29
Sat, Mar
46 New Articles

Updated 2025 Arm's Length Interest Rates Published

COVID-19 Tax Relief Measures

Serbia
Tools
Typography
  • Smaller Small Medium Big Bigger
  • Default Helvetica Segoe Georgia Times

The Ministry of Finance has adopted the Rulebook on interest rates considered to be in line with the "arm’s length" principle for 2025. The Rulebook was published in the Official Gazette on February 28 and will enter into force on March 8.

Compared to 2024, the changes are as shown in the table below:

For banks and financial leasing providers:

  • Short-term credits in RSD - decrease from 5.02% in 2024 to 3.92% in 2025;
  • Long-term credits in RSD - decrease from 5.16% in 2024 to 0.81% in 2025;
  • EUR credits and credits indexed in EUR - increase from 4.31% in 2024 to 4.59% in 2025;
  • USD credits and credits indexed in USD - increase from 5.02% in 2024 to 5.26% in 2025.

For other companies:

  • Short-term loans in RSD - increase from 7.57% in 2024 to 8.01% in 2025;
  • Long-term loans in RSD - decrease from 8.30% in 2024 to 8.24% in 2025;
  • Short-term EUR loans and loans indexed in EUR - increase from 6.12% in 2024 to 6.41% in 2025;
  • Loan-term EUR loans and loans indexed in EUR - increase from 6.23% in 2024 to 6.79% in 2025;
  • Short-term USD loans and loans indexed in USD - increase from 8.20% in 2024 to 8.31% in 2025;
  • Loan-term USD loans and loans indexed in USD - decrease from 4.25% in 2024 to 3.40% in 2025;

By analysing the differences in interest rates, we conclude that long-term lending within business groups in dinars and US dollars is less tax-advantageous in 2025, with a sharp drop in the tax rate especially for banks and financial leasing providers (from 5.16% last year to 0.81% this year for dinars, and from 4.25% to 3.40% in the case of the US dollar).

Short-term lending in dinars with related parties is also less tax-advantageous for the banks and financial leasing providers. In all other cases, in 2025, slightly higher interest rates will be recognized as interest rates " arm’s length".

Of course, banks and financial leasing providers, as well as all other companies, have the option to apply the general rules on determining the transaction price on the "arm’s length" principle, instead of applying the interest rates prescribed by the rulebook, and then to use the interest rates thus determined for the purposes of the transfer pricing rules.

By Nikola Djordjevic, Partner, JPM Partners

JPM Partners at a Glance

We are a full service commercial law firm in Serbia, with over 30 years of successful practice in SEE region and true and lasting partnerships with our clients.

Our diverse teams of lawyers are focused on practice in specific legal areas, handling some of the most high-profile multijurisdictional matters in energy, project development, mining, foreign investments, corporate and commercial. We are highly sought-after for legal advice in creative industries, environmental law and white-collar crime, as well as intellectual property, international arbitration, labor and data protection

As an exclusive member of Lex Mundi – the world’s premiere network of leading independent law firms, we interconnect and reach globally. Regionally, we advise clients in Montenegro directly, through well established partnership with ‘JPM Montenegro Partner Vukmirovic Misic law firm’ and close working relationships with selected first-rate firms in the region. Working together with our domestic and international clients on their most significant transactions and around entry to Serbian market, allows us to operate as the perfect hub for SEE and other cross-border transactions.

Our clients operate in increasingly competitive landscape and we are identifying new methods of using legal technology, to help them increase efficiency, save time and streamline work processes - document management, billing and accounting. By adopting LUMINANCE AI platform for legal professionals, we use machine-learning for contract analyses across our practice groups, as well as eDiscovery revolutionary software to simplify operations in all forms of litigation.

With exclusive access to EQUISPHERE – Lex Mundi Innovative service model, our clients can design their own legal team by choosing the best lawyers in the relevant jurisdictions, sharing documentation and communicating with all teams at any time, from a single point of contact.

Consistently recognized as a top-tier law firm, both by clients and leading independent legal directories Chambers & Partners, Legal 500 and IFLR1000, we remain committed to delivering highest quality service to our clients and help them succeed in overcoming cross-border challenges. We remain committed to continuously share our knowledge by regularly publishing articles, giving lectures and organizing international conferences.

Firm's website: http://jpm.rs/