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Tax Alert, March 2017

Rulebook on “arm’s length” interest rates on intercompany loans 

Rulebook on “arm’s length” interest rates on intercompany loans

Pursuant to Article 61, para 3 of the Corporate Income Tax Law (Official Gazette RS no 25/01, 80/02, 80/02 – oth. law, 43/03, 84/04, 18/10, 101/11,119/12, 47/13, 108/13, 68/14 – oth. law, 142/14, 91/15 – authentic interpretation and 112/15), the Ministry of Finance has adopted the Rulebook on interest rates for 2017 that are considered to be at “arm’s length”.

The Rulebook prescribes the following “arm’s length” interest rates for credits, i.e. loans between related parties:

BANKS AND FINANCIAL LEASING ENTITIES

  • 3,17% - short term loans in RSD;
  • 4,38% - long term loans in RSD
  • 3,13% - loans in EUR and dinar loans denominated in EUR;
  • 4,20% - loans in USD and dinar loans denominated in USD;
  • 1,34% - loans in CHF and dinar loans denominated in CHF;
  • 3,63% - loans in SEK and dinar loans denominated in SEK;
  • 1,15% - loans in GBP and dinar loans denominated in GBP;
  • 3,30% - loans in RUB and dinar loans denominated in RUB;

OTHER LEGAL ENTITIES

  • 6,46% - short term loans in RSD;
  • 6,39% - long term loans in RSD;
  • 3,98% - short term loans in EUR and dinar loans denominated in EUR;
  • 4,25% - long term loans in EUR and dinar loans denominated in EUR;
  • 7,08% - long term loans in CHF and dinar loans denominated in CHF;
  • 4,61% - short term loans in USD and dinar loans denominated in USD;
  • 5,72% - long term loans in USD and dinar loans denominated in USD;

This Rulebook will enter into force on the eight day following its publication in the "Official Gazette of the Republic of Serbia".

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