Page 55 - Central and Eastern European Transfer Pricing Review

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Serbia

KPMG's Views on Transfer Pricing in Serbia

Transfer pricing rules have been present for more than a decade in Serbian
corporate income tax (CIT) legislation, but specifc and detailed regulations
on the application of these rules have never been published by the Ministry of
Finance. However, it is our recommendation that due diligence should be taken
with respect to the transfer pricing rules stipulated in the CIT Law (even though
they are not applied in practice) since the tax authorities may change their current
practice even retroactively. In addition, new transfer pricing rules introduced as of
2013 further increase the transfer pricing risk.

Basic information These tests are applied to both direct and The Ministry of Finance is expected
indirect ownership. to publish a list of jurisdictions with a
Tax authority name preferential tax system during 2013.
Tax Administration of Serbia. Furthermore, companies are deemed to
be related if the same persons directly or What is the statute of limitations
Citation for transfer pricing rules indirectly participate in the management, on assessment of transfer pricing
ownership or control of both companies
Articles 59, 60, 61 and 61a of the CIT adjustments?
Law. in the manner described above. The right of the Tax Administration to
Members of the immediate family of assess a tax liability is limited to 5 years
Effective date of transfer pricing shareholders who own at least 25 percent from the day when the period of limitation
rules of shares or hold at least 25 percent of commenced. The period commences as
Rules have been present since 1 July voting rights are also deemed as related of 1 January of the year following the year
2001, while the latest amendments parties. when the tax liability became due. The
came into force on 1 January 2013. absolute period of limitation is 10 years.
Our comments relate to the latest In addition, any company which is
amendments and rules in force from a resident of a jurisdiction with a There is no special statute of limitations
1 January 2013. preferential tax system is deemed on assessment of transfer pricing
to be a related party regardless of adjustments.
What is the relationship threshold the percentage of direct or indirect
for transfer pricing rules to apply ownership or voting rights in a Serbian Transfer pricing
between parties? company. disclosure overview
An entity is deemed a related party A jurisdiction with a preferential tax
if it has the possibility of control or system exists if the relevant regulations Are disclosures related to transfer
considerable infuence on the business allow for a signifcant reduction in income pricing required to be prepared or
decisions made. and dividend taxation when compared submitted to the revenue authority
on an annual basis (e.g. with the tax
Ownership of at least 25 percent of the to Serbian regulations. A territory return)?
shares in the capital is considered as the also qualifes as a jurisdiction with a Yes, a taxpayer is obliged to prepare
possibility of control. preferential tax system if its regulations
do not allow or impede obtaining and submit documentation presenting
Possessing at least 25 percent of the information on ownership or other data related party transactions at both transfer
voting rights is considered as having relevant for resolving taxation issues. and arms length prices along with their
an infuence on business decisions. annual tax return.

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