Serbia Double Taxation Avoidance Agreements

Serbia Double Taxation Avoidance Agreements

Updated on Tuesday 15th November 2022

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Double tax treaties in Serbia.jpgJust like in the case of other jurisdictions with an advantageous tax system, Serbia hasn’t signed many double tax treaties so far. When opening a company in Serbia as a foreigner, it is suggested to understand the taxation system regarding the double tax treaties signed by Serbia.
In this matter and in any other legal related issues, our Serbian lawyers can offer support and information. We also remind that the Serbian fiscal system states that the profits are taxed at only 10% and the withholding taxes on dividends, interests, and royalties are 20%. All the above can be exempt, credited or minimized by the double tax treaties provisions. 

The countries which signed double tax treaties with Serbia

Serbia signed double taxation agreements with 65 states: Albania, Austria, Armenia, Azerbaijan, Belgium, Belarus, Bosnia and Herzegovina, Bulgaria, China, Croatia, Canada, Cyprus, Czech Republic, South Korea, Denmark, Egypt, Estonia, Finland, France, Germany, Greece, Guinea, Ghana, Georgia, Hungary, Italy, Indonesia, Iran, India, Ireland, Kuwait, Kazakhstan, Latvia, Libya, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Moldova, Montenegro, Morocco, the Netherlands, Norway, North Korea, Pakistan, Palestine, Poland, Qatar, Romania, Russia, Slovakia, Slovenia, Sri Lanka, Spain, Sweden, Switzerland, South Korea, Turkey, Tunisia, Ukraine, the UAE, United Kingdom, Vietnam and Zimbabwe.

Who can benefit from the double tax treaties in Serbia?

The double taxation agreements signed by Serbia with the above-mentioned countries are meant to help foreign investors from this state avoid paying the taxes on incomes twice. Besides legal support at the time of business registration, our Serbian attorneys can help entrepreneurs in tax matters, including for double tax treaties.

What are the general provisions of Serbia’s DTTs?

As a brief review of the double taxation treaties signed by Serbia, we mention that the taxes imposed on all incomes of a foreign firm, on the gains from the alienation of movable and immovable possessions and on capital appreciation shall be paid only once, in the country where these incomes are registered.

How can you avoid paying taxes twice in Serbia?

Entrepreneurs who want to know more details about how to avoid the double taxation on profits need to understand that there are two methods of taking advantage of the provisions linked to the revenues, such as:
  • credit, when the profits are taxed in Serbia, but a credit on that amount is granted;
  • through exemption, when the profits are not taxed at all in Serbia, but only in the country of origin.
Smaller withholding taxes on dividends, interests, and royalties or even an exemption from paying these taxes are available for the companies with foreign capital, depending on the degree of participation in the Serbian company or in the subsidiaries from the signatory states. The smaller withholding taxes apply if the foreign investor owns a part of the company’s capital for a long period of time. The investors must deliver to the Serbian tax authorities a proof that the taxes are paid in the country of origin or a proof that the company owns a majority of shares for a long period of time in the entity which requests the smaller taxes or exemption from these. 
If the treaties are elaborated under the OECD model, the tax information exchange between the countries is a mandatory requirement. Due to it, the foreign authorities have the right to ask for information related to the entities which request the exemptions to the foreign partner countries.
If Serbia is on your relocation list, we recommend specialized help from our lawyers. They can take care of the legal formalities related to how to immigrate to Serbia, and among them, obtaining the necessary visa, residence permit, and work permit. Thus, you will have the guarantee of a simple and fast process, without complexities, so that you can focus on the relocation itself.

The advantages of DTTs signed by Serbia

The double tax conventions signed by Serbia provide several advantages for foreign companies established in this country. The one that needs to be mentioned refers to withholding taxes on dividends, royalties, and interests at low rates, such as:
  • a withholding tax on dividends of 5% is established for Serbian companies where the foreign investor owns 25% of the capital, if he or she is from Spain, Malta, Greece, or Ireland. 
  • local companies are subject to a withholding tax on dividends, royalties, and interests of 20%. 
  • for countries like Germany, Sweden, Finland, France, Norway and the Netherlands, the withholding tax is not imposed. 
  • another benefit which needs to be taken in attention by foreign investors is that the countries that signed double tax treaties with Serbia are subject to taxes on royalties with rates between 0% and 10%.


Other things you need to consider about taxes in Serbia

The tax structure in Serbia has several benefits for foreigner willing to enlarge their operation in this country. For instance, there is no payroll tax, no branch remittance tax, and no capital duty. The transfer tax is set at a 2.5% rate and it is applicable for the allocation of intellectual property and real property in Serbia.
If you need more information about the avoidance of double taxation, you may contact our lawyers in Serbia.