Tax Incentives in the Republic of Serbia
Take advantage of statutory tax incentives for employment, investments, innovation, and business development.
The Republic of Serbia offers a wide range of tax incentives and benefits for both domestic and foreign companies. On this page, you can find an overview of the most important tax incentives that can help reduce your business operating costs.
Employment Incentives
Newly Settled
1. Incentives for salaries of newly settled employees
Who it applies to:
– Newly settled individuals (returnees and foreign experts employed in Serbia)
What is subsidized:
– Personal income tax on salaries of newly settled employees
Amount of incentive:
– 70% reduction of the tax base
– Valid for up to 5 years from the start date of employment
Persons with Disabilities
2. Incentives for employing persons with disabilities
Who it applies to:
– Persons with disabilities employed on a permanent basis in the private sector
What is subsidized:
– Personal income tax
– Mandatory social security contributions (paid by the employer)
Amount of incentive:
– 100% exemption from personal income tax
– 100% exemption from employer’s social security contributions
– Duration: 3 years
Unemployed Person
3. Incentives for employing unemployed persons registered with the National Employment Service (NES)
Who it applies to:
– Individuals who were registered as unemployed with NES before employment
What is subsidized:
– Part of the paid personal income tax
– Part of social security contributions (both employee and employer portions)
Amount of incentive:
– 65% (1–9 newly employed)
– 70% (10–99 newly employed)
– 75% (100+ newly employed)
– Valid for salaries paid until 31.12.2026
Two Unemployed
Persons
4. Incentives for employing at least two individuals registered with NES
Who it applies to:
– Employers who hire at least two individuals registered with NES
What is subsidized:
– Personal income tax
– Mandatory social security contributions
Amount of incentive:
– 75% refund of taxes and contributions
– Valid until 31.12.2026
Start up
- Employees -
5. Incentives for employers in innovative activities (startups)
Who it applies to:
– Newly established innovative companies and their founders employed in the company
What is subsidized:
– Salaries of founders employed in the innovative company
Amount of incentive:
– 100% exemption from personal income tax
– 100% exemption from social security contributions
– Maximum base: 150,000 RSD per month
– Duration: 36 months
R&D
- Employees-
6. Incentives for research and development (R&D)
Who it applies to:
– Employees directly engaged in research and development activities
What is subsidized:
– Salaries of employees engaged in R&D activities
Amount of incentive:
– 70% exemption from personal income tax
– 100% exemption from pension and disability insurance contributions
– Applicable from 01.03.2022
* Tax incentives for employment, as a rule, cannot be used simultaneously with other government financial incentives for the same employee, unless explicitly provided otherwise by special regulations.
Tax Incentives for Investments
Corporate Income Tax – 0%
Companies making significant investments in Serbia may qualify for long-term corporate income tax exemptions for up to 10 years. The duration and scope of the exemption depend on the size of the investment and the number of newly employed workers. This benefit is available to companies that:
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Invest at least 1 billion RSD in fixed assets
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Employ a minimum of 100 workers on permanent contracts
Incentives for Research, Development, and Innovation (R&D)
R&D Revenue Deduction – 80%
R&D Expense Deduction – 50%
Companies can deduct 50% of research and development expenses from their tax base, reducing corporate income tax. This incentive encourages investment in innovation and technological development.
Revenue generated from a company’s own intellectual property (software, patents, copyrights) can be excluded up to 80% from the tax base, significantly lowering corporate income tax and promoting innovation.
R&D Employee Incentives – 70%
Tax Credits – 30%
Investors in innovative startup companies can receive a partial refund of invested funds through a tax credit – up to 30% of the investment can be used to reduce the company’s or investor’s tax liability. This effectively “returns” part of the investment via lower taxes, facilitating financing of new technologies and projects.
Employers can benefit from a 70% exemption on payroll taxes for employees working exclusively on R&D projects. This reduces labor costs and encourages employment in technology and innovation-driven companies.
International Agreements
Tax Rates – 0%
Serbia has signed 65 valid agreements to avoid double taxation covering income, capital, and property. In addition to agreements with most European countries, Serbia has concluded agreements with numerous countries in Asia and Africa, simplifying international business and reducing tax burdens for domestic and foreign investors. Tax rates under these agreements can be reduced up to 0%, allowing full exemption on certain income.
Free Trade Agreements
Serbia has multiple trade agreements enabling domestic companies to export goods to specific countries and economic blocs under favorable conditions, often duty-free or with significantly reduced tariffs.
CEFTA
EU
EFTA
EAEU
Serbia has signed the Stabilization and Association Agreement (SAA) with the European Union, enabling nearly free trade of goods between Serbia and EU countries. Most products can be exported under favorable customs conditions with gradual tariff elimination, opening access to a market of over half a billion consumers.
The Central European Free Trade Agreement (CEFTA) covers Western Balkan countries, allowing duty-free trade among members:
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Serbia
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Montenegro
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Bosnia and Herzegovina
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North Macedonia
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Moldova
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Albania
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Kosovo*
(*Transitional provisions under UN Resolution 1244)
Serbia has a free trade agreement with the Eurasian Economic Union (EAEU), enabling import and export under favorable terms with:
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Russian Federation
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Belarus
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Kazakhstan
Serbia has a free trade agreement with the European Free Trade Association (EFTA), eliminating tariffs on a large portion of industrial products from Serbia, enabling favorable exports to:
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Norway
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Switzerland
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Iceland
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Liechtenstein
China
Serbia and China have a bilateral trade agreement reducing tariffs on specific products and facilitating trade between the two countries. The agreement is part of broader economic cooperation, including investments in infrastructure, industry, and technology.
Turkey
Serbia and Turkey have a bilateral free trade agreement, allowing duty-free or reduced-duty export and import for most industrial and agricultural products.
*The information on this page is for informational purposes only and does not constitute legal or tax advice. For up-to-date and detailed information, consultation with a professional advisor or relevant government institutions is recommended.