Several IT companies are considering partially or completely withdrawing from the Serbian market following the cancellation of incentives for newly settled employees, the Serbian IT Association (SITA) announced. Four weeks after the incentives were abolished, despite multiple official letters sent to relevant authorities, no dialogue with the IT sector has been initiated.
SITA, representing over 20 technology firms with a combined annual turnover exceeding €375 million—of which more than €290 million comes from IT service exports—expressed deep concern over the lack of institutional response.
Despite warnings about potential negative consequences, the authorities have neither explained the decision nor proposed solutions to help companies adjust their operations. As a result, several IT firms are reconsidering their strategic plans and may reduce or end their presence in Serbia.
The Association emphasized that over the past three years, the incentive regulation was crucial in establishing Serbia as an attractive destination for IT companies, especially amid global relocation trends driven by geopolitical instability.
These incentives made Serbia competitive compared to other countries actively attracting IT firms, such as Portugal, Turkey, the UAE, Romania, and neighboring countries.
SITA’s analysis shows that the repealed regulation delivered tangible benefits to both the Serbian budget and the domestic economy. About two-thirds of all tax revenues remained in the national budget, while one-third was allocated as incentives. This approach was not a fiscal burden but a tool to expand the tax base and enhance market competitiveness.
Besides direct income from taxes on income, profit, property, and VAT, the incentives helped employ highly skilled professionals, boost IT service exports, transfer knowledge, and strengthen domestic teams.
SITA also noted that this incentive was only one part of the broader tax framework affecting the IT industry. The organization calls for a comprehensive review of tax policies applicable to both domestic and foreign IT companies to ensure predictability, competitiveness, and long-term sector stability.
The Association urged the Serbian Government to urgently engage in dialogue with the industry and establish a transitional solution. Without this, there is a serious risk that years of investment attraction and technological ecosystem development could suffer lasting damage.
