Serbia has a developed economy and is considered the 85th best in the world in terms of purchasing power parity. Since becoming independent in 2006, the liberalization of its economic policies has seen rapid growth across the economy.
In 2014, its estimated GDP was 42.65 billion USD or 12,500 USD per capita. This GDP is split between the service economy (55%), industry (37%), and agriculture (8%). In recent years Serbia has encouraged foreign investment in its economy, with a number of corporations doing so.
Serbia’s main industries and export products include automobiles, electrical machinery, food processing, pharmaceuticals, and clothing. Despite the economic growth, however, the unemployment rate was at 26% in 2014.
In Serbia, tax residents are required to pay income tax on their worldwide income, whereas fiscal nonresidents are required to pay income tax on their Serbian income. You will be regarded as tax resident providing that you live permanently in Serbia, or you live there for more than 183 days in a twelve month period, or if your vital economic interests are based in the country.
The personal income tax rates are
Those earning below these amounts do not have to pay income tax on their earnings. The income tax thresholds are modified yearly in accordance of the fluctuation of the average salary in Serbia.
Taxable income for those working in Serbia includes employment income, capital gains, royalties, and income from immovable property. Like in most other countries, your employer will take your income tax at source and pay it directly to the government. Taxation is overseen by the Republic of Serbia Ministry of Finance.
For an expatriate working in Serbia, a valid work permit is required. These are issued by the government for a specific period of time, usually between three and twelve months, depending on your contract and the nature of your employment. There are four steps to gaining a permit to work in Serbia:
On average, it takes around two days to complete the application process and receive your work permit.
However, Serbia is currently in negotiations of becoming an EU member state, which means that, in the future, EU citizens may not need a work permit when moving to Serbia.