The Serbian Ministry of Finance has published two new rulebooks in connection with the application of the Corporate Income Tax Law.

These rulebooks may affect companies that have intra-company transactions and foreign companies rendering services to Serbian companies.

The first rulebook prescribes safe harbour rates applicable to intra-company loans and credits in 2018. Compared to 2017, the rates applicable to banks and financial leasing companies have been slightly reduced, while the rates applicable to other companies have been reduced by approximately 15%, with the exception of rates for CHF credits, which are now higher. The companies are free to apply either these rates or appropriate OECD transfer pricing methods.

The second rulebook regulates in more detail the application of the recent changes in the Corporate Income Tax Law concerning withholding tax on services. The rulebook lists the specific services as market research services, accounting and auditing services, and legal and business consulting services. Income from such services, unless they are provided by a tax haven legal entity or exempt under the applicable double tax treaty, is taxable in Serbia with a 20% withholding tax, regardless of the place where they have been or will be provided or used. The rulebook comes into effect on 1 April 2018.

Both rulebooks are available at the website of the Ministry of Finance.