US tax obligations when you move to Serbia: no treaty, the FEIE, FBAR and what you still owe in 2026

Relocation Serbia handles the Serbian side for American clients — residency, company formation, tax registration, bookkeeping and annual filing — and works alongside US-qualified expat tax advisers on the American side. This guide explains what actually applies to a US citizen living in Serbia in 2026: the treaty gap, the exclusions and credits, the Serbian taxes, the reporting rules, the trap of owning a Serbian company, and the moments when you need a specialist rather than a blog.

Is there a US–Serbia tax treaty?

No. The United States has no income tax treaty with Serbia, and no totalization agreement covering social security. Two things follow. First, there is no treaty mechanism to allocate taxing rights or to override either country's rules — you rely entirely on the US domestic reliefs (the exclusion and the credit) and on Serbia's own rules. Second, self-employed Americans can be liable for social contributions in both countries at once. What does exist is a FATCA intergovernmental agreement, signed in 2019, under which Serbian banks identify and report US account holders — so your Serbian accounts are visible to the IRS even though Serbia is outside the OECD's CRS system (see banks in Serbia for foreigners).

What you still owe the IRS after moving

The US is one of only two countries that tax on citizenship rather than residence. As long as you hold a US passport (or a green card), you file a US federal return every year, report worldwide income, and disclose foreign accounts and assets — regardless of Serbian residency, days spent in Belgrade, or taxes paid to Serbia. The reliefs below reduce what you pay; none of them removes the duty to file.

The Foreign Earned Income Exclusion in 2025 and 2026

The FEIE lets a qualifying American exclude foreign earned income — salary, wages, self-employment income for work physically performed outside the US — from US income tax.

A married couple where both spouses qualify can each claim the full amount. The exclusion is claimed on Form 2555 with your return; the short-form 2555-EZ no longer exists.

Who qualifies

• Physical presence test: at least 330 full days outside the US in any 12-month period — the period can straddle calendar years, which is why first-year movers often still qualify.
• Bona fide residence test: genuine residence in Serbia for a period including a full calendar year, shown by things like a residence permit, a lease, local accounts and family life. If you tell Serbia you are a non-resident, you cannot claim to be a bona fide resident of Serbia for this test.

What the FEIE does not cover

Dividends, interest, capital gains, rental income, pensions, Social Security, 401(k) and IRA withdrawals. All of that remains taxable in the US wherever you live — and Serbia taxes investment income at 15% for residents, so it is not tax-free in either country.

Foreign Tax Credit: when it beats the exclusion

The Foreign Tax Credit gives a dollar-for-dollar credit for income tax paid to Serbia. It applies where the FEIE cannot — investment income, rental income, earnings above the exclusion limit — and it is calculated in separate "baskets", so Serbian tax on one kind of income cannot always offset US tax on another. Because Serbia's rates are lower than US rates on comparable income, the credit usually reduces but does not eliminate US tax on unsheltered income.

The choice between exclusion and credit is structural: revoking the FEIE to switch to a pure credit strategy generally locks you out of the exclusion for five years. That decision belongs with a US adviser who has your full income picture, not with a rule of thumb.

The self-employment tax trap

The FEIE reduces US income tax. It does nothing to US self-employment tax, which is 15.3% of net self-employment earnings (12.4% Social Security plus 2.9% Medicare) wherever you live. A freelancer in Belgrade who excludes $130,000 of income under the FEIE still owes roughly $19,000 in self-employment tax — and, with no totalization agreement, may also owe Serbian social contributions on the same activity. How you are structured in Serbia (employee of your own company, entrepreneur, contractor) changes this outcome materially, which is why the structure should be designed with both tax systems in view before you register anything.

The Serbian side: what Serbia taxes once you live here

• Tax residency (separate from your residence permit): you become a Serbian tax resident by spending 183 days or more in Serbia in any 12-month period, or by having your home or centre of vital interests here. Residents are taxed on worldwide income.
• Employment and most other income: a flat 10%, plus social contributions on employment income. High earners also pay an annual supplementary income tax on total income above a threshold set each year (10% and 15% bands).
• Dividends, interest and capital gains: 15%.
• Company profit (d.o.o.): 15% corporate tax, then 15% on dividends paid out.
• Newly settled taxpayer incentive: qualifying newly arrived professionals can have their employment tax base and contributions reduced by 70% for five years.
• No wealth tax, no CRS reporting — but, as above, FATCA reporting does apply to US persons.

The full Serbian picture — rates, contributions, the incentive and how to structure income — is in our Serbia tax guide for expats; the compliance service behind it is tax and bookkeeping for foreigners in Serbia.

Reporting duties: FBAR and Form 8938

FBAR (FinCEN Form 114)

If the combined value of your foreign financial accounts — including the Serbian bank account you will need — exceeds $10,000 at any moment in the year, you file an FBAR electronically with FinCEN, separately from your tax return, by April 15 with an automatic extension to October 15. It is a report, not a tax, and the penalties are severe and inflation-adjusted: currently over $16,000 per non-wilful violation, and for wilful violations the greater of roughly $165,000 or 50% of the account balance. Never having filed means the clock on those penalties never starts running.

Form 8938 (FATCA)

Americans living abroad file Form 8938 with their return once specified foreign assets exceed $200,000 at year-end or $300,000 at any time (single), or $400,000 / $600,000 (married filing jointly). It covers more than bank accounts — including interests in foreign companies — and it does not replace the FBAR; many expats must file both.

Owning a Serbian company as a US person

A Serbian d.o.o. is often the right vehicle for residency and business — 15% corporate tax, a salary that can use the newly-settled incentive, clean invoicing to foreign clients. But a US person who owns 10% or more of a foreign company falls under US anti-deferral rules: Subpart F can tax certain company income in your hands the year it is earned, and the regime formerly called GILTI — renamed net CFC tested income under the 2025 tax law — can pull most of a services company's profit into your personal US return every year, dividend or no dividend. Elections exist (such as the section 962 election) that can make the structure work, but only if the company is set up with them in mind. Setting up a d.o.o. because "Serbia is 15%" without a US analysis is the single most expensive mistake we see American founders make.

State taxes: the obligation many Americans forget

Federal is not the whole story. A handful of states — California most aggressively, plus Virginia, New Mexico and South Carolina among others — keep asserting residency over people who move abroad unless domicile is clearly severed: voter registration, driving licence, addresses on every financial and professional record. Do it before you leave. Movers from states with no income tax (Florida, Texas, Washington, Nevada, Wyoming, South Dakota, Tennessee, New Hampshire) have nothing to unwind.

Deadlines for Americans in Serbia

What changed for 2025 and 2026

• FEIE: $130,000 (2025) and $132,900 (2026).
• 2025 US tax law (the "One Big Beautiful Bill"): the 2017 rate cuts and higher standard deduction are now permanent; the child tax credit is $2,200 per child — but claiming the FEIE removes the refundable part of that credit, a real trade-off for families abroad.
• 1% remittance excise tax from 1 January 2026: it applies to transfers funded with cash, money orders or similar physical instruments; transfers from a US bank account or US-issued card are not covered. Most Serbia-bound transfers by Americans are bank-funded and unaffected — confirm with your provider.
• GILTI renamed: the CFC regime now runs under the "net CFC tested income" rules for tax years from 2026; the mechanics for a small Serbian company are similar, the numbers slightly different.

Common mistakes Americans make with tax in Serbia

• Assuming the FEIE covers everything. It covers earned income only; pensions, dividends and rent stay taxable.
• Forgetting self-employment tax. Zero income tax does not mean zero US tax.
• Skipping the FBAR because "it's just a checking account". The threshold is $10,000 across all accounts, at any point in the year.
• Opening a d.o.o. first and asking a US adviser second. CFC rules do not care that Serbia's rate is 15%.
• Leaving a sticky state without severing domicile.
• Claiming to be a Serbian non-resident to Serbia and a bona fide Serbian resident to the IRS. Pick one story; both governments read your file.

Written by the Relocation Serbia team. Last reviewed: September 2026. General educational information, not US or Serbian tax advice. Relocation Serbia does not prepare US tax returns; US figures are taken from IRS inflation adjustments and 2025 legislation as published, and must be confirmed with a US-qualified expat tax professional for your own situation.