US Expat Taxes in Serbia
Serbia is one of the few European countries with no US income tax treaty and no Social Security totalization agreement. That makes the US tax consequences of living and working in Serbia different from what applies in most of Europe, and it is why generic expat tax advice is often wrong for Serbia.
Egan Tax works with US citizens living in Serbia, including remote workers in Belgrade and Novi Sad, contractors, business owners and dual citizens. We handle the US side of your taxes, show you how your business structure affects your US tax bill, and coordinate with your Serbian accountant or tax advisor when the answer depends on Serbian law.
Who this page is for
Americans who moved to Serbia and work remotely for a US or foreign company
US citizens working independently or operating a business in Serbia
Americans operating as a Serbian preduzetnik, including paušalac or lična zarada arrangements
Dual US and Serbian citizens with income from both countries
Americans who own a US LLC or S Corporation while living in Serbia
Americans living in Serbia who have US brokerage accounts, retirement accounts or foreign investments
Americans who have missed US tax returns or foreign account reporting since moving to Serbia
The key US tax issues for Americans in Serbia
1. There is no US Serbia income tax treaty
The United States does not have an income tax treaty in force with Serbia.
That means no treaty tie breaker to resolve residency questions, no reduced treaty withholding rates, and no treaty provisions governing how pensions, business entities or other types of income are treated between the two countries.
The absence of a treaty does not mean you automatically pay tax twice. Double taxation is handled through each country’s domestic rules: the Foreign Earned Income Exclusion and Foreign Tax Credit on the US side, and Serbia’s own foreign tax credit rules on the Serbian side.
Serbia does have a FATCA agreement with the United States. FATCA is a financial account information exchange framework, not an income tax treaty, and it does not change how your income is taxed.
2. There is no US Serbia Social Security totalization agreement
The United States and Serbia do not have a Social Security totalization agreement. This matters most if you are self employed.
If you are an employee of a Serbian company, your Serbian wages are not subject to US self employment tax. If you are self employed while living and working in Serbia, your income is subject to US self employment tax even though you are also paying Serbian social contributions.
The Foreign Earned Income Exclusion does not reduce US self employment tax.
For anyone choosing between employment, a Serbian business, a US LLC or another structure, this changes the total tax cost materially. We model the US consequences before you choose a structure.
3. The Foreign Earned Income Exclusion still applies
Moving to Serbia does not prevent you from using the Foreign Earned Income Exclusion.
If you meet the physical presence test or the bona fide residence test, you can exclude qualifying foreign earned income from US federal income tax. The maximum exclusion for 2026 is $132,900.
Wages from working in Serbia qualify. Income from services you perform while physically in Serbia also qualifies, even when your clients are in the United States.
The FEIE reduces US federal income tax on earned income. It does not reduce US self employment tax.
The exclusion is measured against earned income before Serbian taxes and contributions are withheld, not the amount that reaches your bank account.
4. Your business structure makes a major difference
Americans living in Serbia regularly ask about US LLCs, S Corporations and Serbian structures such as preduzetnik.
The US tax classification of an entity does not determine how Serbia treats it. In particular, Serbia does not follow the US treatment of an S Corporation as a pass through entity. A US S Corporation can therefore produce very different Serbian consequences, including questions of Serbian corporate tax, tax on distributions, timing and how the entity is classified under Serbian law.
For many remote workers and contractors, a US single member LLC combined with Serbian preduzetnik status produces a more straightforward result in both countries. That is the structure we end up modeling most often, but it is not a universal answer, and the Serbian treatment should be confirmed with a qualified Serbian advisor before anything is implemented.
From the US side, a disregarded single member LLC is reported on your individual return. A Serbian preduzetnik or other foreign business operation is a foreign branch for US purposes and requires Form 8858 with your return.
We model the US tax consequences of an S Corporation, single member LLC and other structures and coordinate with your Serbian advisor on the local side.
5. Foreign account reporting starts as soon as you have Serbian accounts
Your Serbian bank accounts are foreign financial accounts for US reporting purposes. Foreign currency accounts, business accounts and balances held through services such as Wise or Revolut count as well.
If the combined maximum value of your foreign financial accounts exceeds $10,000 at any point during the year, you must file an FBAR.
You must also file Form 8938 if your specified foreign financial assets exceed the thresholds. For taxpayers living abroad, those thresholds are $200,000 at year end or $300,000 at any time for unmarried taxpayers, and $400,000 at year end or $600,000 at any time for married taxpayers filing jointly.
Neither the FBAR nor Form 8938 creates a tax by itself. They are information returns, and failing to file when required can result in significant penalties.
Getting paid by US clients
Many Americans living in Serbia continue to work for US clients.
For US tax purposes, whether a client pays a US bank account, a Wise account or a Serbian bank account does not change how the income is taxed. Where you perform the services and the nature of the business are what matter.
The payment method does matter for Serbian foreign exchange and business compliance rules. If you operate a business in Serbia and receive payments from US clients, your Serbian accountant should confirm how those payments are received, documented and reported under Serbian rules.
We make sure the US reporting is consistent with the structure being used in Serbia.
What happens to my US brokerage and retirement accounts?
Moving to Serbia does not end your US tax obligations on US investments. US citizens are taxed on worldwide income, including income from US brokerage accounts and other investments.
Your US brokerage may also have its own rules for customers who become residents of Serbia. Some institutions restrict services or require an account to be transferred or closed after you move abroad. That is a financial institution’s compliance decision, not a US tax rule.
We help you understand the US tax consequences of your investments and coordinate with your financial advisor when an account needs to change.
PFICs and foreign investments
If you invest in Serbian or other non US mutual funds or ETFs, the US Passive Foreign Investment Company rules apply.
PFIC treatment creates significant additional US tax and reporting requirements, including Form 8621. These rules apply even when the investment is an ordinary product in Serbia and even when you are already paying Serbian tax on it.
If you are considering a Serbian or European mutual fund or ETF, check the US tax treatment before you invest.
What we handle for clients in Serbia
- Form 1040 with Form 2555 for the Foreign Earned Income Exclusion
- Form 1116 for the Foreign Tax Credit
- FBAR, FinCEN Form 114
- Form 8938
- Form 8858 for a preduzetnik or other foreign business operation
- Form 5471 for ownership of a Serbian corporation
- Form 8621 for PFICs and foreign mutual funds
- US business structure planning involving S Corporations and single member LLCs
- US tax planning for Americans operating as a Serbian preduzetnik
- Self employment tax and estimated tax planning
- Streamlined Filing Compliance Procedures for missed US returns and international information returns
- Coordination with your Serbian accountant or tax advisor
Frequently asked questions
Is there a tax treaty between the United States and Serbia?
No. There is no US Serbia income tax treaty in force. Serbia does have a FATCA agreement with the United States, but FATCA is a financial account information exchange framework, not an income tax treaty.
Do I have to pay US self employment tax on income earned while living in Serbia?
If you are an employee of a Serbian company, no. If you are self employed, yes, because there is no US Serbia totalization agreement, and the Foreign Earned Income Exclusion does not reduce self employment tax.
Can I use the Foreign Earned Income Exclusion if I have US clients?
Yes. Services you perform while living and working in Serbia are foreign earned income for FEIE purposes even when your clients are in the United States. A client paying you from a US bank account does not make the income US source.
Is the FEIE limit based on gross salary or take home pay?
Gross. The Foreign Earned Income Exclusion is measured against your earned income before Serbian taxes and contributions are withheld. The maximum exclusion is $132,900 for 2026.
How will Serbia treat my US S Corporation?
Not as a pass through entity. Serbia does not follow the US S election and can treat the company as a foreign corporation you control, with Serbian tax at the corporate level and again on distributions. Have a Serbian tax advisor analyze this before establishing or keeping an S Corporation while resident in Serbia.
Should I register as a preduzetnik in Serbia?
For most remote workers and contractors, preduzetnik status paired with a US single member LLC is the structure we end up modeling, because it keeps the income personal in both countries and lets the FEIE cover the full profit. It does not change US self employment tax, it requires Form 8858, and the Serbian side should be confirmed with a qualified Serbian advisor before you register.
My Serbian accountant says I only report my US income in Serbia if I take dividends. Is that right?
Not necessarily. That is a Serbian law question that turns on your residency status, the type of US entity and how Serbia classifies it. We do not assume income earned through a US entity is invisible to Serbia because it has not been distributed, and we coordinate with your Serbian accountant so both returns rest on the same facts.
Does it matter whether my US client pays my US bank account, Wise account or Serbian bank account?
Not for US income tax. Where you perform the services, the nature of the income and your business structure are what matter. The payment method does matter for Serbian foreign exchange rules, and every account has to be evaluated for US foreign account reporting.
Do I need to file an FBAR for my Serbian bank account?
Yes, if the combined maximum value of all your non US financial accounts exceeds $10,000 at any point during the year. The accounts are added together, not tested one by one. The FBAR is due April 15 with an automatic extension to October 15.
Can I keep my US brokerage account after moving to Serbia?
Sometimes. It depends on the brokerage’s policy for foreign residents, which is separate from whether the account remains taxable by the United States.
What if I own Serbian or European ETFs?
Check the US classification before you buy. Most non US mutual funds and ETFs are PFICs for US tax purposes, which means Form 8621 reporting and unfavorable US tax treatment.
I have not filed US returns since moving to Serbia. What now?
If your failure to file was non willful, you likely qualify for the IRS Streamlined Filing Compliance Procedures: three years of returns, six years of FBARs and a certification statement, with no failure to file penalties. Eligibility depends on your facts, so we review the circumstances first.
US Expat Tax Support For Americans Living In Serbia
Living in Serbia can involve US tax filing requirements, foreign income reporting, business structure decisions, foreign accounts, investments, and international tax considerations. Professional review helps ensure your US tax filings reflect your actual situation and the correct reporting requirements.
Clients work directly with Bill Egan, CPA on Serbia expat tax matters and related U.S. international tax issues.
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