You can create a .env file with:
PYTHONPATH=server
That will add your server folder to PYTHONPATH as needed.
(You may need to restart VSCode for it to take PYTHONPATH into account correctly.)
Edited to clarify…
Create a file named .env under the repo root e.g. your_repo/.env.
Also creating the file under the folder where your consuming code is, instead of under repo root, seems to work e.g. your_repo/service/.env.
For more details, see documentation on environment variable definition files.
For me this worked without restarting VSC, perhaps this is a matter of newer VSC and extensions versions.