Tax incentive for legal entities conducting research and development aims to encourage employment and investment in R&D activities by an employer – a legal entity that carries out research and development within its business operations on the territory of the Republic.

Research is considered original or planned investigation undertaken with the aim of acquiring new scientific or technical knowledge and understanding.
Development is considered the application of research results or the application of other scientific achievements or design to create new or significantly improved materials, devices, products, processes, systems, or services before they are put into commercial production or use.

Profitable Innovation: Intellectual Property Protection with Tax Incentives:

• Double Deduction for R&D Costs: Expenses for research and development carried out in Serbia can be deducted at double value when calculating the tax base, significantly reducing taxes. Legal Basis: Corporate Income Tax Law, Article 22g.*

• IP Box Regime: Income from intellectual property (patents, software, inventions) is taxed at an effective rate of 3% by excluding 80% of income from the tax base. Legal Basis: Corporate Income Tax Law, Article 25b.*

Combination of Incentives: Companies can use both the R&D deduction and the IP Box regime simultaneously, allowing maximum tax optimization while investing in research, development, and intellectual property protection (It is allowed to combine the “IP Box” and “R&D deduction” tax incentives, effectively reducing the corporate income tax to 0%).

• Investment in Startups: An investor who makes an investment in the capital of a newly established company engaged in innovative activities (startup) may reduce their tax liability through a tax credit amounting to 30% of the investment made. Legal basis: Corporate Income Tax Law, Article 50j*.

* Law on Personal Income Tax

Law on Contributions to Compulsory Social Insurance

Law on Corporate Income Tax

Rulebook on the Conditions and Procedure for Exercising the Right to Tax Exemption Based on the Salaries of Employees in Research and Development (Official Gazette of the Republic of Serbia, No. 48/22)

Rulebook on the Conditions and Procedure for Exercising the Right to Recognition of Expenses Directly Related to Research and Development in the Tax Balance Sheet at Double the Amount (Official Gazette of the Republic of Serbia, No. 50/19)

Rulebook on the Tax Return for Withholding Tax (Official Gazette of the Republic of Serbia, Nos. 74/13, 118/13, 66/14, 71/14 – correction, 14/16, 21/17, 20/18, 104/18, 96/19, 132/21)

Ministry of Finance of the Republic of Serbia - Tax Administration 

Catalogue of services 

Tax informants