Taxes in Serbia for Expats and Retirees: What You Need to Know

Taxes are one of life’s certainties — and moving to a new country doesn’t make them disappear. For foreigners considering Serbia, the good news is that the system is relatively straightforward compared to many Western countries. However, it’s essential to understand how Serbian taxation applies to expats, retirees, and foreigners establishing businesses so you can plan effectively and avoid costly surprises.

This article provides an overview of Serbia’s tax obligations for individuals and businesses, explains how residency affects tax liability, and outlines how double taxation treaties and special incentives may benefit you.

For individuals, Serbia applies a flat 10% personal income tax. If you are self-employed, you are also responsible for paying social contributions (pension, health, and unemployment insurance). These contributions are typically calculated alongside your income tax.

For many expats and retirees, the critical question is whether pensions or other foreign income will be taxed in Serbia. This depends on tax residency status and the existence of a double taxation treaty with your home country.

If you decide to establish a business in Serbia, corporate profits are taxed at 15%. This applies to net profits after allowable deductions.

Entrepreneurs may also register under Serbia’s flat-rate tax system, where a set amount covers both income tax and social contributions. This option is popular with small business owners and freelancers because it simplifies reporting and lowers the overall tax burden.

For businesses operating in the VAT system, the standard rate is 20%, with a reduced rate of 10% for essentials. Registration for VAT is mandatory once annual revenue exceeds 8 million RSD (approximately €68,000), although businesses may voluntarily register earlier if advantageous.

Serbia taxes based on residency, not citizenship. You become a Serbian tax resident if you spend 183 or more days in Serbia within a 12-month period.

• Tax residents are taxed on their worldwide income.

• Non-residents are taxed only on income earned within Serbia.

For retirees, this distinction is crucial. If you receive a pension abroad but spend less than 183 days a year in Serbia, your pension generally remains taxed in your home country. If you cross the 183-day threshold, Serbia may tax your pension — though treaties often prevent double taxation.

Serbia has signed over 60 double taxation treaties, including with most EU countries, Canada, Australia, Germany, and many others. These treaties are designed to ensure that income is not taxed twice.

• Pensions: If already taxed in your home country, many treaties allow you to avoid being taxed again in Serbia.

• Government pensions: These are often taxed exclusively in the country of origin.

• Dividends and investment income: Rates and rules depend on the treaty between Serbia and your country.

For American retirees and expats, the absence of a U.S.–Serbia treaty makes planning more complex. You may need to rely on U.S. foreign earned income exclusions and credits, while also meeting Serbian obligations.

Serbia offers a range of tax incentives to attract foreign investment and skilled individuals:

• 10-year corporate tax holiday for companies investing more than €1 million and employing over 100 people.

• Salary tax relief for certain types of employment.

• Research and development deductions for businesses in innovation and technology.

• Free zone benefits, including exemptions and customs advantages.

These programs can significantly reduce tax obligations for foreigners establishing businesses in Serbia.

1. Retirees on Foreign Pensions

Many retirees choose Serbia for its lower tax burden. For example, a German retiree can rely on the Germany–Serbia treaty to ensure their pension is only taxed once. Canadians and Australians benefit from similar protections.

2. U.S. Pensioners

American retirees face a more complex process due to the lack of a treaty. However, by using U.S. tax forms and exclusions, many can avoid double taxation, ensuring they only pay Serbian taxes once residency is established.

3. Digital Nomads

An Australian digital nomad may become a Serbian tax resident after 183 days. By structuring their income through a Serbian branch of their foreign company, they can minimize their total tax burden while enjoying local residency benefits.

4. Foreign Business Owners

Entrepreneurs who open Serbian companies must account for both corporate taxes and their personal tax obligations on dividends or salaries. Structuring income between salary and dividends can create a more favorable outcome.

Serbia’s tax rules are clear in principle but highly dependent on individual circumstances. Whether you’re bringing in pension income, setting up a company, or transferring savings from abroad, the key is aligning your residency status, home country obligations, and Serbian tax law.

Professional guidance ensures you:

• Avoid double taxation.

• Structure business income efficiently.

• File correctly and on time.

• Take advantage of available incentives.

Relocation Serbia works with a highly experienced international tax advisor based in Belgrade who has guided clients from Ireland, Germany, the U.S., Canada, and many other countries.

Serbia offers expats and retirees a relatively low-tax environment compared to many Western countries. With a flat 10% personal tax rate, 15% corporate tax rate, and access to dozens of double taxation treaties, the system can be favorable — provided it is managed correctly.

The key factors are residency status, income source, and treaty protections. Whether you are retiring on a foreign pension, running a business, or investing in Serbia, careful planning ensures compliance while maximizing savings.

Ready to understand how Serbian taxes apply to your specific situation? Book a paid consultation with Relocation Serbia today and let our team connect you with an international tax advisor who will tailor solutions to your needs.