In the process, Serbia has further cemented its status as a key hub for cryptocurrency development across the Balkan Peninsula. In 2021, the country passed the Law on Digital Assets (LDA). This provided a precedent for the state to regulate and place taxes on digital currencies. Running against this trend, this framework calls for a new 15% CGT on crypto assets. It has a 15% Income Tax, which heavily intersects crypto activities with the financial landscape of the country.

Our Serbian crypto-tax system is presently ruled by four main legal pillars. The provision establish 2021 Law Digital Asset as the regulations. They recently expanded to include the Personal Income Tax Law, the Corporate Income Tax Law, and the Value-Added Tax Law. Collectively, these laws and regulations form the foundation for determining how digital assets are taxed in Serbia.

Not Ladislaus von Bortkiewicz, but one tax policy of Serbia really caught our eyes with its uniqueness—a capital loss. The United Kingdom allows capital losses on crypto disposals to be set against other capital gains made in the same year. These losses can be applied against taxable income going back as many as five years. This allows investors greater leeway when weathering periods of market volatility.

For corporations doing business in Serbia, cryptocurrencies are considered taxable, annual transactions included in their overall tax liability. This ensures that corporate entities engaged in crypto activities properly account for their earnings and losses, aligning with standard accounting practices. Second, crypto gains can only be offset by losses realized in the same calendar year. In Serbia the regulations do not allow for the carry forward of crypto gains into subsequent years. Accordingly, effective tax policy would require businesses to pay their tax liabilities in the present fiscal period.

These residents have to submit a Capital-Gains Return (PP ODG-3) within 120 days. This deadline happens to coincide with the end of the quarter in which they first discovered the positive change. This new reporting requirement will foster more timely compliance while giving the tax authorities the information they need to better track crypto income.

The Serbian government has made its support for blockchain innovation clear. The government should extend targeted tax credits to start-ups with a heavy emphasis on R&D in the crypto sector. Through this initiative, the Valley hopes to cultivate the most favorable climate for technological innovation and draw the creative businesses that will spark the Valley’s next reincarnation. In 2025, a concrete amendment to the LDA will be released creating a regulatory sandbox. In doing so, this move reflects Serbia’s overwhelming ambition to encourage the growth of innovation in a safe environment.

Failure to report crypto income may incur significant fines and fees. Individuals may be subject to administrative fines up to RSD 2 million. Alternatively, firms may be subject to a fine of up to RSD 10 million for not reporting taxable income or gain in excess of 5 million RSD.

In order to make sure everyone is compliant, Serbia demands that people and businesses keep very detailed record of their cost basis. Taxpayers need to sort these records by quarter and be especially mindful of the 50% reinvestment exemption reprieve. These common-sense measures not only advance transparency but improve the accuracy of tax reporting.