The Government of the Republic of Serbia has adopted set of tax and other laws on 6 December 2019:

  • Personal Income Tax Law;
  • Law on Social Security Contribution;
  • Tax Procedure and Tax Administration Law
  • Corporate Income Tax Law;
  • Property Tax Law;
  • Taxes on the Use, Holding and Carrying of Goods Law;

The laws will be published in the next issue of the Official Gazette of the Republic of Serbia, generally coming into force on the eighth day from the date of publication, but the majority will apply from January 1, 2020 (with later application of certain provisions).

PERSONAL INCOME TAX LAW

Excluding of income of taxation:

  • Increase of non-taxable amount of scholarship and students loan up to RSD 30,000 monthly;
  • The income of non-residents who reside on the territory of Serbia up to 90 days in period of 12 months beginning and ending in current tax year, when the income is realized by non-resident employer, is excluded.

Changing of the tax base on earnings

  • The base for taxation is reduced by RSD 16.300 started from 1 February 2020;
  • The tax base on earnings can be reduced for newly state resident (foreigner) for 70% if the conditions prescribed by this Law are fulfilled.

Tax relief for hiring new people

  • An employer – a newly establish company which performs innovation activity can realize tax relief for earnings of founder in period of 36 months from the day of company was founded;
  • An employer who employs qualified new employee by 31 December 2020 may realize tax benefits of 60%, 65% and 70% as of 31 December 2022.

Income from self-employment

  • The taxable income from self-employment does not include income realized by entrepreneur and which is taxable by tax on other income;
  • New criteria are introduced for classification of lump-sum entrepreneurs in the groups;
  • New criteria for determination of starting point for determination of the amount of lump-sum income of entrepreneurs are introduced;
  • “The test of independence” for entrepreneurs is introduced;
  • An entity who starts to perform the activity and who registers in SEBRA, the request for lump-sum taxation can submit only in the moment of registration;
  • An entity who does not register in SEBRA, the request for lump-sum taxation submit to the Tax administration in deadline of 5 days from the day of registration, electronical, through the portal of Tax administration.

Determination of capital gains

  • The purchase price of securities acquired by the taxpayer from the employer or the related party with employer at preferential price or without fee for the purpose of determining capital gain is specified;
  • In case of transfer with compensation of shares or shares of non-resident companies or securities whose issuer is not a tax resident of the Republic, if the resident taxpayer at the time of acquiring these shares, shares or securities, as well as at least 6 months after their acquisition, was not a resident of the Republic, the purchase price is considered to be their market value on the day they became a tax resident of the Republic.

COMPULSORY SOCIAL SECURITY CONTRIBUTION LAW

Contribution base

  • The contribution base on earnings for employees and employers is reduced by 70% for newly state resident if the conditions prescribed by this Law are fulfilled.

The changing of the rate of contribution

  • The contribution rate for pension and disability insurance has changed from 12% to 11.5%;
  • A newly establish company which performs innovation activity can realize tax relief from payment of contribution on the expense of employer for earnings of founder in period of 36 months from the day of company was founded for founder who are employed in that company with fulfilling of prescribed conditions;
  • An employer is exempted from the obligation of payment of mandatory social security contributions for pension and disability insurance at the expense of the employee and employer for the payment of earnings to qualified new employees in the amount of 85%, 95% and 100% as of 31 December 2022.

TAX PREOCEDURE AND TAX ADMINISTRATION LAW

Content of tax-legal relationship

  • In addition to the request for refund of more or wrongly paid pension and disability insurance contribution, the taxpayer - individual submits the decision of the Republic Pension and Disability Insurance Fund on the determined right to refund the pension and disability insurance contribution.

Obligations of bank during opening the account

  • At the request and in deadline determined by the Tax Administration, the Bank is obliged to submit in electronic form data on the balance and turnover in current accounts and savings deposits of taxpayers - legal entities, entrepreneurs and individuals, deposits of taxpayers - legal entities, i.e. on current account numbers and savings deposits of taxpayers - individuals and the name of the banks that lead them.

Registration to SEBRA

  • The Serbian Business Register Agency cannot register change of data related to founder of legal entity, if the new founder at the same time founder of other legal entity temporally deprived TIN in accordance with this Law, due to illegal business or outstanding tax liabilities.

Delivery

  • The tax act can be delivered to the taxpayer in electronic form through the portal of the Tax Administration, as well as for informing the taxpayer through a single electronic mailbox in accordance with the law governing electronic administration;
  • A tax act submitted in electronic form through the portal of the Tax Administration shall be considered as submitted on the date of posting to the portal of the Tax Administration.

Other changes

  • Tax Administration options have been expanded regarding previous tax collection measures;
  • Certain changes related to penal provisions have been made according to other amendments of the Law.
  • The scope of information that the taxpayer is obliged to provide to the Tax Administration regarding the business premises in which he conducts business has been expanded.

CORPORATE INCOME TAX LAW

  • The income that the resident taxpayer, established in accordance with the regulations governing the investment funds, realizes from the alienation of property in accordance with this Law, is not included in the tax base;
  • The right to a tax credit of a taxpayer - a bank, is more specific;
  • The submission of an annual report on the controlled transactions of an international group of related legal entities by a resident obligor - the parent company - is specified.

Other changes

  • The right to use a withholding tax credit paid in another country for income from services rendered in that other country;
  • The method of applying the tax incentive for investments in fixed assets the taxpayer applies starting from the tax period in which he realized accounting profit and not taxable profit;
  • Tax consolidation provisions are specified.

PROPERTY TAX LAW

  • It is specified that fair value in accordance with IAS, IFRS and adopted accounting legislation does not form the basis of property tax for the tax year for real estate of a taxpayer conducting business books;
  • It is prescribed which facilities are considered as facilities for primary agricultural production for the purpose of obtaining tax exemption;
  • The deadline for determining the tax base in case if the taxpayer is not obliged to submit a tax return in accordance with this Law is specified;
  • Notary's obligations are specified;
  • Tax return is not submitted for determining the inheritance tax and the gift of the real estate right, i.e., the tax on the transfer of absolute real estate rights, based on the document prepared, certified or confirmed by the notary public, i.e. the final decision made by the notary in the exercise of the law entrusted public powers, in case when, in accordance with this Law, the tax liability arises on the day of preparation, certification or confirmation, or the day the decision made by the notary public takes effect.
  • In the case where the taxpayer is obliged to submit a tax return for the inheritance of real estate, in the territory of one or more organizational units of the Tax Administration, he submits one tax return (according to the place of residence, residence or seat), and not according to the place of each real estate.

LAW ON TAXES ON USE, HOLD AND CARRIAGE OF GOODS

  • Tax on the use of vessels is not paid on vessels for which the taxpayer is the ministry responsible for internal affairs;
  • It is specified what is considered a registered weapon;
  • It is specified when the obligation to pay taxes on registered weapons arises;
  • It is specified who is liable to the tax on registered weapons;
  • It is specified the method of determining the amount of tax on registered weapons when a tax liability was incurred during the calendar year;
  • The tax administration's determination of tax on registered weapons is specified;
  • The responsibilities of the Republic body responsible for internal affairs are specified.