Rental Income Tax in Serbia
Income from renting property (rent/kirija) in Serbia is taxed as property income under the Personal Income Tax Act (Official Gazette RS 24/01). The effective tax rate is lower than the nominal rate thanks to notional expense deductions that reduce the tax base.
Tax rate and notional expenses
The tax on property rental income in Serbia is 20% on the tax base. The tax base is the rental income reduced by 25% notional expenses. The effective tax rate is therefore 15% of gross rental income (20% × 75% = 15%). For example, a monthly rent of 60,000 RSD × 75% = 45,000 RSD tax base × 20% = 9,000 RSD tax (effectively 15% of 60,000 RSD). In addition to tax, pension and health insurance contributions are payable if the landlord is not covered under another insurance basis.
Reporting obligation and tax payment
Every landlord must declare rental income to the Serbian Tax Administration. Returns are filed via form PP OPO (lump-sum tax) or the annual PPDG-1S form for income not subject to lump-sum taxation. Tax is paid as an advance – quarterly, by the 15th of the first month following the end of the quarter. The lease agreement should be notarised and registered with the real estate cadastre or court.
Short-term tourist rental and special cases
Income from short-term rentals (Airbnb, Booking) in Serbia is taxed the same way as long-term rentals – 20% on 75% of income. If the landlord is registered as an entrepreneur with the APR (Business Registers Agency), income from business activities tax may apply. The Serbian Tax Administration increasingly cooperates with digital platforms to register rental income.
Frequently Asked Questions
How is the effective rental income tax rate calculated in Serbia?
The nominal tax rate on property income is 20%, but it is applied to a tax base equal to the income reduced by 25% notional expenses. This means: 20% × 75% = effective 15% of total rental income.
Do I need to pay social contributions on rental income in Serbia?
Yes, if the rental income is not covered by contributions paid under an employment relationship or other business status. Pension insurance (25.5%) and health insurance (10.3%) contributions are payable on rental income subject to the 25% notional expense deduction.
Do I need to declare a rental contract to the Serbian Tax Administration?
Yes. The law requires rental income to be declared. The Tax Administration increasingly monitors rental income, including short-term tourist rentals via digital platforms. Failure to declare income is subject to financial penalties.