The above thresholds are modified each year in accordance with the annual fluctuation of average salary in Serbia. Also, the above thresholds are higher for individuals who are younger than 40 years of age (that is, two times higher, but only for certain types of income, such as employment income, self-employment income and royalties).
B. Other taxes
Property tax. Residents and nonresidents are subject to property tax at rates that may not exceed the maximum rates set by the Property Law. Each municipality may determine the rates up to these maximum rates. The maximum rates range from 0.4% to 2% on real estate owned in Serbia. The rates depend on the kind of property (land or building), kind of owner (company/entrepreneur or physical person) and, for physical persons, the value of the property. Shares and stakes in legal entities are not subject to property tax.
Inheritance and gift tax. Inheritance and gift tax is levied on the market value of property at rate of 1.5% for taxpayers who are second relations to the testator or donor and 2.5% for taxpayers who are third relations or are not related to the testator or donor. Shares and stakes inherited, or received free of charge, are not subject to inheritance and gift tax.
Transfer tax. The rate of the transfer tax is 2.5%. The tax base is the higher of the contract price or market price. Sales of shares and stakes in legal entities are exempt from transfer tax.
C. Social security and other contributions
Contributions. Social security tax is imposed on salaries received by individual employees. Employers and employees each pay contributions at the rates noted to the following.
Contributions to the Pension and Disability Fund at a rate of 24% and contributions to the Health Care Fund at a rate of 10.3% (for individuals without any other insurance) are payable by individuals on income received under contracts relating to royalties, services, additional work, agency and sports, as well as under similar contracts involving the payment of remuneration for services performed.
For expatriate employees, social security contributions may also be payable on salaries received outside Serbia. Under certain bilateral conventions, expatriates may pay social security contributions in their country of residence only.
Coverage. An employee who pays Serbian social security contributions is entitled to benefits, including health insurance for the employee and dependent family members, disability and professional illness insurance, unemployment allowances, retirement and other benefits.
Totalization agreements. To prevent double taxation and to assure benefit coverage, the Republic of Serbia currently applies social security totalization agreements with the following jurisdictions.
Australia Denmark Panama
Austria France Poland
Azerbaijan Germany Quebec
Belgium Greece Romania
Bosnia and Hungary Russian Federation
Herzegovina Italy Slovak Republic
Bulgaria Libya Slovenia
Canada Luxembourg Sweden
China Mainland Montenegro Switzerland
Croatia Netherlands Tunisia
Cyprus Norway Türkiye
Czech Republic North Macedonia United Kingdom
These agreements generally provide a 12-month exemption, which may be extended. Certain agreements provide an exemption for the full term of the individual’s assignment.
D. Tax filing and payment procedures
The tax year is the calendar year. Annual tax returns must be filed by 15 May of the year following the tax year. The same deadline applies for the payment of annual tax. Withholding tax is levied on most types of income, including salaries. Individuals who are liable for income tax must make advance payments of income tax in monthly or, in certain cases, quarterly installments (subject to a ruling of the tax authorities).
E. Double tax relief and tax treaties
Although Serbia professes to honor the tax treaties concluded by the former Yugoslavia, the applicability of these treaties is in doubt in several instances. In the event of the inapplicability of a treaty, Serbian tax legislation provides for the unilateral avoidance of double taxation through tax credits.
The Republic of Serbia, as the legal successor of the Union of Serbia and Montenegro, applies treaties with countries that were entered into by the former Yugoslavia and the former Union of Serbia and Montenegro. Tax treaties with the following jurisdictions are being applied.
Albania Hong Kong SAR North Macedonia
Armenia Hungary Norway
Austria India Pakistan*
Azerbaijan Iran Poland
Belarus Indonesia Qatar*
Belgium Ireland* Romania
Bosnia and Israel Russian Federation Herzegovina Italy San Marino
Bulgaria Japan Singapore
Canada Kazakhstan Slovak Republic
China Mainland Korea (North) Slovenia
Croatia Korea (South) Spain
Cyprus Kuwait Sri Lanka
Czech Republic
Latvia Sweden
Denmark Libya* Switzerland