Serbia does not take sides with any conflicting parties. The country remains neutral and it welcomes foreigners of all nationalities. Relocating to Serbia can bring you several important advantages including the opportunity to reduce your tax burden.
You can establish legal residence in Serbia on the following grounds:
- A job contract with a Serbian employer;
- A business company in the country;
- Study in Serbia;
- Marriage to a Serbian national.
Advantages or immigrating to Serbia
Probably one of the most important advantages that Serbia boasts is a mild climate. All days are sunny between April and October. Besides, Serbians are friendly to foreigners no matter what countries they come from.
Other advantages of relocating to Serbia include the following ones:
- A low level of corruption in comparison to some other Eastern European countries;
- A high level of personal security;
- High-quality insurance-based medical services;
- Social guarantees;
- Low food prices;
- Government support to small business owners.
The Serbian language is used for everyday communication in Serbia but many young people speak English. A pleasant fact to know is that Serbians do not have a heavy accent: their English is perfectly understandable.
Stages of legalizing your prolonged stay in Serbia
The main stages of legalizing you stay in Serbia are as follows:
- Entering the country (citizens of many countries do not have to apply for visas to Serbia);
- Acquiring a temporary residence permit;
- Acquiring a permanent residence permit;
- Acquiring citizenship of Serbia.
Relocation to Serbia
One way of staying in Serbia for a long time is by doing visa-runs every 30 days but this is bothersome. You had better apply for a residence permit in the country.
Temporary and permanent residence permit in Serbia
The names of the permits actually speak for themselves. A temporary residence permit remains valid for one year and it can be extended. A permanent residence permit is valid for five years and it can also be extended. The permanent residence permit holder enjoys almost the same rights as Serbian citizens do.
Legal grounds for obtaining a residence permit in Serbia
The local legislation related to the legal residence issues was last amended in 2018. The main legal grounds that can make you qualified for a residence permit in Serbia include the following ones:
- Purchase of real property;
- Employment;
- Business company registration in Serbia;
- Marriage to a Serbian national or a person who has a permanent residence permit in the country;
- Study in Serbia;
- Scientific research in the country.
The most popular routes to Serbian residency are purchase of property and business company registration.
Taxation system in Serbia
If you would like to immigrate to Serbia, you naturally want to find out beforehand how heavy your tax burden is going to be in the country. We will say from the outset that the taxes are lower in Serbia than they are in most other European countries. This fact certainly makes Serbia attractive for relocating there.
Who decides what is to be taxed and who sets the tax rates?
The body that is responsible for designing the tax system is the Serbian Government. The body responsible for regulating the tax burdens and charging the taxes is the local fiscal service. A separate legislative act is passed for each tax.
However, the legislative acts describe only the principles of taxation and set the terms of payment. They do not set the tax rates: these can be changed by decrees.
What taxes are payable in Serbia?
Several items are taxed in Serbia but much depends on the status of the person/ legal entity paying the taxes. The main items taxable in Serbia include the following ones:
- Profit;
- Added value;
- Personal income;
- Personal property.
Please note that there are other taxable items so you had better apply for a professional consultation if you would like to have a full picture of the tax system in Serbia in 2023. Both private individuals and corporate entities may have to pay other taxes as well.
Corporate taxes in Serbia
Corporations in Serbia have to pay different taxes but the central tax is the corporate income tax. The corporate tax for a Serbian company is 15%.
A 5% tax reduction is available to those companies in Serbia that invest in their own development a billion Serbian dinars or more. The grace period is five years and when it expires, the company starts paying the tax at the regular rate again.
In addition to that, there are other taxes payable by corporate entities in Serbia:
- Social security contributions include three types of payments: pension insurance, medical insurance, and unemployment insurance. The first one is 9.8%, the second one is 5.9%, and the last one is 0.55%.
- Excise taxes vary depending on the excised goods. For example, the excise tax on luxury items can be between 20% and 30%.
- The VAT is 20% in Serbia. For socially significant categories of goods, the rate is 10%.
- Taxes on financial transactions are payable by clearing companies, on barter operations, money transfers, etc. The rate is 0.3% of the transaction.
Even though Serbian companies have to pay several taxes, their overall tax burden is comparatively small.
Personal taxes in Serbia
The main tax payable by a private individual in Serbia is the income tax. The rate depends on the yearly amount of income that the person makes. If it is not more than three times as high as the average income in the country, the tax is 10%. If the personal income exceeds this amount, the tax rate grows. The rate also depends on the types of activities that the person is engaged in. A private farmer, for example, may have to pay 20% as an income tax.
The employer deducts the tax from the person’s salary so the salaried worker does not have to bother about paying the income tax in Serbia
- Private individuals are also taxed in the following items in Serbia:
- Real property. The rate is set by the municipal authorities and it can be anywhere between 0.3% and 2%.
- Gifts/ inheritance. The rates can be between 3% and 5%. Relatives of the first and second degreeы of kin are exempted from the taxes.
- Transfer of property rights. The tax rate is 5% of the property value that is assessed by independent experts.
As you can see, personal taxes are also comparatively low in Serbia. True, there are a couple European countries that charge even less in taxes than Serbia does. The personal income tax rate is only 10% in Bulgaria, for example. The corporate tax rate is 12.5% in Cyprus. In any case, however, Serbia finds itself on the list of low-tax European countries. Citizens of all Western European countries have to pay more in taxes anyway. The opportunity to reduce our tax burden can be one of the reasons why you should consider relocating to Serbia.
