Serbia Personal Income Tax Guide 2026

Overview — Poreska uprava (Tax Administration)

The Serbian Tax Administration (Poreska uprava) administers all taxes. The tax year is the calendar year (1 January to 31 December). Serbia operates a self-assessment system where individuals file annual tax returns. Employment income is taxed at source via payroll withholding by the employer. Serbian tax residents are taxed on worldwide income; non-residents are taxed only on Serbian-source income.

Serbia is an EU candidate country with accession negotiations ongoing. Its tax system is gradually aligning with EU standards while maintaining competitive rates to attract foreign investment.

Flat Personal Income Tax Rate — 10%

Serbia applies a flat 10% personal income tax rate on all taxable income — employment income, self-employment income, rental income, capital gains, and other income. At 10%, Serbia has one of the lowest flat income tax rates in Europe, comparable to Bulgaria (10%) and lower than Hungary (15%) and Romania (10%).

Tax-Free Threshold

Serbia provides a substantial tax-free threshold that reduces the effective tax burden:

• General tax-free amount: RSD 25,000 per month (RSD 300,000 per year) — income up to this amount is exempt from IIT
• Pensioner deduction: Additional personal deduction of RSD 36,000 per month for pensioners
• The tax-free threshold is applied monthly through the payroll system for employees

Types of Taxable Income

Serbian IIT categorises income into several types, all taxed at the flat 10% rate:

• Employment income: Salary, bonuses, allowances, and benefits-in-kind
• Self-employment income: Business and professional income (with deemed or actual expense deduction)
• Rental income: Income from leasing property (with prescribed expense ratio of 25%)
• Capital gains: Gains from sale of shares, securities, real estate, and other property
• Investment income: Dividends, interest, and royalties (subject to WHT)
• Other income: Pensions, agricultural income, and other miscellaneous income

IT Sector Incentive

Serbia offers a significant tax incentive for IT professionals working in designated IT parks: the gross salary of IT developers is exempt from up to 50% of IIT (increased to 70% exemption from 2024 onward). This makes Serbia one of the most attractive destinations in Europe for IT talent and employers.

Filing Requirements

Individuals must file an annual personal income tax return by 15 May of the following year. The return is filed electronically through the Poreska uprava portal. Employees with only employment income generally do not need to file as tax is withheld at source. Self-employed individuals, landlords, and those with foreign income must file annually.

FAQs

Is the 10% flat rate really applicable to all income?

Yes, the flat 10% rate applies uniformly to all income categories. However, certain income types may have specific calculation bases or deductions (e.g., rental income allows a 25% deemed expense deduction before applying the 10% rate).

How are foreign taxes on foreign income treated?

Serbia provides a foreign tax credit for income taxes paid abroad, limited to the Serbian tax attributable to that income. Serbia has over 65 double tax treaties that may reduce or eliminate Serbian tax on certain types of foreign income.

What is the IT park incentive?

IT professionals working in designated IT parks (e.g., Belgrade IT Park, Novi Sad) can benefit from a 50% IIT exemption on gross salary (increased to 70% for 2024+), significantly reducing their effective tax rate.

Disclaimer

This guide provides general information about Serbian personal income tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Serbian tax advisor or Poreska uprava directly for advice specific to your situation. InvestmentKit does not provide tax advice.