attorneys in Serbia. You can also ask for the services of our local accountants in Serbia and receive more details about the tax structure in this country.

What’s new about the tax structure in Serbia in 2019?

The tax regime in Serbia comes with a series of changes for 2019, so the following aspects should be in your attention if you own a business or want to make investments in this country:
1. Taxpayers who make equity investments in a newly registered company having operations in the innovation field are subject to a tax credit of 30% rate.
2. The advertising and marketing costs are subject to taxation starting with 2019 (no more than 10%).
3. The corporate income tax can be reduced if a taxpayer paid the capital gains tax from the sale of a property in the country of origin.
4. The tax depreciation is calculated based on a straight line for non-current assets.
If the business climate continues to change and improve, the same thing is available for the taxation system, so it is wise to pay attention to all variations and align with the new rules. You may address your questions to one of our lawyers in Serbia and find out more about the taxes you need to pay and also about how you can start a business in Serbia.

Short facts about dividends in Serbia

The distribution of profits in a company is made with the help of dividends and the payments made to the shareholders of a firm. The dividend payments are normally made in cash or through a dividend reinvestment plan, if the owners of the company decide on these kinds of expenditures. It is important to know that the dividend payments are made only after taxation, whether the income tax or withholding tax. In case of Serbia, the withholding tax of 20% rate is applicable to dividends.

What is the VAT rate in Serbia?

Just like the dividend tax, the VAT is also important when having a business in Serbia. This kind of tax is applicable to a series of products and services meant for sale purposes. The standard VAT rate in Serbia is set at 20% for most of goods and services, however, a low rate of 10% is the VAT imposed for accommodation and hotel services, fruits and vegetables, cereals, etc. As for the VAT exemption in Serbia, this tax does not apply to financial and medical services, the export of goods, education, entertainment, international air transport. Feel free to ask our Serbian team of lawyers about the VAT rates and about other taxes you need to pay in Serbia.

Investments in Serbia

Serbia’s free zones and industrial parks are beneficial from a taxation point of view and that because there is no VAT imposed on the import and export products. There are numerous large companies from overseas that have branches and subsidiaries in Serbia and benefit from low formation and labor costs. Here are some facts about the investments and the business direction in Serbia:
  • an average of EUR 232 million in FDIs have been registered in Serbia between 1997 and 2019;
  • there were more than 85,000 companies registered in Serbia in 2018 that benefit from low dividend tax compared to other countries;
  • the GDP for 2019 in Serbia is expected to exceed $ 129,000 billion;
  • Belgrade is the largest city in Serbia, with around 1,200,000 inhabitants, and top business destination for foreign investors.
Looking for more details about the taxation on dividends in Serbia? We kindly invite you to get in touch with our law firm in Serbia and find out more details in this matter. You can also ask for support for starting a business in Serbia.