Arm’s Length Interest Rates Applicable for 2026
The Ministry of Finance has published the Rulebook on Arm’s Length Interest Rates applicable for 2026 that applies to related parties’ loans. The rulebook comes into force on May 2, 2026.
Interest rates in accordance with the “arm’s length” principle that apply to banks and financial leasing companies for 2026 are:
- 4.40% applicable to short-term loans in RSD;
- 0.33% applicable to long-term loans in RSD;
- 4.87% applicable to loans in EUR and dinar loans indexed in EUR;
- 4.98% applicable to loans in USD and dinar loans indexed in USD;
- 3.05% applicable to loans in CHF and dinar loans indexed in CHF;
- 4.12% applicable to loans in SEK and dinar loans indexed in SEK;
- 1.50% applicable to loans in GBP and dinar loans indexed in GBP;
- 10.73% applicable to loans in RUB and dinar loans indexed in RUB.
Interest rates in accordance with the “arm’s length” principle that apply to other companies for 2026 are:
- 7.13% applicable to short-term loans in RSD;
- 7.21% applicable to long-term loans in RSD;
- 4.75% applicable to short-term loans in EUR and dinar loans indexed in EUR;
- 5.42% applicable to long-term loans in EUR and dinar loans indexed in EUR;
- 7.10% applicable to long-term loans in CHF and dinar loans indexed in CHF;
- 4.43% applicable to long-term loans in USD and dinar loans indexed in USD.
Taxpayers can use the prescribed interest rate to determine corporate income tax in 2026, i.e., when calculating adjustments to expenses and income between related parties.
Additionally, we note that the aforementioned interest rates can be used in 2026 while paying interest on received loans, i.e., loans from foreign-related parties, since most Double Taxation Treaties prescribe the option to use beneficiary withholding tax rates only up to the “arm’s length” interest rate amount. A withholding tax rate of 20% is applied to the amount that exceeds the “arm’s length” interest rate.
For any further questions, the TPA team is at your disposal.
