Corporate income tax in Serbia – 2025 overview

Serbia maintains a competitive corporate tax environment in 2025, featuring a flat 15% corporate income tax (CIT) rate, with recent legislative updates enhancing clarity and compliance.

Key Highlights for 2025

1. Corporate Income Tax Rate

A uniform 15% CIT rate applies to both resident and non-resident companies.
Non-resident entities are taxed solely on income generated through a permanent establishment (PE) in Serbia.

2. Tax Residency Criteria

A company is deemed a tax resident if it is incorporated in Serbia or if its management and control are exercised within the country.

3. Taxable Income Components

Taxable income encompasses:
- Profits from regular business activities.
- Capital gains from asset disposals.
- Dividends, interest, and royalties.
- Other income streams, including rents and property-related earnings.

4. Capital Gains Taxation

Capital gains are taxed at 15% for residents.
Non-residents face a 20% tax on capital gains, unless a double taxation treaty (DTT) stipulates otherwise.
Capital losses can offset capital gains within the same tax year and may be carried forward for up to five years.

5. Dividend Income Treatment

Dividends received from resident companies are exempt from CIT.
Dividends from non-resident companies are taxable, with potential foreign tax credits available, especially if the Serbian company holds at least 10% of the foreign entity’s shares.

6. Recent Legislative Amendments (Effective January 1, 2025)

Clarifications on tax return submissions during liquidation or bankruptcy.
Defined responsibilities for filing CIT returns in cases of status changes, such as mergers or demergers.
Introduction of solidary liability for company members receiving assets from a liquidated entity.

Filing and Compliance

Tax Year: Aligns with the calendar year.
Filing Deadline: Annual CIT returns must be submitted by June 30 of the following year.
Accounting Standards: Financial statements should comply with International Financial Reporting Standards (IFRS) or local accounting regulations.

Conclusion

Serbia’s corporate tax framework in 2025 offers a stable and investor-friendly environment, with a flat tax rate and clear regulations. Businesses operating or planning to invest in Serbia should stay informed about the latest tax laws and consider consulting with tax professionals to ensure compliance and optimize tax liabilities.

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