Unlike in EU countries, there are no changes to tax regulations on the horizon in Serbia that would support OECD principles and the Green Agenda, nor have significant amendments been made to domestic tax regulations
Significant changes in taxation are taking place at the international level, such as the OECD Pillar 2 initiative to introduce a global minimum corporate tax rate of 15%, which has been accepted and implemented by many developed countries, and the EU’s introduction of the Carbon Border Adjustment Mechanism (CBAM) tax on products with high carbon content. These changes impact the Serbian tax system and its taxpayers both directly and indirectly. Such changes may reduce the attractiveness of the tax incentives that Serbia provides to foreign investors, and may alter conditions or increase the costs of doing business for domestic companies that are part of larger international groups and/or that export significantly. Unlike many EU member states and other neighbouring countries that are responding and adapting their tax systems to current and upcoming changes, no potential adjustments to domestic tax regulations are yet in sight here in Serbia.
We Support Transparency in Regulatory Changes
The FIC will continue to advocate for ongoing dialogue and the improvement of tax regulations and practices, along with greater transparency and timely public disclosure and consultation on planned amendments to tax regulations
Unfortunately, there have been no significant changes to domestic tax regulations, except for improvements in the electronic invoicing system, to address identified issues and difficulties in practice. The improvement of the electronic invoicing system will contribute to better and simpler reporting on the one hand, while on the other hand it will provide the Tax Administration with more precise and comprehensive insight into the operations of businesses. However, taxpayers face the challenge of responding to these changes in a timely manner by adapting their business information systems, which requires significant time and resources.
A draft law on e-delivery notes is also in the works and should further enhance the digitalisation of business processes for companies, leading to greater efficiency and cost reduction in the long run.
In terms of customs regulations, Serbia signed a Free Trade Agreement with China last year, which came into effect in July this year.
Given that domestic tax regulations have not been amended, no progress has been made on issues that have been pointed out by the FIC for years, and we still don’t see significant readiness for dialogue on the part of state authorities. The Working Group for the Implementation of Recommendations from the Foreign Investors Council’s White Book has not been active in the area of taxation this year either.