Tax Incentive Information
Regulation regarding financial incentives for investors to produce audio-visual works in the Republic of Serbia came into effect on 10/08/2019. In accordance with the Regulation, the incentives are allocated to the investor as non-refundable, via a 25% refund for qualified expenses incurred in the Republic of Serbia, with the aim of incentivizing economic activity related to audio-visual production through increasing job opportunities and promoting the potential of the Republic of Serbia in this industry, that is, its infrastructural, production and service capacities.
Exceptionally, provided that for realization of audiovisual work in the Republic of Serbia spent is more than EUR 5.000.000, incentives are allocated in the amount of 30% of eligible costs, all in accordance with the independent auditor’s report on the production costs of the audiovisual work in the Republic of Serbia.
The applications should be submitted to the Film Center Serbia.
Applicants must be a legal entity registered in Serbia and which is responsible for paying all relevant Serbian taxes for the production.
- MINIMUM LOCAL SPEND
Feature films, TV films and TV series: 300.000 EUR (~$350.000), with 100.000 EUR minimum per episode for TV series
Animated film, audio and/or visual post-production: 150.000 EUR (~$170.000)
Special-purpose film/TV Commercials: 100.000 EUR (~$114.000)
Documentary films: 50.000 EUR (~$57.000)
-Feature film, TV film, feature-length documentary film and animated film intended for broadcasting, that last at least 70 minutes
-TV series containing at least three episodes not shorter than 40 minutes;
-Documentary programmes not shorter that 40 minutes
-Post-production or VFX for any of the abovementioned formats
- QUALIFYING SERBIAN EXPENDITURE
The following are considered Qualifying Expenditure towards the incentive:
-Costs pertaining to the production of an audiovisual work that have occurred and that have been disbursed to legal or natural entities in the territory of the Republic of Serbia. These include purchased goods and provided services, use of locations, crew payments and royalties to individuals who are residents of the Republic of Serbia or to foreigners who are legally residing for at least a year in the territory of the Republic of Serbia, in accordance with the regulations of the Republic of Serbia;
-Incurred costs pertaining to the use of goods, ie. leasing of movables and immovables may be recognised only if the goods, and/or movables and immovables, are the property of legal or natural entities, in the territory of the Republic of Serbia;
-The eligible costs include gross sums where there are social benefits, insurance, authorship or other types of taxes included in the calculation of costs.
- NON-QUALIFYING EXPENDITURE
The following costs do not qualify for the incentive:
- Marketing costs, costs related to real estate purchase, distribution costs;
- Types and content of Qualifying and Non-qualifying Expenditure are prescribed in more detail in the Guidelines for the incentive programme and Eligible costs specification, that can be downloaded bellow.
- FUNDING AND CAPS
There is no cap per project. Every year the Serbian government will allocate funds for the incentive programme. The budget allocated for 2019 is 900.000 million dinars (EUR 7,5 million or $8,7 million). Projects that surpass amount of annual budget allocated for this fiscal year may be transferred into the next year.
The call for applications is open all year. The applicant must be a Serbian registered company acting on behalf of the investor in the project or SPV company setup for the production in Serbia. The entity applies for the incentive programme to the government organization Film Center Serbia, providing an estimated budget, a production schedule together with a completed application form and other required documents (see list below).
The application can be submitted anytime in the course of the production in question.
Decision and Contracting
The Committee will review the application documents and if approved, the Ministry of Economy will sign a contract with the applicant.
Request for Final Payment
Within 45 days from the completion of production the applicant needs to conduct an independent audit and submit a Request for Payment. The Committee will process the request confirming that audit report, production reports and financial information are valid. The rebate amount will be released within 60 days of the Committee final approval to a designated Treasury account accessible by the Aplicant.
- BUNDLE OR SLATE OF PROJECTS
Projects are not allowed to bundle, except in case of TV commercials where investor is allowed to bundle projects with an incentive pay-out cap of maximum 800.000 EUR in a period of 3 years. In another words investor in TVCs has a ceiling of 3,2 million EUR for local expenditure within 3 years.
Serbia has a general VAT rate of 20% on all goods and services, except hotels and other accommodation, basic food groups, utility services use reduced VAT rate of 10%.
VAT is NOT considered qualified Serbian spend.