Taxpayers in Serbia are obliged, in accordance with the Law on Corporate Income Tax (hereinafter: the “Law”), to separately disclose transfer prices in tax balance sheet, i.e. the value of transactions realized with related parties.

Besides disclosure based on transfer prices, there is also an obligation of disclosing value of concerned transactions calculated in accordance with the “arm’s length” principle, i.e. prices under market conditions.

If the revenue realized from transfer prices is lower than the revenue calculated at market prices, or if expense realized from transfer prices is higher than expense calculated at market prices, taxpayer is obliged to increase taxable base for respective difference.

The Law stipulates that in process of determining “arm’s length” interest rates taxpayer can apply either interest rates published by the Ministry of Finance on annual basis or general methods for determining market prices. When choosing a certain approach, taxpayer is obliged to apply the same method for all loans and credits with related parties.

Serbian Minister of Finance issued the Rulebook on interest rates that are considered to be in line with the “arm’s length” principle for 2022 (hereinafter: the “Rulebook”). The Rulebook entered into force on 24th December 2022.

The Rulebook prescribed for 2022 the following interest rates that are considered to be in accordance with the “arm’s length” principle (mentioned rates for credits are applied to loans as well):

1. for banks and financial leasing providers:

  • 0.50% for short-term loans;
  • 2.86% for long-term loans;
  • 2.75 % for EUR loans and RSD loans indexed in EUR;
  • 3.91% for USD loans and RSD loans indexed in USD;
  • 2.61% for CHF loans and RSD loans indexed in CHF;
  • 3.96 % for SEK loans and RSD loans indexed in SEK;
  • 1.88 % for GBP loans and GBP loans indexed in GBP;
  • 2.31% for RUB loans and RSD loans indexed in RUB.

2. for other legal entities:

  • 3.12% for short-term loans in RSD;
  • 3.39% for long-term loans in RSD;
  • 2.25% for short-term loans in EUR and RSD loans indexed in EUR;
  • 2.73% for long-term loans in EUR and RSD loans indexed in EUR;
  • 6.94% for short-term loans in CHF and RSD loans indexed in CHF;
  • 1.85% for short-term loans in USD and RSD loans indexed in USD;
  • 3.54% for long-term loans in USD and RSD loans indexed in USD.

Law firm GCLegalTax

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