Compared to 2024, banks and financial leasing providers face fewer tax benefits for long-term loans in dinars and USD, especially with sharp rate drops. Short-term dinar loans with related parties are also less tax-friendly for these institutions. Most other loan types will have slightly higher approved rates.
Companies can still use their own methods to set interest rates under the “arm’s length” principle instead of following the official rates, offering flexibility. Businesses should review their group loans and tax strategies to adapt to these changes. Banks and leasing providers need to focus on dinar and USD lending practices to avoid risks. While the rules provide a standard approach, using alternative methods might be better for some. Overall, companies must stay careful with cross-border and local transactions to follow the updated rules. Proactive planning is key to managing these changes smoothly in 2025.
In this article, Nikola Đorđević, Partner at JPM’s Belgrade office, provides a detailed breakdown of newly published Arm’s Length Interest Rates.
