Serbia Tax Guide for Foreigners (2026): Corporate, VAT, Paušal & Dividends
Serbia’s tax system is one of the simpler ones in the region, which is a big part of its appeal to foreign founders. Low flat rates, a clear VAT threshold and a wide treaty network make it predictable. This guide gives foreigners the key 2026 numbers — corporate tax, VAT, the flat-rate paušal, dividends and double-tax treaties — in plain English.
Corporate profit tax: 15% flat
A Serbian company (a d.o.o.) pays 15% flat corporate profit tax (porez na dobit) on its taxable profit. There are no progressive brackets — it is a single flat rate. That puts Serbia among the lower corporate-tax jurisdictions in Europe, which is one reason it attracts holding and services companies.
VAT (PDV): 20% standard, 10% reduced
Serbia’s VAT is called PDV:
- Standard rate: 20% — applies to most goods and services.
- Reduced rate: 10% — applies to a defined list (certain food, utilities, medicines and similar).
You must register for VAT once your taxable turnover exceeds 8,000,000 RSD in the previous 12 months. Below that you can register voluntarily if it helps you (for example, to reclaim input VAT). We cover the mechanics in detail in VAT in Serbia for foreign companies, and you can sanity-check amounts with our VAT calculator.
Flat-rate paušal for sole traders
Instead of a company, many freelancers and small operators register as a preduzetnik and choose the flat-rate (paušal) regime. The tax authority sets a fixed monthly tax and contributions based on your activity code and location — you do not keep books or track profit, as long as your annual income stays under 6,000,000 RSD. It is the simplest, cheapest option for solo IT contractors. Read more in our Serbia for IT freelancers guide, including the all-important independence test.
Dividends: 15%
When a d.o.o. distributes profit to its owner, dividends are taxed at 15%. For a non-resident shareholder, a double-tax treaty can reduce that withholding rate — sometimes significantly — so the country you are tax-resident in matters.
The headline rates at a glance
| Tax | Rate (2026) | Notes |
|---|---|---|
| Corporate profit (porez na dobit) | 15% flat | On company taxable profit |
| VAT standard (PDV) | 20% | Most goods/services |
| VAT reduced | 10% | Defined list |
| VAT threshold | 8,000,000 RSD | Turnover, previous 12 months |
| Paušal income cap | 6,000,000 RSD/yr | For flat-rate sole traders |
| Dividend tax | 15% | May be lower under a treaty |
| Salary tax | 10% flat | On (gross − non-taxable allowance) |
Worked example: profit to your pocket
Suppose a d.o.o. makes 1,000,000 RSD of taxable profit and distributes all of it:
- Corporate tax at 15% = 150,000 RSD → 850,000 RSD remains.
- Dividend tax at 15% on 850,000 RSD = 127,500 RSD.
- Owner receives 722,500 RSD.
A double-tax treaty in your home country could lower the dividend portion — always check your specific treaty.
Double-tax treaties
Serbia has a broad network of double-tax treaties (DTTs). For a foreign founder these matter in two ways: they can reduce the withholding tax on dividends, interest and royalties paid out of Serbia, and they prevent the same income being taxed twice. Because the outcome depends on your country of tax residence, treat treaty relief as case-by-case rather than automatic.
Honest note: near-EU, not EU
Serbia is not in the EU single market. None of the above gives you an EU VAT number or EU market access. Serbia is a low-cost base next to the EU with simple, low taxes and a strong treaty network — a good fit for many remote and services businesses, but not a substitute for an EU jurisdiction if you need single-market access.
FAQ
What is the corporate tax rate in Serbia? A flat 15% on company profit. No progressive brackets.
When must I register for VAT? When taxable turnover exceeds 8,000,000 RSD over the previous 12 months. Voluntary registration is possible earlier.
How are dividends taxed for a foreign owner? At 15% in Serbia, but a double-tax treaty with your country of residence may reduce the rate.
Is the paušal regime really tax-free bookkeeping? You pay a fixed monthly tax and contributions and keep no books, as long as annual income stays under 6,000,000 RSD. It is simple, not free.
Want your numbers run properly? See our accounting services in Serbia or contact us for an honest, orientational assessment — in English.