VAT

Film production firms are eligible for VAT rebates for locally purchased commodities and services used for international production. This includes equipment rental, components and commodities of set and costume design, legal, accounting and other services. VAT in Serbia is 20%. Upon request to the Tax Office, the refund is executed within 45 days, or within 15 days for taxpayers who mainly perform supply of goods abroad (qualified exporters), upon the expiry of the time limit for submission of the VAT returns, or starting from the day of presentation of request for VAT refund.
Hotels and catering are subject to a lower 10% rate. Furthermore, the 10% on accommodations can be deducted from VAT tax base, in case accommodation is registered predominant activity. Many technical staff are self-employed and registered as small companies. Since many are small firms, their annual turnover exempts them from paying any VAT so procuring their services is tax free. Overall, Serbia has among the lowest tax rates in the region including Corporate Profit Tax of 15% which is below European average of 20.6 percent and North American 33 percent and Personal Income Tax 10%. Creative inputs related to Set and Costume design that are contracted through Intellectual Property agreements are also eligible for reductions to the taxable base. This includes 60% deductions for labor related to creative input on textile (costume designers), and 50% of labor for production design, painting, production of models and dummies, visual communication, interior design, landscape architecture, set design, music composing, acting, singing, playing music, and film making.