March 2023

The Ministry of Finance published the Rulebook on interest rates considered to be in line with the "arm's length" principle FY 2023. The Rulebook applies from April 6th, 2023. The Rulebook prescribes interest rates that, in accordance with the "arm's length" principle, for the year 2023, are calculated on loans, and credits between related parties.

The alternative is for the obligor to independently determine the "arm's length" interest rates, in accordance with the provisions of Article 61, para. 4. and 5. CIT Law which prescribe the following:

• The taxpayer has the right to apply the general rules on determining the price of the transaction based on the "arm's length" principle, instead of the amount of the interest rate prescribed by the minister for the purposes of determining the amount of the interest rate that would be calculated on the loan or credit with related parties based on the "arm's length" principle.
• The taxpayer who decides to exercise the right provided in paragraph 4 of this article is obliged to apply the general rules on determining the price of a transaction based on the "arm's length" principle to all loans, i.e. credits with related parties.

Below are prescribed interest rates, for banks and providers of financial leasing, and separately for other companies.

Interest rates for banks and financial leasing providers:

1)     1,48% on short-term credits in RSD;

2)     4,47% on long-term credits in RSD;

3)     3,25% on credits in EUR and RSD credits indexed in EUR;

4)     4,43% on credits in USD and RSD credits indexed in USD;

5)     2,63% on credits in CHF and RSD credits indexed in CHF;

6)     3,70% on credits in SEK and RSD credits indexed in SEK;

7)     1,88% on credits in GBP and RSD credits indexed in GBP;

8)     1,91% on credits in RUB and RSD credits indexed in RUB;

9)     4,01% on credits in CNY and RSD credits indexed in CNY;

Interest rates for other companies:

1)     3,88% on short-term credits inRSD;

2)     4,74% on long-term credits inRSD;

3)     2,98% on short-term credits in EUR and RSD credits indexed in EUR;

4)     3,22% on long-term credits in EUR and RSD credits indexed in EUR;

5)     7,84% on short-term credits in CHF and RSD credits indexed in CHF;

6)     3,18% on short-term credits in USD and RSD credits indexed in USD;

7)     4,28% on long-term credits in USD and RSD credits indexed in USD.

The specified interest rates are also applied to loans.