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Serbia: Living There - Tax Issues

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Living There

INDIVIDUAL TAXATION

Residents are taxed on their worldwide income. Married couples are taxed separately.

INCOME TAX

Income is classified into different categories:

• Income from employment
• Income from agriculture and forestry
• Business and professional income
• Income from royalties
• Investment income (dividends, interest)
• Income from immovable property
• Capital gains
• Other income

Income is aggregated at taxed at progressive rates. The tax bands depend on the average annual salary, annually set by the authorities.

The estimated average annual summary for 2008 is RSD567,445 (€6,431). Residents’ aggregate income up to three times the average annual summary is exempted from taxation. Residents are taxed at the following progressive rates:

In contrast, foreign nationals’ aggregate income will only be exempted if it is less than five times the average annual salary (which is estimated at RSD567,445 or €6,431 for 2008). Foreign nationals residing in Serbia are taxed at the following tax rates:

The basic personal allowance for Serbian residents amounts to RSD226,978 or €2,572 (40% of the average annual salary). Each dependant can claim a maximum of RSD85,1171 or €965 (15% of the average annual salary). Total allowances must not exceed 50% of the aggregate income of the household.

CAPITAL GAINS TAX

Capital gains realized by residents from the sale of Serbian property are taxed at a flat rate of 20%. The taxable gain is the selling price less the acquisition price (as revalued by the consumer price index) and depreciation costs.

If the capital gain is invested in housing within a 60-day period, the gain is exempt from tax. Any capital gain realized through a sale of property obtained before 24 January 1994 is also exempt from capital gains tax.

PROPERTY TAX

Real Estate Tax

Property tax in Serbia is paid by the individual owner of the property rights. Properties valued at RSD400,000 (€4,533) or less are exempt from property tax. Property tax is levied on the property value at the following progressive rates:

Serbia - more data and information

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