Favorable Personal Taxation
Apart from salaries, other personal income is predominantly taxed at the rate of 20%. Personal income tax is payable by individuals on different sources of income generated throughout the calendar year. The taxable income includes salaries, income from agriculture and forestry, income from self-employment, income from royalties and industrial property rights, income from capital, income from real estate, and other income.
A taxpayer is a resident of Serbia with a residence or business premises or spends at least 183 days over a period of 12 months in Serbia. Non-residents are taxed with respect to their income generated in Serbia only.
Annual Income Tax
The annual income is subject to a 10% tax. The annual income tax is levied on the income earned by residents. For non-Serbian citizens the annual income tax applies on the income exceeding the amount 5 times the average annual salary in Serbia. The tax rate is 10% for the annual income below the amount of 8 times average annual salary, and 15% for the annual income above the previously mentioned amount.
Property Tax
The rate of the property tax depends whether the taxpayer maintains business accounts. For taxpayers maintaining business accounts, the rate is 0.40%. For taxpayers who do not maintain business accounts, the rate is progressive and depends on the tax base. Legally, the property tax applies to immovable property where an individual has rights of ownership, usufruct, residence, utilization, a long term lease holding (for a period longer than 1 year), and utilization of city building land with an area of more than 10 acres. In this case, immovable properties are considered to be residential and commercial buildings, office space, garages, buildings and recreational space.
