The transfer of money between Serbia and other countries is regulated by the Law on Foreign Trade Operations and the Law on Foreign Exchange Operations. The former covers the circulation of goods and services between domestic and foreign entities, while the latter specifies conditions for transferring money between residents and non-residents.
Transactions fall into two categories: current affairs and capital affairs. Current affairs include regular business transactions, such as payments for imports, employee salaries, and reimbursements. These transactions are generally free unless restricted by law. Capital affairs involve long-term investments, such as buying shares or investing in real estate. These transactions are generally allowed but are subject to special procedures, particularly when purchasing over 10% of a company’s capital.
Certain restrictions apply, including measures to prevent money laundering and terrorist financing. Banks must report suspicious transactions and may block transfers if illegal activities are suspected. Additionally, Serbia adheres to international sanctions, restricting transactions with specific countries, companies, or individuals.
The National Bank of Serbia sets guidelines for payments abroad, including a codebook for categorizing transactions. This ensures compliance with regulations and proper monitoring.
Regarding tax treatment, Serbian companies paying dividends to non-resident individuals, such as those residing in Germany, must apply a 15% withholding tax on the dividends, according to the Law on Personal Income Tax. Serbia and Germany have a Double Taxation Avoidance Agreement, which limits the tax rate to 15% on dividends paid to German residents. After withholding the tax, the net dividend amount is transferred to the recipient. If the recipient pays taxes in Germany, they can use the Serbian tax paid as a credit to avoid double taxation.
Serbian companies paying dividends must check the recipient’s residency, withhold and pay the tax to the Serbian Tax Administration, and file a report with the Tax Administration.
