August 01, 2004 | By Keith Martin in Washington, DC

Serbia revamped its tax system in late July.

The Serbian parliament voted on July 23 to replace an existing sales tax with an 18% value added tax, with some goods and services being subject to a special rate of 8%. The change will take effect next January 1.

The country has also reduced its corporate income tax rate from 14% to 10%. However, dividends, interest and royalties that Serbian companies pay to foreigners will remain subject to a 20% withholding tax unless reduced by a tax treaty. New depreciation schedules have been put in place.

Keith Martin