PERSONAL INCOME TAX LAW

On November 26, 2021, the National Assembly adopted the Law on Amendments to the Personal Income Tax Law. The following amendments were adopted, which will be mainly applied from 1 January 2022:

  • increase of the non-taxable amount of salary from 18,300 to 19,300 RSD;
  • extension of the validity of the “old” benefits from Articles 21c and 21d of the Law until the end of 2022;
  • exercising the right to tax benefits for newly established companies that perform innovative activities from Article 21e of the Law, based on the salaries of employees, and for those companies that will be established after December 31, 2021;
  • the period of application of the tax exemption based on the salary of qualified new employees is extended by prescribing additional conditions for the continuation of the exercise of rights until the end of 2025 (Article 21g of the Law);
  • exemption from capital gains tax for a taxpayer who contributes copyright and related rights and industrial property rights in its entirety as a non-monetary contribution to the capital of a company resident in RS;
  • reduction of income for taxation by annual personal income tax for taxpayers under 40 years of age;
  • exemption from taxation of the fee realized by students who perform learning through work as material and financial security.
  • extension of the application of the new rules for the taxation of freelancers, which temporarily abolished the determination of the tax liability by self-taxation until the end of 2022.

From 1 March 2021:

  • new benefit for newly employed persons who in the period from January 1, 2019 to February 28, 2022 did not have the status of insured employee, entrepreneur, or founder of employees in their company (Article 21z of the Law);
  • new benefit for employers (legal entities) who, within their activities, perform research and development on the territory of the Republic of Serbia (Article 21i of the Law).

LAW ON MANDATORY SOCIAL SECURITY CONTRIBUTIONS

From January 1, 2022, the most important amendment to the Law on mandatory social security contributions will be applied - reduction of the contribution rate for PIO from 25.5% to 25% (reduction of the contribution rate at the expense of the employer - for salary - by 0.5 %).

It is important to point out that all the benefits provided by the Personal Income Tax Law, in terms of payroll taxes, are also provided by the Law on Contributions in terms of exemption from paying a certain amount of contributions for compulsory social insurance.

CORPORATE INCOME TAX LAW

The Corporate Income Tax Law adopted an amendment, in Article 30 of this Law, which provides the taxpayer with the opportunity to obtain capital gains under certain conditions by transferring intellectual property rights (copyright, copyright related rights, as well as rights related to with the invention) in the capital of a resident legal entity, does not include in the corporate income tax base, with the prescribing of conditions that must be fulfilled so that the taxpayer would not lose the right to this tax benefit.

This change will be applied to determining, calculating and paying the tax liability starting for 2022, ie for the tax period starting in 2022.

PROPERTY TAX LAW

The following amendments were adopted to the Property Tax Law:

  • the right to lease an apartment or house for housing that is subject to property tax in accordance with this law, also considers the lease of an apartment constituted in accordance with the law governing planning and construction, as well as the law governing science and research;
  • regulates the day on which the obligation on the basis of property tax arises in the case when one person who is married acquires real estate through an encumbered legal transaction;
  • the basis of inheritance and gift tax and the absolute rights transfer tax in the transfer of ownership of a used motor vehicle is the value determined by applying the formula depending on the working volume of the vehicle, engine power and age coefficient of the vehicle – in force from 31 March 2022;
  • in the case of transfer with compensation of ownership rights on a used motor vehicle, the taxpayer of the absolute rights transfer tax is the buyer, and if it is a transfer between individuals who are not VAT payers, no tax return is filed to determine the absolute rights transfer tax, the tax is already determined and paid by self-taxation, except in cases for which tax exemption is prescribed (change of traffic license will be done with that proof);
  • the special mark “rent a car” as a condition for exercising the tax exemption for the transfer of ownership of these vehicles is deleted;
  • regulates the local competence of the tax authority to determine inheritance and gift taxes, as well as the absolute rights transfer tax, in the case where the taxpayer is an open-end investment fund, or alternative investment fund, which does not have the status of a legal entity;
  • postponement of the deadline from when local self-government units determine, collect and control inheritance tax and gift and the absolute rights transfer tax until January 1, 2023. Until December 31, 2022, the tax on that basis will be determined, collected and controlled by the Tax Administration.

Considering that the property tax is determined for a calendar year, in accordance with this law, the tax is determined and paid starting in 2022.

LAW ON TAXES ON THE USE, POSSESSION AND CARRYING OF GOODS

In the Law on Taxes on the Use, Possession and Carrying of Goods, an amendment was adopted, which increases the percentage of reduction of the prescribed amount of tax on the use of motor vehicles for passenger vehicles with an engine capacity over 2000 cm³, which are over five to 20 years old, so amounts to:

  • 25% for motor vehicles over five to eight years of age (instead of the previous 15%)
  • 40% for motor vehicles over eight to ten years of age (instead of the current 25%)

65% for motor vehicles over ten years of age (instead of the previous 40%)