Tax residents in Serbia are liable to pay Serbian tax on their worldwide income. Non tax residents in Serbia are liable to pay tax on their Serbian-source income only.
Individuals will be regarded as tax residents:
- if they stay permanently in Serbia,
- if they have their habitual place of abode in Serbia, i.e. if they stay in the country for at least 183 days in a 12 month period that begins or ends in the relevant tax year, or
- if their centre of vital interests is located in Serbia.
Married persons are taxed separately and there is no group taxation of a family unit.
Taxable income includes:
- employment income,
- capital gains,
- income from agriculture and forestry,
- business and professional income,
- income from royalties,
- income from immovable property.
Certain deductions are permissible for 2009 including:
- social security contributions,
- a basic personal allowance of RSD 219235,
- for each dependent family member RSD 82213,
- an additional allowance of 15% of the country average annual salary for each dependent; the total of the allowances may not exceed 50% of the taxable income.
Income tax rates for 2009:
- 10.00% for Serbian citizens if the taxable income exceeds the non taxable amount and up to the limit of RSD 3288528,
- 15.00% on income exceeding RSD 3288528,
- 10.00% for resident expatriates and Serbian resident nationals assigned abroad, on income which exceeds the non taxable amount up to the limit of RSD 4384704,
- 15.00% on income exceeding RSD 4384704.
The employer withholds tax at source on the salary increased by the employers social security contributions which is paid directly by the employer on behalf of their employees.
Resident-foreign taxpayers whose total net income exceeds RSD 2740440 must submit an annual tax return by 15 March in the following year. The tax authorities must issue a final assessment within 30 days of the filing date.
Non-resident taxpayers must file an advance tax return. The advance tax payments are considered as final for non-residents.
Social security contributions
Non-residents working in Serbia are required to pay social security contributions on their gross salary in Serbia or in the country of their employer if a social security agreement exists between the two countries and the employer obtains a detachment certificate.
Social security rates for 2009:
- 11.00% for employers and employees each for pension and disability insurance,
- 6.15% for employers and employees each for health insurance,
- 0.75% for employers and employees each for unemployment insurance.
The minimum base for social security contributions is 35% of the average monthly salary in Serbia. The maximum base is 5 times the average monthly salary. In December 2008, the average monthly salary for social security contributions was RSD 38626.00
New law on temporary exemption from personal income tax of certain types of individual income:
This law came into force on 30 January 2009. Interest income from deposits in foreign currency is temporarily exempt from taxation until December 31, 2009 (previously, such income was taxed at a rate of 20 percent). This exemption applies to all interest income accrued by the bank to individuals from 30 January 2009 until 31 December 2009, and it is not related to the moment when the deposit was made.
Capital gains generated from the sale of securities and stakes in limited liability companies are temporarily exempt from tax until 31 December 2009 (previously, such gains were taxed at a rate of 20 percent).
Furthermore, income from agriculture and forestry generated in 2008 and 2009 is exempt from tax.