What do the results reported by 2,000 of the largest companies in 2008 – 2012 show us?

During 2008 - 2012, circa 30% of the largest 2,000 Serbian companies (turnover wise) incurred net losses at least in one year, and circa 11% of them incurred net losses for three years. If operating losses are taken into account, about 37% of the sample companies saw losses at least in one year, with circa 12% if them sustaining losses during no less than three years.


1 year

2 years

3 years

4 years

5 years

Net losses






Operating losses






Table 1: Share of companies that incurred net losses during 2008 – 2012, i.e. for … years

Above are the results of a research focusing on the scope of the aging losses amongst Serbian companies, carried out as a first by the consulting firm Transfer Pricing Services. Both aggregate data and data broken down as per controlling shareholder (resident or non-resident) are available upon request.

“It is a common sight, the new normal, to talk about losses during downturn times. However, analyses revealing the exact extent of the phenomenon are still overdue. For instance, the size of the segment of companies that incur losses for multiple years in a row. It is what we planned to uncover in our study now, five years after the recognised onset of the current global economic crisis” says Marko Milojevic, TPS Serbia director.

For full access to the article, please click here.

According to the amendments to Serbia’s rulebook on transfer pricing, the taxpayers may submit a short form report for the transactions with related parties that satisfy at least one of the following conditions:

1)    If the transaction with the associated enterprise is a one-off transaction in the year for which the tax balance is prepared and if the value of transaction is not higher than the value of sale for which the Value Added Tax Law sets the obligation of registration for the value added tax (in this moment RSD 8 million, approximately EUR 70,000, USD 94,000);

2)    If the total value of transaction with one associated enterprise during the year for which the tax balance is submitted is not higher than the value of sale for which the Value Added Tax Law sets the obligation of registration for the value added tax.

This relief is not permitted for loans and credit transactions.

Short form report should include the following information:

  • a description of the transaction;
  • transaction value;
  • associated enterprise (related party) involved in transaction.

Irrespective of the form, the taxpayer shall submit the transfer pricing documentation together with the annual tax return.

”We interpret the recent changes as a signal that tax authorities intend to focus on ”heavy weight” transactions during tax inspections and therefore a case of significant adjustment of transfer prices should be expected to happen pretty soon. It is a predictable development, based on our experience in other countries. Everywhere, tax authorities are in rush for collecting more and more money to the state budget, and transfer pricing matters are a tool to identify new taxable revenues. Notably, many times an aggressive transfer pricing audit follows as a result of a general tax audit or in some cases may also start from a VAT refunding” – notes Adrian Luca from TPS.