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Company Formation Serbia



Double Tax Treaties in Serbia

Updated on Friday 15th December 2017

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Double tax treaties in Serbia.jpgEven if Serbia has only a few double taxation agreements signed with countries worldwide, this represents a major step in developing the business relations on an international scale. It is mandatory to be aware of how the double taxation can be avoided when opening a company in Serbia as a foreign entrepreneur. The company registration in Serbia is subject to less bureaucracy, and it can be guided by our Serbian team of specialists in company incorporation.


Countries which signed DTT with Serbia

A number of 60 states have signed double tax treaties with Serbia, and here we mention the following: Armenia, Albania, Azerbaijan, Austria, Belarus, Bosnia and Herzegovina, Belgium, Bulgaria, Croatia, China, Czech Republic, Canada, Cyprus, Denmark, Estonia, Egypt, France, Finland, Greece, Germany, Georgia, Hungary, Iran, Italy, Ireland, India, Kazakhstan, Kuwait, Libya, Latvia, Luxembourg, Lithuania, Malaysia, Macedonia, Moldova, Morocco, Malta, Montenegro, Norway, the Netherlands, North Korea, Poland, Pakistan, Qatar, Russia, Romania, Slovenia, Slovakia, South Korea, Sri Lanka, Sweden, Spain, Switzerland, Tunisia, Turkey, Ukraine, the UAE, UK, Uganda, and Vietnam.

Tax provisions mentioned in the double tax treaties of Serbia

When registering a company in Serbia, one should consider if a tax treaty has been signed and how the double taxation can be avoided. In this matter, the entrepreneurs must know that there are two important ways of enjoying the benefits of a DTT. The first one is the credit offered after the revenues are levied in Serbia. The second one is related to the exemption of taxation meaning that the profits of a company are only taxed in the home country and not in the country where the activities are performed, in this case, Serbia.


The withholding taxes for member states in the DTT


Usually, the double tax treaties prevent the taxation of the incomes of a foreign company in the country of origin or in the country where it performs the business. The avoidance is made trough exemption (when there is no tax paid in Serbia) or through credit (when the paid tax is deducted in the foreign country). The double tax agreements between Serbia and the above-mentioned participant countries mention smaller withholding taxes imposed on royalties, dividends, and interests, but there are situations in which such taxes are non-existent, being influenced by the amount of participation in the Serbian enterprises or subsidiaries.
Company owners in Serbia are obliged to demonstrate to the authorities that the taxes have been paid in the home country, especially if they own at least 25% of the shares in a business with origins from Malta, Austria, Libya, Ireland, Qatar, Estonia, or Spain. In such cases, the dividends are taxed at a 5% rate. As for countries like Egypt and Belgium, the withholding tax is set at 10%. Belarus is subject to a withholding tax of 8%, but there are also exemptions for states like Germany, Sweden, Finland, the Netherlands, and France. The countries which are part of the double taxation agreements with Serbia are subject to taxes of royalties not exceeding 10%.

What are the returns of double tax treaties signed with Serbia?

Entrepreneurs from abroad who want to expand their portfolios by incorporating companies in Serbia should know that there are varied benefits stipulated by the double taxation agreements. For instance, the companies are subject to low rates of withholding taxes on royalties, interests, and dividends, with rates between 0% and 10%. Furthermore, the capital gains of a company with foreign capital established in Serbia shall not be levied in the home country, if certain conditions are respected. 

Supplementary details about the taxes in Serbia

Foreign citizens who work in Serbia are also protected by the double tax treaties signed with states mentioned earlier, meaning that the revenues gained in Serbia will only be taxed in this country. In general, the gains derived from the sale of real estate are taxed, but also the gains derived from the sale of shares with a majority of value derived from the real estate located in the country of origin.
If you need more information about the avoidance of double taxation in Serbia, you may contact our team of agents in company formation in Serbia.



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