What are the Taxes on LLCs in Serbia?

A Limited Liability Company (LLC), or d.o.o., is the most widespread legal form for business in Serbia. Such an entity makes it possible to engage in any legal activity, and it limits the owner’s liability by its contribution to the company. 

Both individuals and legal entities, residents and non-residents are welcome to register a Limited Liability Company in Serbia.

Taxes on LLC in Serbia

If you engage in business activities in the territory of Serbia, you will have to pay taxes. The taxes payable by a Limited Liability Company may be conditionally divided into four groups:

  • Income tax
  • VAT
  • Salary tax
  • Additional taxes
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If you want to have an overview of taxes in European countries, please read our article.

Corporate Tax for a Serbian Limited Liability Company

The income tax rate for a Serbian company is 15%. A Limited Liability Company pays the tax on its income in Serbia and all over the world.

If the income is paid in the form of dividends, the recipient will have to pay an additional 15% (this is applied to resident dividend recipients).

The dividend tax for foreigners depends on the country of their tax residency. If it is on the list of 63 countries that are parties to double taxation treaties with Serbia, the rate may be reduced to 5%.

If a foreign company that receives dividends is in a country with tax benefits (an offshore jurisdiction), the tax will amount to 25%.

Different benefits are available. For example, you can pay 3% corporate tax using IP Box regime. All R&D expenses reduce the amounts on which the corporate income tax is paid.

Value Added Tax for a Limited Liability Company in Serbia

The VAT rate in Serbia is 20%, and in some cases it may be reduced to 10% (basic food products, daily newspapers, medicines, public transport, etc.) and 0% (export of goods and services). 

The tax is paid once a month; however, if the turnover does not exceed RSD 50 million, you can pay it once a quarter. Declarations should be submitted before the 15th day of each taxation period.

If the company is registered in one of the special economic zones (SEZs), it may be exempted from VAT: the latter will be paid only if the products are supplied to Serbia.

Salary Tax Payable by Serbian LLCs

The income tax payable by the population is 10%, and if the income comes from business, dividends, or real estate leasing, it comes to 10-20%. 

The social insurance tax makes up 16.15% for the employer and 19.90% for the employee.

The total salary tax paid by an LLC may amount to 59-65%. 

If the company owner does not work in the LLC, there is no need to pay taxes for him. If he occupies the director’s position, his work is remunerated in the same procedure as in the case with other employees.

If the company owner works in another company, the LLC may additionally pay deductions to the pension fund. If the company owner works in a company abroad, the LLC in Serbia is under no obligation to pay a social insurance tax if Serbia concluded an agreement on social insurance with this country. If there is no agreement, about 90 euros a month will be charged.

There are also different benefits. Since 2022, a 70% discount on income tax and social deductions payment has been offered to employees (Serbian citizens) for 3 years if their salary is above average in the country. The founders of start-ups are exempt from salary tax and contributions in the first 3 years.

All the questions related to taxes payable by employees, optimization of LLC’s expenses in Serbia, company registration and opening a bank account can be discussed with the portal experts.

Other Taxes Payable by a Serbian Limited Liability Company

This group includes the following taxes:

  • Eco tax — a fixed environmental protection tax in the amount of RSD 5,000 a year (about 43 euros).
  • Utility bills for company lighting are usually paid by the company whose income exceeds RSD 50 million, but there are other conditions as well. The amount is calculated on a case-by-case basis.
  • Membership fee to the Serbian Chamber of Commerce.
  • Customs duties and excise taxes: the rate ranges from 0% to 57.6% depending on the kind of goods (the highest amount is paid on tobacco cigarettes).
  • The real estate tax does not exceed 0.4%, or 2.5% if you sell the property.  

If you want to know more about real estate taxes in Serbia, please read our article.

Register a Limited Liability Company in Serbia

An LLC in Serbia can be registered by both residents and non-residents (foreigners). We can help you set up a company and open a bank account if you need to! Our team has been working from its office in Belgrade for many years by offering services to investors, entrepreneurs, and those wishing to obtain a residence permit with a view to permanent residence in Serbia.

Find out more about Limited Liability Company registration in Serbia on our portal or write to us at info@offshore-pro.info

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