Worldwide transfer pricing reference guide 2014

Serbia
Taxing authority and tax law
Tax authority: Serbian Ministry of Finance
Applicable tax legislation:
• Corporate Income Tax Law (CIT Law)
• Rulebook on transfer pricing and methods for the determination of arm’s length prices in intra-group transactions (Rulebook)
Relevant regulations and rulings
Articles 59 through 61a of the CIT Law define the arm’s length principle, the acceptable methods and obligation to prepare and file
transfer pricing documentation. The Rulebook provides further details on these, and also prescribes obligatory content of the transfer
pricing documentation.
OECD Guidelines treatment
Serbian transfer pricing provisions and documentation requirements are generally based on the OECD Guidelines.
Serbian transfer pricing rules do not contain any specific provisions in relation to business restructurings.
Priorities/pricing methods
Taxpayers may choose any of the defined traditional transaction methods (CUP, Cost Plus and Resale Minus) and transactional profit
based methods (TNMM and Profit Split method). There is no priority in the selection of methods.
The taxpayer is also allowed to use any other unspecified method which is reasonable to apply in a given circumstance assuming that the
specified methods cannot be applied.
Transfer pricing penalties
A penalty of approximately EUR20,000 can be imposed if the taxpayer fails to disclose related party transactions in the annual CIT
return or does not prepare and file transfer pricing documentation by the prescribed deadlines.
In addition, the possible adjustment of taxable income on transfer pricing basis may result in penalty of up to 20% of the understated tax
liabilities and may further result in increased interest for late tax payments.
Penalty relief
There is no penalty relief available, however, taxpayers may be permitted an additional period of up to 90 days to comply with transfer
pricing documentary requirements (i.e., to submit to the tax authorities the prescribed transfer pricing document).
Documentation requirements
Starting FY2013 all taxpayers are obliged to prepare transfer pricing documentation that needs to contain mandatory elements and file
it along with the annual CIT return. The prescribed elements of the transfer pricing documentation are:
• Analysis of the group
• Industry analysis
• Functional analysis
• Selection of transfer pricing method
• Conclusions reached
• Appendices
Currently, there is no materiality threshold for transactions or other conditions prescribed which would exclude or limit the general scope
of transfer pricing documentation in particular cases.
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