Amendments to the Corporate Income Tax Law are adopted

The National Assembly of the Republic of Serbia has adopted the Law on Amendments to the Corporate Income Tax Law (Law), published in the “Official Gazette of the Republic of Serbia”, No. 80/2026 of 31 August 2026.

The Law entered into force on 8 September 2026 and applies as of 1 January 2027, except where otherwise indicated below.

These are the key novelties that we consider particularly important for business.

Tax incentives and alignment with EU State aid rules

1)     Investment in fixed assets and employment incentive (Article 50a)

This incentive is abolished; however:

• Taxpayers who meet the conditions by 31 December 2027 (or by the end of the tax period starting in 2027) may continue to use the incentive until the expiry of the prescribed period, under the “old” rules.
• This amendment applies as of 1 January 2028.

2)     Concessions and private partners

• The exemption for concession grantors on income from the transfer of non‑monetary assets without consideration by private partners is abolished.
• The exemption for private partners on capital gains from the transfer of immovable property to the concession grantor is abolished.

3)     Companies employing persons with disabilities

The corporate income tax exemption for these companies will be used in accordance with State aid regulations.

By‑laws will further regulate the manner of exercising the right to this exemption.

4)     Incentive for newly established innovative companies (Article 50j)

The incentive for newly established companies performing innovative activities is abolished; however:

• Taxpayers who meet the conditions by 31 December 2026 (or by the end of the tax period starting in 2026) may continue to use the incentive until the expiry of the prescribed period, under the “old” rules.

Withholding tax on purchase of secondary raw materials

The obligation to withhold and pay withholding tax on the purchase of secondary raw materials is abolished as of 1 January 2027.

This change simplifies business operations for sectors engaged in recycling and trade of secondary raw materials

Alignment of Serbian tax rules with EU Tax Directives

A set of provisions introduced by the Law ensures alignment with the following EU tax directives:

1. Merger Directive – The purpose of the introduced provisions is to facilitate cross-border reorganizations of companies operating in two or more EU Member States.
2. Interest and Royalties Directive – The purpose of the introduced provisions is to provide an exemption from withholding tax on interest and royalty payments between related parties within the EU.
3. Parent-Subsidiary Directive – The purpose of the introduced provisions is to provide an exemption from withholding tax on dividends between related parties, as well as to eliminate double taxation at the level of the parent company.
4. Anti-Tax Avoidance Directive – The purpose of the introduced provisions is to prevent from aggressive tax planning through five mechanisms: interest limitation rules, exit taxation, controlled foreign company (CFC) rules, prevention of hybrid mismatches, and a general anti-abuse rule.

These provisions aligning Serbian tax provisions with EU tax directives will apply only as of the date of Serbia’s accession to the European Union.