Serbia's Tax System and Regulatory Framework in 2025

Serbia has established a modern, transparent tax regime centered on income tax and value-added tax (VAT), with a unified national system encompassing eight primary taxes. Under Serbian law, the statute of limitations for tax assessments, collections, and refunds is 10 years. However, in cases involving tax evasion or fraud, authorities retain the right to pursue claims indefinitely, ensuring strict compliance and accountability.

Key Taxes and Applicable Rates in Serbia

1. Personal Income Tax: A flat rate of 10% applies to most individual earnings. However, specific categories are taxed at higher rates:
   • Income from stocks, securities, and savings interest: 15%
   • Rental income from real estate: 20%
   • High-income earners may face a progressive surcharge, bringing effective rates to between 10% and 15%.
     Resident individuals are taxed on worldwide income, while non-residents are liable only for income earned within Serbia.
2. Value-Added Tax (VAT): The standard VAT rate is 20%. Reduced rates apply to essential goods and services:
   • A 10% rate covers agricultural products, basic foodstuffs, pharmaceuticals, children’s clothing, and footwear.
3. Corporate Income Tax: Companies operating in Serbia are subject to a competitive 15% corporate tax rate, one of the lowest in Central and Eastern Europe.
4. Withholding Tax on Corporate Distributions: Dividends and similar payments are taxed at 20%, though this may be reduced under applicable double taxation treaties.
5. Social Security Contributions: Total contributions amount to 40.5% of gross payroll, shared equally between employer and employee (20.25% each). This includes:
   • Pension insurance: 14%
   • Health insurance: 5.5%
   • Unemployment insurance: 0.75%
6. Property Tax: Serbia employs a progressive property tax structure based on asset value:

   Property Value (RSD)	Equivalent (EUR)	Tax Rate
   Up to 10 million	~85,500	0.4%
   10–25 million	~85,500–214,000	0.6%
   25–50 million	~214,000–428,000	1.0%
   Over 50 million	~428,000+	2.0%

Special Economic Zones in Serbia

Legal Framework for Free Zones

To accelerate industrial development and attract foreign investment, Serbia enacted the Free Zone Act, overseen by the Ministry of Finance and the Free Zone Administration. This legislation streamlines trade procedures and enhances regulatory support for businesses establishing operations in designated zones.

• Tax and Customs Benefits in Free Zones:
  1. Unrestricted import and export of goods and services, exempt from quotas and standard trade restrictions.
  2. Temporary entry for processing, testing, certification, repair, or promotional activities—duty- and VAT-free when goods are re-exported or transferred to another free zone or customs area.
  3. Imports for construction, equipment, and operational needs within free zones are exempt from customs duties and VAT.
  4. VAT is not levied on transactions within free zones; businesses can claim input VAT credits on eligible purchases.
• Incentives for Zone Operators and Investors:
  1. Access to infrastructure and government services at preferential rates below market levels.
  2. Exemption from land development fees, municipal charges, and network infrastructure costs. Reduced VAT on utilities such as water, electricity, and gas used within the zone.
  3. Full exemption from local utility taxes, land use fees, and public facility charges for up to 10 years.
  4. Direct financial incentives tied to job creation, including state subsidies per new full-time position established.
• Investment Facilitation Measures:
  1. “One-stop shop” service model offering end-to-end support—from feasibility studies and project planning to site selection and licensing.
  2. Foreign investors enjoy national treatment, with no restrictions on ownership, capital repatriation, profit transfers, or asset disposal. Additional support includes streamlined land acquisition and usage rights.

For official information and zone-specific details, visit the Free Zone Administration website: Free Zone Administration of Serbia.

Overview of Serbia’s Special Economic Zones

Serbia’s free zones operate under distinct economic policies tailored to boost export-oriented manufacturing and logistics. Currently, 14 free zones are approved and operational, strategically located along major transport corridors—including Corridor X (E75) and Corridor VII (Danube River). These hubs serve industries ranging from automotive and electronics to agribusiness and ICT.

Beyond free zones, the government supports specialized industrial parks such as:

• BIO4 Campus – a biotechnology and life sciences hub near Belgrade.
• Kragujevac Automotive Industrial Park – home to major European manufacturers.
• Niš and Pirot Electronics Parks – focused on high-tech assembly and R&D.
• National Data Center initiatives enhancing digital infrastructure.

These ecosystems offer integrated services, skilled labor access, and proximity to EU markets, making Serbia an attractive destination for regional headquarters and export platforms. For companies exploring international expansion, professional offshore advisory services like SailGlobal provide tailored support in legal structuring, tax optimization, and cross-border compliance.

Data sourced from the Chinese Ministry of Commerce, updated for 2025 policy landscape.