Incentives
FINANCIAL INCENTIVES
INCENTIVES OF THE REPUBLIC OF SERBIA
Funds are allocated for:
- Investment projects in the manufacturing sector
- Automation of existing capacities and innovations in industries with high-added value
- Food processing industry and automation in food production
- Investments in hotel accommodation service sector
- Projects related to services provided by service centers.
Total state subsidies for investment projects can reach 50% – 70% of the investment value, depending on the company’s size, investment value, or based on the gross earnings of employees over two years.
INCENTIVE PROGRAMS IN VOJVODINA
Subsidies are granted through the Provincial government for:
- Production and services
- Agriculture
- Energy
- Tourism and hospitality
- Traditional crafts
- Creative Industry
- Startup businesses
- Women’s entrepreneurship.
RAV and the Provincial Secretariat for regional development, interregional cooperation, and local self-government are implementing a program for subsidized equipment procurement with a 50% grant for the manufacturing sector. A special component of the program provides support for suppliers of multinational companies.
The Developement Fund of AP Vojvodina provides long-term and short-term loans for investments, working capital, climate-friendly investments, and projects approved through the IPARD program.
Local self-governments have their incentives for various purposes.
TAX INCENTIVES FOR INVESTORS IN SERBIA
10-YEAR CORPORATE TAX HOLIDAY
For investments over one billion dinars and employing 100 people, with benefits starting upon generating profit. Corporate Profit Tax Law.
TAX INCENTIVES FOR EMPLOYMENT IN SERBIA
Full or partial exemption from income tax and social security contributions for hiring new employees.
LOSS TRANSFER
The Tax Law of Serbia allows the transfer of losses stated in the tax return to the next accounting period within a period of up to 5 years.
REDUCTION OF ANNUAL INCOME TAX UP TO 50%
The basis for annual personal income tax is the taxable income minus personal deductions, capped at 50%.
PERSONAL INCOME TAX IN SERBIA IS 10%
The non-taxable part of the salary is RSD 18,300 per month for a full-time employee.
SUPPORT FOR STARTUPS
Exemption from income tax for digital nomads during the first 90 days of stay in Serbia contributes to the attractiveness of entrepreneurial spirit.
DOUBLE TAXATION AVOIDANCE
If a resident taxpayer generates a profit in another country, and tax is paid on that profit in the other country, a tax credit will be granted for the corporate income tax determined by the provisions of this Corporate Profit Tax Law in the amount of tax paid in the other country. This tax credit cannot exceed the amount calculated using the provisions of the mentioned law on income earned abroad. The same right is enjoyed by a taxpayer who earns income and pays income tax in another country, provided that a Double Taxation Agreement exists with that country. Currently, 64 countries have signed a Double Taxation Avoidance Agreement with Serbia, including Albania, Armenia, Austria, Azerbaijan, Bosnia and Herzegovina, Belarus, Belgium, Bulgaria, Canada, China, Croatia, Cyprus, the Czech Republic, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, the United Kingdom, Greece, Hong Kong, Hungary, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, South Korea, Kazakhstan, Kuwait, Latvia, Libya, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Morocco, Moldova, Montenegro, the Netherlands, Norway, Pakistan, Poland, Qatar, Romania, Russia, North Korea, Slovakia, Slovenia, Spain, Sri Lanka, Sweden, Switzerland, Tunisia, Turkey, UAE, Ukraine, Vietnam.
TAX INCENTIVES FOR INNOVATIVE ACTIVITIES
Innovators in Serbia have access to tax incentives that help reduce the costs of starting a business, hiring a qualified workforce, investing in innovations and innovative companies, and protecting intellectual property rights.
- Exemption from paying 70% of income tax and 100% of contributions for mandatory pension and disability insurance for newly employed individuals working on research and development projects
- Tax exemption for founders of startup companies for 3 years
- Recognition of R&D costs in double the amount in the tax balance
- “IP BOX” regime – the right of a startup company to exclude “qualified income” from the tax base in 80% of income generated from research and development activities
- A tax credit of 30% for investments made in startups
- Reduction of personal income tax for “business angels” investing in startups through venture capital funds.
Income Tax Law Contributions for Mandatory Social Insurance Law Corporate Profit Tax Law Alternative Investment Funds Law.
