SERBIA Law and Practice Contributed by: Uroš Popović and Stefan Golubović, Drašković Popović & Partners
2.4 Lessor’s Liabilities 2.4.1 Tax Requirements for a Foreign Lessor A foreign lessor has to pay income tax on the income it gains through its permanent business unit in the territory of Serbia, unless otherwise stipulated in a tax treaty. In other words, unless a foreign lessor has a perma - nent establishment in Serbia, it is not required to pay income tax. 2.4.2 Effects of Leasing on the Residence of a Foreign Lessor A foreign lessor may not be considered to be resi - dent, domiciled, carrying on business or subject to any taxes as a result of its being a party to, or its enforcement of, the lease. 2.4.3 Engine Maintenance and Operations Generally speaking, liabilities in respect of aircraft or engine maintenance and operations may not be imposed on a foreign lessor under a lease as a result of it being a party to the lease. 2.4.4 Damage or Loss Caused by an Asset A lessee is liable for the damage that is caused to the property or health of third persons by the aircraft. 2.4.5 Attachment by Creditors Creditors of a lessee could not attach an aircraft leased to it but owned by a different entity. 2.4.6 Priority of Third Parties’ Rights In very limited circumstances, it is possible that some third-party rights will take priority over a lessor’s rights under an aircraft lease through the legal concept of “right of retention”. This is where the third party retains the aircraft as a guarantee of payment owed, eg, repair and maintenance costs, warehousing, deposi - tory costs, etc. 2.5 Insurance and Reinsurance 2.5.1 Requirement to Engage Domestic Insurance Companies There are no mandatory Serbian regulations which dictate insurance must be placed with a domestic insurance company.
2.3.4 Registration of Leases With the Domestic Aircraft Registry Registration of the lease with the Aircraft Register is optional but preferable. This is because if the lease is registered with the Aircraft Register third parties will be considered to be familiar with the existence of the lease. The registration of the lease of an aircraft may be ini - tiated by the lessor or the lessee by submitting the request for the registration of the lease to the Aircraft Register along with the: • lease agreement; • airworthiness certificate; • corporate documentation; and • court decision on registration of the aircraft. If the lessee is a foreign person/entity, the consent of the competent ministry is required. Additional docu - mentation may be requested by the Aircraft Register. The estimated period for completion is one month. 2.3.5 Requirements for a Lease to Be Valid and Registrable A lease needs to be concluded in the form specified in its governing law. There are no additional require - ments under Serbian law. If the lease agreement were to be presented to the Serbian authorities, a certified translation of the agreement would be needed. 2.3.6 Taxes/Duties Payable for Registering a Lease See 2.1.5. Taxes/Duties Payable for Physical Execu- tion of a Lease . 2.3.7 Registration of Aircraft in Alternative Countries There are no popular alternative countries in which aircraft habitually based in Serbia are typically reg - istered. 2.3.8 Requirements for Documents Concerning Registration All documents submitted to the authorities, including, but not limited to, the bill of sale or the lease agree - ment have to be provided in the original or a certified copy and accompanied by the certified translation.
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