According to the Corporate Income Tax Law, taxpayers performing transactions with related parties are required to submit transfer pricing documentation together with their tax balance. This documentation presents transactions with related parties and includes an analysis of whether the terms of such transactions comply with the arm’s length principle, i.e. the conditions that would apply between independent parties.
The Corporate Income Tax Law provides certain exceptions to this rule, recognizing that some expenses, although not directly connected with business activities, have broader social or economic significance. Therefore, such expenses may be recognized in the tax balance, but only within prescribed limits and subject to specific conditions.
Property tax is calculated from the moment the tax liability arises and is payable for each tax year as long as the liability exists. Taxpayers who maintain accounting records are required to determine their own property tax liability for real estate located in the Republic of Serbia through the self-assessment procedure prescribed by law.
A representative office does not have separate legal personality and therefore does not act in its own name. Any obligations arising from its activities remain the responsibility of the foreign company that established it.
In practice, foreign companies often operate in Serbia through a branch registered with the Serbian Business Registers Agency. The branch maintains accounting records in accordance with the Accounting Law and is a corporate income taxpayer on profits generated in Serbia, under rules largely comparable to those applicable to resident companies.
