Payments to Tax Haven Jurisdictions

Tax havens are jurisdictions with low or zero tax rates and often without effective exchange of tax information, which is why they are often used for tax avoidance or tax reduction schemes.

In Serbia, payments of income to non-residents from such jurisdictions are subject to a stricter tax regime. Under the Corporate Income Tax Law, the withholding tax rate on income paid to persons from jurisdictions with preferential tax systems is 25%, instead of the standard 20%.

This rule is intended to discourage the use of tax havens and to ensure a fairer tax treatment by preventing erosion of the tax base and profit shifting to low-tax jurisdictions.

In addition, double tax treaties cannot be applied with such states, because Serbia does not conclude such treaties with tax haven jurisdictions.

The list of jurisdictions with preferential tax systems can be found on the websites of the Ministry of Finance and the Serbian Tax Administration.

Examples of jurisdictions on the list include Andorra, Anguilla, Antigua and Barbuda, Aruba, the Bahamas, Bahrain, Barbados, Belize, Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Guernsey, the Isle of Man, Jersey, Liechtenstein, Macau, the Maldives, Mauritius, Monaco, Panama, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, Seychelles, Trinidad and Tobago, Turks and Caicos, Vanuatu and others.