Taxation of companies

Plan your taxes obligations that suit your business.

A company's tax obligations affect net results, cash flow, and future business development. We help owners and management make decisions based on concrete data, not assumptions.

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Corporate income tax

The primary obligation on a company's earned profit.

Dividends

Tax treatment of profit distributions to company owners.

PDV

Calculation, record-keeping, and optimisation of value added tax.

Target audience

Who is this service for?

Companies in the early stages of business

Companies with growing revenue

Companies with foreign ownership

Companies seeking to reduce their tax burden

Companies with related-party transactions

Companies planning investments and expansion

Tax obligations

How does taxation of companies work?

A company may be subject to several types of tax obligations simultaneously.

Corporate income tax

Corporate income tax is the primary obligation of a company and is paid on the business result achieved at the prescribed rate.

The amount of tax obligation depends on recognised income and expenses, tax reliefs, losses from prior periods, and other elements prescribed by law.

Dividends and profit distributions

Profit distributions to company owners are subject to additional taxation, depending on the recipient's status — domestic or foreign, individual or legal entity.

Proper planning of profit distributions can significantly affect the overall tax burden on owners and the company.

Related parties and transfer pricing

Transactions between related parties must be at arm's-length prices, with appropriate documentation and compliance with transfer pricing regulations.

The Tax Administration pays special attention to these transactions, especially in business with foreign parties.

Overview of obligations

Comparative overview of tax obligations

Obligation	It is most often relevant when	Benefits of planning	What to pay attention to
Corporate income tax	The company achieves a positive business result	Ability to use reliefs and losses from prior periods	Accuracy of expense recognition and payment deadlines
Dividends	The company plans to distribute profit to owners	Optimisation of the overall burden on the company and owners	Recipient status and application of double taxation treaties
Transfer pricing	There are related-party transactions	Reduced risk of adjustments and penalties	Documentation and compliance with arm's-length prices

Corporate income tax optimisation

Proper planning of income and expenses, use of reliefs and tax losses can significantly affect the company's net result.

We most often recommend it for: companies with seasonal income, companies in a growth phase, companies with significant investments, and firms with multiple income sources.

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When are dividends especially important?

Profit distributions to owners directly affect personal liquidity and overall tax burden. Planning distributions before making a decision can yield significant savings.

The most common examples are: companies with multiple owners, companies with foreign shareholdings, and firms planning reinvestment instead of profit distribution.

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KCM tax planning model for companies

There is no universal approach to tax planning. A strategy that suits one company may be unfavourable for another. Therefore, before making a decision, we analyse: expected income and expenses, ownership structure, planned investments, international business, VAT status, and related-party transactions.

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Business with foreign parties

We advise on tax residency, application of double taxation treaties, and compliance with international regulations.

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Taxation and accounting

We link tax obligations to accurate bookkeeping and financial reporting.

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Related parties and transfer pricing

We help with monitoring related-party transactions and preparing appropriate documentation.

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What do you get from KCM?

analysis of tax obligations, overall burden assessment, optimisation plan and implementation support, ongoing advisory.

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Frequently Asked Questions

Which tax obligations are most significant for a company?

The most significant obligations usually include corporate income tax, VAT, contributions on employee wages, as well as tax consequences of dividend payments. The exact scope depends on the activity, ownership structure, and manner of doing business.

How is the corporate income tax base determined?

The tax base is formed based on recognised income and expenses in business records, applying reliefs, losses from prior periods, and other elements prescribed by law.

Must a company be in the VAT system?

Yes, when annual turnover exceeds the prescribed threshold. VAT-registered entities must keep records, file returns, and meet payment deadlines. Voluntary registration is also possible before the threshold in certain situations.

When should you consider paying dividends?

When a company earns profit, owners plan personal liquidity, or when profit needs to be distributed. Before distribution, we recommend analysing the overall tax effect on the company and owners.

When is transfer pricing required?

When a company conducts transactions with related parties — a parent company, branch, owners, or other related entities. Prices must reflect arm's-length conditions, with appropriate documentation.

How is business with foreign partners taxed?

It depends on the type of transaction, the residency of the parties, and the application of international treaties. It is necessary to consider tax implications in Serbia and in the partner's country, as well as transfer pricing obligations.

Not sure whether your company's tax obligations are optimally planned?

Choosing a tax strategy can significantly affect total operating costs, liquidity, and future growth.

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