Corporate - Other issues

Last reviewed - 21 April 2023

United States (US) Foreign Account Tax Compliance Act (FATCA)

FATCA is a set of regulations of the United States adopted in order to combat tax evasion. It requires that foreign financial institutions or other financial intermediaries participate in preventing tax evasion by reporting (i.e. providing) information concerning US 'account holders', which include bank account holders, investors, and shareholders, to the US Internal Revenue Service (IRS).

The Republic of Serbia and the United States have begun active cooperation in relation to the implementation of FATCA regulation as of 2014. In accordance with the above-mentioned cooperation, as of 30 June 2014, Serbia has been treated as a jurisdiction with an 'agreement in substance' on the terms of an intergovernmental agreement (IGA), that is the United States had treated Serbia as the jurisdiction in which the Agreement was in force.

As a result of the cooperation, on 10 April 2019, the government of the Republic of Serbia and the United States signed an IGA to implement FATCA regulation.

In accordance with the information available on the US Department of Treasury’s official website, Serbia signed a Model 1 IGA to implement FATCA. Draft of the Model 1 can be found on the above-mentioned website. The official text of the Agreement is not yet published in Serbian.

In the upcoming period, the ratification of the Agreement and its adoption by Parliament will be expected.

Multilateral instrument (MLI)

On 5 June 2018, Serbia deposited its ratification instrument for the Organisation for Economic Co-operation and Development (OECD) Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting ('Multilateral instrument' or 'MLI').

The MLI enables jurisdictions to swiftly implement the results of the BEPS project into bilateral tax treaties worldwide. It modifies the application of thousands bilateral tax treaties concluded to eliminate double taxation.

Serbia is the sixth jurisdiction to deposit its ratification instrument after Austria, the Isle of Man, Jersey, Poland, and Slovenia. The MLI entered into force on 1 October 2018 for Serbia.

Global Forum on Transparency and Exchange of Information for Tax Purposes

Serbia joined the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes in March 2018, thus committing to implement the standard of transparency and exchange of information in international tax affairs.