Serbian CPT law does not explicitly regulate the content of transfer pricing documentation. However, the law stipulates which transfer pricing methods may be applied, as well as imposing the obligation to declare transactions between associated persons in the tax statement, and to provide the documentation with the tax statement. In addition to the obligation to maintain transfer pricing documentation, the taxpayer has a general obligation to maintain business documentation that is relevant for tax purposes (not specifically transfer pricing documentation) in accordance with prescribed accounting principles and the Serbian Law on Tax Proceedings and Tax Administration. Furthermore, the Ministry of Finance is expected to issue specific rules as to the content of transfer pricing documentation in the near future.
a) Which transactions must be documented (all transactions with associated enterprises, or only those which exceed a particular threshold)?
There are no exceptions / thresholds regarding the transactions that are to be documented.
b) What is the definition of “associated enterprises” for the purposes of this requirement?
According to the Serbian CPT legislation, a related party is a natural or legal person whose relationship with the taxpayer is such that control or significant influence may be exercised in business decisions. Entities owned, controlled or managed indirectly or directly by the same natural or legal entities are also considered associated parties.
A person holding 25% or more of the shares in the taxpayer is deemed to be in control of it. Furthermore, it is considered that holding 25% or more of voting rights in the taxpayer enables a person to exert significant influence over the taxpayer’s business decisions. In addition, any non-resident from a jurisdiction with a preferential tax regime (“tax paradise”) is considered to be a related party as are certain persons in marital or common-law relationships with the taxpayer, and the taxpayer’s blood relatives.
c) For EU countries, is the content of the documentation similar to that described in the EU Code of Conduct on transfer pricing documentation for associated enterprises (“EU TPD”)? If not, are taxpayers entitled to choose between the local requirements and the EU TPD?
d) Do taxpayers which are not established in your jurisdiction need to undertake to provide any specific information upon request? Can your tax authorities require the taxpayer in your jurisdiction to provide information which is located in another state?
The Serbian Law on Tax Proceedings and Tax Administration stipulates that a taxpayer is obliged to deliver accounting books and related business documentation located abroad if it has control or influence over the foreign entity such that it can procure delivery of the requested documentation.
e) If comparable studies are to be provided, do the tax authorities generally accept regional benchmark studies (e.g. pan-European benchmark studies)?
Generally, the tax authorities accept regional benchmark studies if they can be substantiated with reliable documentation. However, the requirements are rather stringent in this regard.
f) What language(s) are to be used by taxpayers in submitting the transfer pricing documentation?
Under the Serbian Law on Tax Proceedings and Tax Administration, the taxpayer must submit verified Serbian translations of the documents where documents are submitted in a foreign language and the tax authorities request a translation.