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Tax Alert - March 2015

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Rulebook on “arm’s length” interest rates on intercompany loans (Official Gazette RS no. 23/2015)

Pursuant to Article 61, para 3 of the Corporate Income Tax Law (Official Gazette RS no 23/2015), the Ministry of Finance has adopted the Rulebook on interest rates for 2014 that are considered to be “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

  •  7,14% - short term loans in RSD;
  •  4,39% - loans in EUR and dinar loans denominated in EUR;
  •  3,12% - loans in USD and dinar loans denominated in USD;
  •  5,86% - loans in CHF and dinar loans denominated in CHF;
  •  4,42% - loans in SEK and dinar loans denominated in SEK;
  • 13,00% - loans in RUB and dinar loans denominated in RUB;

 

OTHER LEGAL ENTITIES

  •  13,82% - short term loans in RSD;
  •  11,12% - long term loans in RSD;
  •  6,57% - short term loans in EUR and dinar loans denominated in EUR;
  •  5,79% - long term loans in EUR and dinar loans denominated in EUR;
  •  8,49% - short term loans in CHF and dinar loans denominated in CHF;
  •  7,07% - long term loans in CHF and dinar loans denominated in CHF;
  •  5,28% - short term loans in USD and dinar loans in denominated in USD;
  •  5,74% - long term loans in USD and dinar loans denominated in USD.

 

Note that a taxpayer is entitled to determine “arm’s length” interest rate on loans, i.e. credits between related parties, by applying general transfer pricing rules, instead of applying the above mentioned interest rates.  

Contacts:

Tamara Dmitrovic

Senior Manager

+381 11 3812 163

tdmitrovic@deloittece.com  

 

Filip Kovacevic

Manager

+381 11 3812 164

fkovacevic@deloittece.com

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