The conditions under which entrepreneurs and legal entities in Serbia can make foreign currency payouts are stipulated by the provisions of the DECISION on Cases and Conditions of Payment, Collection of Payment, Pay-in and Pay-out in Foreign Cash (“Official Gazette of the Republic of Serbia” no. 51/2015, 3/2016, 29/2016, 91/2016, 24/2017 and 29/2018).
For companies, it is particularly interesting that the only payment that can be made in foreign cash is the payment of compensation for travel expenses. The question we often hear in practice is if there is a possibility to pay some other compensations, such as rental fee payments made between legal and natural persons, in foreign cash. First of all, payouts like these are not in accordance with the Individual Income Tax Law. Every form of compensation payout made by a legal entity to a natural person is subject to the withholding individual income tax calculation. The legal entity calculates and withholds the individual income tax on behalf of the natural person at the 20% rate, withholding recognized expenses, the percentage of which varies from case to case.
A resident i.e. natural person can carry foreign cash abroad in the total amount, which shall not exceed €10,000 in the other foreign currency countervalue. This means that the subsistence allowance i.e. travel expense limit is €10,000 or in some other currency under the NBS official average exchange rate.
Those who can make payouts in foreign cash are:
– diplomatic and consular representative offices
– exchange offices can receive payments from natural persons in foreign cash based on currency trading; they can pay out foreign cash to natural persons and, based on these operations, they can have a foreign currency cash vault
– a public postal operator performing activities related to international payment orders may receive payments from a natural person and make payouts in foreign cash based on the activities it performs and own a foreign currency cash vault accordingly
– residents providing payment services to natural persons may, in relation to their activity, make payouts to natural persons and collect money from them in foreign cash
– in the Republic of Serbia, donations for humanitarian, scientific and cultural purposes can be payed in foreign cash to foreign currency accounts opened for these purposes with banks i.e. the National Bank of Serbia
– residents providing international freight and passenger transport services may keep foreign cash in their foreign cash vault in order to pay travel expense compensation to the employees conducting the transport, as well as to pay expenses related to the transport of goods during the travel, which do not exceed €1,000 i.e. other foreign currency equivalent calculated under the NBS official average exchange rate.