Even 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 65 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, Guinea, Ghana, Georgia, Hungary, Iran, Italy, Ireland, India, Indonesia, Kazakhstan, Kuwait, Libya, Latvia, Luxembourg, Lithuania, Malaysia, Macedonia, Moldova, Morocco, Malta, Montenegro, Norway, the Netherlands, North Korea, Poland, Pakistan, Palestine, Qatar, Russia, Romania, Slovenia, Slovakia, South Korea, Sri Lanka, Sweden, Spain, Switzerland, Tunisia, Turkey, Ukraine, the UAE, UK, Uganda, Zimbabwe, 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
Do I need to make proof of the taxes paid in other countries?
Yes, 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 on 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.
What is a permanent establishment?
A permanent establishment is a fixed place of your business in Serbia which can be a workshop, an office, a factory or a branch that has operations in this country. Such permanent establishments are mentioned by the double taxation agreements signed by Serbia and the countries mentioned above.
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. The following withholding tax rates apply as mentioned:
• a 10% rate applies for the right to use the trademarks, for the use of scientific or commercial equipment of companies with origins from the contracting states;
• a 10% rate applies on dividends of Malaysian residents;
• there is no withholding tax applicable on dividends for UAE tax residents;
• if Switzerland imposes no withholding taxes on royalties, dividends, and interests, then Serbia won’t apply such tax, in accordance with the signed treaty.
We also mention that for taking advantage from the provisions of the double taxation conventions signed by Serbia, and particularly from the withholding tax rates, the resident taxpayer needs to provide to the authorities the residence certificate translated into the Serbian language.
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