Tax base and tax rate of property tax – Serbia

The tax rate is set by a decision of the local government body until November 30, 2024. If the decision establishes:

• the tax rate is below 0.4%, the tax is determined at this rate;
• rate of 0.4% or higher than 0.4%, the tax is determined at a rate of 0.4%.

The Law on Property Tax provides for several methods for determining the tax base. The taxable base for real estate of taxpayers who keep accounting books varies depending on the real estate valuation base in accordance with the accounting rules and whether the local government has published average prices for the relevant real estate by zone within the prescribed period. The obligation to separate the value of buildings from the value of the land associated with them for accounting purposes also has a certain impact on determining the tax base. For some real estate objects, the basis is the cadastral value, while for others it is always the book value.

The method for determining the tax base for property tax of taxpayer organizations that maintain accounting records does not depend on the type of its predominant registered activity.

This means that the tax base for property tax of organizations whose main registered activity is warehousing is determined in the same way as the tax base for property tax of organizations of other taxpayers who maintain accounting records.

1. FAIR VALUE OF REAL ESTATE AS A BASIS FOR PROPERTY TAX

A taxpayer using the fair value method to value real estate in accordance with IFRS and the adopted accounting policy cannot determine the tax base in any other way (for example, by using the average price determined by a decision of a local government body).

Determination of the tax base in the amount of fair value:

• not subject to annual assessment;
• is not conditioned on the performance by certain persons — for example, audit firms;
• implies that the fair value estimate (regardless of who the valuer is) must be based on relevant parameters and that there is appropriate documentation to support this (e.g. a survey or appraisal report, etc.).

2. DETERMINING THE TAX BASE BY USING THE ELEMENTS:

USABLE AREA AND AVERAGE PRICE PER 1 M² OF THE RELEVANT REAL ESTATE

In order for the taxpayer to be able to correctly determine the tax base in this way, it is necessary:

1. determine in which zones of local government entities the real estate for which the tax is determined is located (in accordance with the decision on zones published on 30.11.2024);
2. determine the type of real estate (from one of the groups provided by law);
3. determine the useful area of ​​the real estate for which the tax is determined, namely:

• land – total area of ​​the land plot (excluding the area under the building);
• building – the sum of the areas of the floors between the internal sides of the perimeter walls of a building (excluding the areas of balconies, terraces, loggias, stairwells that extend beyond the dimensions of the building, unadapted attic spaces and spaces that are in the common indivisible property of all owners of individual parts of one building, with the exception of the area under load-bearing walls and load-bearing columns that pass through the building, which are simultaneously a separate and common part of the building), and for a building that does not have a horizontal floor area or perimeter walls, the usable area is the area of ​​its vertical projection onto the ground.

4. obtain information on the average price per 1 m² of the relevant type of real estate in the area in which it is located (from the decision of the local government body published on 30.11.2024).

3. ACCOUNTING VALUE AS A TAX BASE

In cases provided by law, the value of real estate is its book value, i.e. the value recorded in the accounting books on the last day of the taxpayer’s financial year in 2024.

However, when the tax needs to be determined for land with a building using the average price for 1 sq. m of the corresponding real estate, and the zones or the average price for 1 sq. m of the corresponding real estate are not published in either the zone or the most equipped zone according to which the tax for 2024 was determined for taxpayers who keep business books, if:

• there is no tax liability for any of these properties (neither for the land nor the building), the value of real estate for which a tax liability exists is the book value that includes the value of that real estate expressed on the last day of the taxpayer’s business year for 2024;
• on that land there is a facility referred to in Article 7, paragraph 4 of the Law, so its value is the assessment of a construction expert, the value of land and other facilities for which a tax liability exists is the book value that contains their value expressed on the last day of the taxpayer’s business year in 2024.

4. CADASTRAL VALUE OF THE PROPERTY INCLUDED IN THE TAX BASE

The cadastral value of an object, assessed by a certified construction expert as of the last day of the taxpayer’s financial year in 2024, consists of the value of objects that the taxpayer does not reflect separately and the value of the corresponding land plot, which includes the following buildings:

• where the manufacturing plants of the processing industry used to carry out these activities are located;
• for the production, transmission and distribution of electric power, excluding trading and management;
• for gas production;
• for the production of hot water, cold air and ice;
• for waste processing and disposal;
• in which the processes necessary for the reuse of materials take place;
• warehouses and storage facilities.

Thus, the value of the listed objects is determined even in cases where the taxpayer has not indicated their value in the accounting books.

If the cadastral value is included in the tax base, it is assessed annually.

5. TAX BASE FOR PAYMENT OF OWNERSHIP TAX

When paying property tax, the tax base is determined by applying the average price per 1 m² and the usable area without reducing the value of the objects taking into account depreciation.

6. PURCHASE PRICE AS A TAX BAS

With respect to real estate, the tax liability which arises during 2025 or in 2024 after the end of the taxpayer’s financial year in 2024, the tax base is determined in the manner specified above, and the tax is determined for the part of 2025, starting from the date the tax liability arose.