Capital Gains Taxation in Serbia
In Serbia, capital gains are subject to taxation under the Law on Personal Income Tax ("PIT Law") and the Law on Corporate Income Tax ("CIT Law"). The PIT Law applies to individuals, while the CIT Law applies to legal entities, including companies and other organizations.
Definition of Capital Gains
Capital gains in Serbia are defined as profits realized from the sale or disposal of capital assets. Capital assets include:
- Real estate properties
- Stocks and securities
- Bonds and debentures
- Business assets
- Intellectual property rights
- Other assets as defined by law
Calculation of Taxable Capital Gains
Taxable capital gains are calculated as the difference between the selling price of the asset and its acquisition cost. The acquisition cost includes the original purchase price, any expenses incurred in acquiring the asset, and any improvements made to the asset during ownership.
Tax Rates
Capital gains are taxed at a flat rate of 15% for both individuals and legal entities. However, certain exemptions and deductions may apply, such as:
- Gains from the sale of real estate used as a primary residence are exempt from taxation.
- Gains from the sale of shares in a company that has been held for more than five years are exempt from taxation.
- Gains from the sale of intellectual property rights are taxed at a reduced rate of 10%.
Legal Framework
The taxation of capital gains in Serbia is governed by the following articles of the PIT Law and CIT Law:
- PIT Law: Article 30
- CIT Law: Article 14
These articles outline the definition of capital gains, the methodology for calculating taxable capital gains, and the applicable tax rates.
Policy Objectives
The Serbian government's policy objectives behind the taxation of capital gains are to:
- Generate revenue for the government
- Encourage investment and economic growth
- Promote fairness and equity in the tax system
By taxing capital gains, the government aims to ensure that individuals and businesses contribute their fair share of tax on profits realized from investments and asset disposals.
If delving into the depths of Serbian tax rules and regulations isn't your style, and you'd rather have experts take the reins, then Heavnn is here to help.
Let us simplify your tax planning journey. Access Heavnn's blend of professional expertise and cutting-edge technology by clicking the button below.
