Operating costs


Operating costs in Belgrade are very favourable when compared with other large cities in Central and Eastern Europe. First and foremost, tax rates are amongst the lowest in this part of Europe, average earnings are at a similar level as in other neighbouring countries, while the majority of utilities prices are lower than elsewhere in the region.


The tax system is characterised by exceptionally low tax rates. Profits tax is one of the lowest in Europe, and VAT, Income Tax and Social Security Contributions are lower than in many of the countries of Central and Eastern Europe.


The rate of Value Added Tax is:

  • 18% (general rate),
  • 8% (special rate).

Value Added Tax is paid on delivery of goods and services for renumeration within the country as well as on import of goods.

The tax base is calculated on the value of the goods or services delivered, plus excise duties, customs duties, other import duties and all secondary costs relating to the sale of the goods or services.


Profits tax is paid at the rate of 10%.

The basis of the tax computation is the taxable profit shown in the fiscal accounts. It is arrived at by agreeing the profit per the Profit and Loss according to the method set out in the Profits Tax Act (Zakon o porezu na dobit).

Tax is deducted at the rate of 20% on dividends, shares of company profits, royalties and interest.


The rate of income tax amounts to 12% of earned income, or 20% of other types of income. Other types of income include income from agriculture and forestry, self-employment, royalties and industrial property, capital, property and capital gains and other income.

Residents, that is persons who are resident in the territory of Serbia and spend a minimum of 183 days in the country during the fiscal year pay tax on income earned both in the country and abroad. Non-residents are taxed only on the amount of income they earn in Serbia. For the purposes of calculation of Income Tax, the tax payer is the employee but the employer is required to account for and pay tax on their behalf. The tax base in this case is made up of gross earnings, which are comprised of net earnings plus social security contributions.


The rate of annual income tax is 10% or 15% depending on the level of annual income.  The lower rate of tax applies to income less than 8 average annual salaries in Serbia, while the higher rate applies to incomes above this amount.

This tax is payable if the annual income is in excess of 3 average incomes in the country, in the case of Serbian citizens, whereas for foreign nationals the lower limit amounts to 5 average annual incomes.


The rate of property tax amounts to 0.4% for tax payers who keep books of account, while progressive rates of between 0.4% and 3% apply to all others, including a fixed tax amount.

Property tax is paid on the following property rights: ownership rights, usufruct, use and dwelling, time sharing, long-term lease of apartments and dwelling buildings, the use of building land above 0.25 acres (0.1 hectares) in area, as well as property rights to shares issued in the name and to the benefit of a limited company.


The rates of social security contributions are:

  • pensions and invalidity insurance – 11%
  • health Insurance – 6.15%
  • unemployment Insurance – 0.75%

Both employers and employees are liable for contributions, and the basis for the computation is gross earnings.


During 2006 average monthly net earnings in the City of Belgrade amounted to 27,476 dinars or 327 euros. According to the most recent data for August 2007, net salaries had risen to 34,779 dinars, or 435 euros, as a result of the appreciation of the currency in relation to the Euro.

On the other hand, from 2007 the taxation burden on employers was significantly reduced. Income tax was reduced from 14% to 12%, and at the same time a fixed reduction in the base for tax and contributions of 5050 dinars (about 65 euros) per month was introduced. As a result of these measures, the total tax and contribution liability on employers was reduced from 73% to 63% of net earnings. When tax relief for employees under 30 and over 45 or 50 years of age is taken into account, the tax liability to the state for this category of employee is even less than this percentage.


The prices of certain public utilities, such as electricity, are at present the lowest in South-East Europe. As far as building land and office premises are concerned, after the proposed construction land reforms, as well as the completion of projects for the building of a large number of top-class business properties in the city, a reduction in this input cost is to be expected.