On 28 February 2025, the Serbian Ministry of Finance published the Regulation on Interest Rates Considered to Be in Line with the Arm’s Length Principle for the year 2025 in the Official Gazette No. 17/2025. The regulation came into force on 8 March 2025 and outlines the applicable interest rates for related-party financing transactions, offering taxpayers two methodologies for ensuring compliance with transfer pricing rules.
Application of the Regulation
Under Article 61 of the Corporate Income Tax Law, taxpayers may choose between two methods when determining interest rates for related-party loans:
- Apply the fixed interest rates prescribed by the Ministry of Finance, or
- Use general transfer pricing principles and conduct a benchmarking analysis.
The chosen approach must be applied consistently across all relevant transactions throughout the fiscal year.
Prescribed Interest Rates for 2025
The Ministry distinguishes between financial institutions and other business entities.
For banks and financial leasing providers, the regulation introduces unified interest rates, with minor exceptions for RSD-denominated loans based on loan term. For all other businesses, interest rates vary based on the currency and maturity of the loan.
Examples include:
- For non-financial entities: 8.01% on short-term RSD loans and 6.79% on long-term EUR loans.
- For banks: 4.59% on EUR loans and 3.92% on short-term RSD loans.
These rates are intended to simplify compliance while aligning with the arm’s length principle.
Eurofast’s Take
With increased scrutiny on related-party transactions, it is essential for taxpayers to carefully select and apply the appropriate methodology when preparing transfer pricing documentation.
Eurofast Serbia assists clients in:
- Evaluating whether to apply the fixed rates or perform an economic analysis
- Preparing or updating local file documentation
- Ensuring consistency with Serbian and international transfer pricing frameworks
Proactive planning ensures audit-readiness and reduces the risk of tax adjustments.
For further queries contact us at [email protected]