The issue of determining the “arm’s length” interest rate in the Republic of Serbia is regulated by the Corporate Income Tax Law and the Transfer Pricing Rulebook.
In this context, the Corporate Income Tax Law provides that, in addition to the standard methods, a taxpayer has the right, for the purpose of determining the interest rate that would be applied on a loan with a related party under the “arm’s length” principle, to use the interest rate prescribed by the Ministry of Finance.
These interest rates represent a type of “safe harbour rule”, meaning that a taxpayer who applies the interest rate prescribed by the Ministry of Finance does not need to further determine if the calculated interest is in accordance with the “arm’s length principle”, as the interest rate prescribed by the Ministry of Finance is considered an “arm’s length” interest rate.
The Ministry of Finance publishes every year a Rulebook on interest rates that are considered to comply with the arm’s length principle (“Rulebook”).
On 24 April 2026, the Ministry of Finance published the Rulebook for 2026, which came into force on 2 May 2026, and according to Article 2 of the Rulebook, the following interest rates are considered in accordance with the arm’s length principle for 2026:
- For banks and financial leasing providers:
40% for short-term loans in RSD;
33% for long-term loans in RSD;
87% for loans in EUR and RSD loans indexed to EUR;
98% for loans in USD and RSD loans indexed to USD;
05% for loans in CHF and RSD loans indexed to CHF;
12% for loans in SEK and RSD loans indexed to SEK;
50% for loans in GBP and RSD loans indexed to GBP;
73% for loans in RUB and RSD loans indexed to RUB.
- For other business entities:
13% for short-term loans in RSD;
21% for long-term loans in RSD;
75% for short-term loans in EUR and RSD loans indexed to EUR;
42% for long-term loans in EUR and RSD loans indexed to EUR;
10% for long-term loans in CHF and RSD loans indexed to CHF;
43% for long-term loans in USD and RSD loans indexed to USD.
It is important to emphasise that when a taxpayer decides to defend a loan transaction by applying the rates prescribed in the Rulebook, they are required to apply this method to all loans realised in that year.
