What is the Expense Reimbursement policy in Serbia?

TABLE OF CONTENTS

• Documentation Requirements
• Transport & Travel Expenses
• Accommodation & Meals
• Per Diems & Travel Allowances
  • Non‑Taxable Per Diem Amounts (Reference)
• Tax Treatment
• VAT Considerations

Documentation Requirements

To ensure compliance and tax deductibility, each claim should include:

• Employee name
• Travel dates
• Business purpose
• Origin/destination
• Mode of transport and class of travel
• Distance traveled (for mileage)
• Cost
• Supporting invoice or receipt showing:
  • Vendor name and tax ID (if applicable)
  • Date of transaction
  • Description of goods/services
  • Amount (including VAT if applicable)
  • Business purpose
  • Entity name (e.g., Horizons Global Technology d.o.o. (Beograd))

Aligning invoices with the correct legal entity helps maintain audit trails and enables VAT input deduction.

Transport & Travel Expenses

• Mileage: No statutory fixed rate; reimbursement depends on internal policy or client agreement.
• Public transport: If the employer does not provide transport, reimbursement up to the cost of a monthly ticket is common (e.g., RSD 3,988 for civil servants).
• Parking and tolls: Reimbursable separately with receipts.
• Air/train/bus/taxi/rental cars:
  • Must be for business purposes.
  • Require invoice/receipt and employer approval.
  • Documentation should include route and purpose.

Accommodation & Meals

• Hotel costs for business trips: Invoice should ideally be addressed to the company or employee, with business purpose documented.
• Meals and entertainment: Allowed if incurred during business meetings; subject to internal policy and Serbian tax rules.

Per Diems & Travel Allowances

Serbia regulates per diem allowances and sets maximum non‑taxable amounts.

Non‑Taxable Per Diem Amounts (Reference)

• Domestic travel: approximately RSD 2,425 per day
• International travel: up to EUR 90 per day (varies by country)

Important rules:

1. Employers may pay more, but excess amounts are taxable.
2. Before departure, employees must complete a travel order stating departure and return time.
3. After returning, employees must submit all invoices and receipts to justify the expenses.
4. Per diems apply only when all required documentation is submitted.

Tax Treatment

• Business-related reimbursements: Non-taxable if properly documented.
• Non-business or personal expenses: Taxable as employment income.
• Wellness expenses (gym, therapy, etc.): Generally taxable unless part of an approved corporate wellness program.

VAT Considerations

This guide explains how employees can claim business-related expenses in Serbia, including documentation requirements, tax considerations, and best practices.

• All reimbursed expenses must be wholly and exclusively for business purposes.
• Claims should be reasonable, justifiable, and supported by proper documentation.
• Undocumented reimbursements may be treated as taxable income for employees (10% PIT).

• Entity name must match the contracting company for input VAT recovery.