2 Legal & Tax FAQ For IT Industry

How Information Technology (IT) and Software Development is regulated in Serbia

Information Technology (IT) and software development in Serbia are regulated by several laws and regulations. Some of the key regulations governing the IT industry in Serbia include:

The Law on Information Security: This law governs the protection of information and communication systems from unauthorized access, use, and disclosure.

The Law on Electronic Document, Electronic Identification and Trust Services in Electronic Business: This law regulates the use of electronic documents and electronic identification in electronic business transactions.

The Law on Personal Data Protection: This law governs the processing of personal data in Serbia and ensures that the rights and freedoms of individuals are protected.

The Law on Copyright and Related Rights: This law governs the protection of intellectual property rights related to software and other IT-related products.

The Law on Telecommunications: This law regulates the telecommunications sector in Serbia, including the provision of internet and other communication services.

In addition to these laws, the IT industry in Serbia is also subject to various standards and regulations related to cybersecurity, data protection, and quality assurance. The Serbian government has also implemented several initiatives to promote the development of the IT industry, such as the establishment of technology parks and investment incentives for IT companies.

What taxation is applicable for IT businesses in Serbia

In Serbia, IT businesses are subject to several taxes, including corporate income tax, value-added tax (VAT), and personal income tax.

Corporate Income Tax: The standard corporate income tax rate in Serbia is 15%. IT companies that have a registered office or permanent establishment in Serbia are subject to this tax on their profits.

Value-Added Tax (VAT): The standard VAT rate in Serbia is 20%. IT companies that provide goods or services subject to VAT are required to register for VAT and charge their customers VAT on their sales. However, certain IT services may be exempt from VAT in Serbia, such as software development services, provided that the recipient of the service is outside of Serbia.

Personal Income Tax: Employees of IT companies in Serbia are subject to personal income tax, which is progressive and ranges from 10% to 25%. The tax rate depends on the level of the employee’s income.

In addition to these taxes, IT companies in Serbia may also be subject to other taxes and contributions, such as social security contributions and local taxes.

It’s worth noting that Serbia has several tax incentives for IT businesses, such as a reduced corporate income tax rate of 3% for IT companies that meet certain conditions, such as investing in research and development or employing a certain number of people in the sector.

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