The law stipulates that all natural persons who generate income pay the tax. Taxation income is regulated exclusively by this law, and tax reliefs and exemptions can only be introduced by its provisions, writes Biznis.rs.
Tax is paid on income from all sources, except those that are expressly exempted. Taxable income includes wages, income from self-employment, copyrights, capital, real estate, capital gains and other income, regardless of whether they are realized in money, in kind or otherwise.
Who will have to pay?
The law also defines taxpayers. Residents of Serbia pay tax on income earned in the country and abroad, while non-residents pay tax only on income earned in Serbia. A resident is a person who has a place of residence or a center of life and business interests in Serbia, that is, who stays in the country for at least 183 days during a period of 12 months.
Special rules are provided for officials of the institutions of the European Union, members of their families, as well as for diplomatic and consular personnel of Serbia.
The law also prescribes a large number of tax exemptions. Among other things, the tax is not paid on social benefits, child allowances, unemployment benefits, pensions, disability benefits, scholarships up to the prescribed amount, assistance due to natural disasters, subsidies and incentives in agriculture, volunteering fees, certain one-off benefits and other public interest benefits. It is also foreseen that certain incomes of non-residents who stay in Serbia for up to 90 days will be exempted from taxation, under prescribed conditions.
The bill provides that the tax credit is used to reduce the calculated personal income tax. Residents of Serbia who earn income abroad and pay tax on it in another country have the right to include that amount as a tax credit in Serbia, but at most up to the amount of tax they would pay on the same income according to domestic regulations.
Inflation
Monetary amounts prescribed by law, such as certain tax-free incomes and tax benefits, will be adjusted once a year with the increase in consumer prices, while the Government will publish new amounts every year.
Normalized costs are recognized for certain revenues. Expenses of 110.647 dinars per quarter are recognized for income from copyright and related rights, while 66.733 dinars are recognized for income based on the contracted remuneration for work. If a person earns both types of income, he can use both standardized deductions.
When it comes to wages, according to the law, not only the salary from the employment relationship is considered as wages, but also compensation for temporary and occasional jobs, personal earnings of the entrepreneur, as well as various benefits that the employee receives from the employer. Vouchers, goods, services, debt forgiveness, use of an official car for private purposes, an official apartment, as well as certain securities that the employee receives from the employer are also included in the earnings.
The taxpayer for income tax is a natural person who earns income, and the basis for taxation is the earned income less the non-taxable monthly amount of 34.221 dinars for full-time employees.
The bill foresees special tax incentives for newly settled taxpayers and highly qualified experts who come to work in Serbia. Their income tax base can be reduced by 70 percent for five years, provided they meet the prescribed criteria in terms of expertise, salary and tax residency in Serbia. This measure aims to attract professional staff and return people from abroad.
The bill stipulates that wages are taxed at a flat rate of 10 percent.
Who can be released?
A wide range of tax exemptions for employees is prescribed. The tax is not paid on certain allowances for transportation costs, per diems for business trips in the country and abroad, accommodation and transportation costs on business trips, as well as on certain types of assistance to employees. Solidarity aid due to illness, disability or the birth of a child, aid in the event of the death of a family member, New Year's and Christmas gifts for employees' children, jubilee awards, as well as funds intended for the treatment of an employee are also exempted.
The treatment of shares and shares that employees receive from the employer or a related person is specially regulated. Such earnings are tax-free provided the employee holds the shares for at least two years, otherwise they are considered taxable earnings. Tax exemption is also provided for benefits provided by the employer for the purpose of recreation and improving the health of employees.
Some employees in diplomatic and consular missions, international organizations and institutions of the European Union, as well as persons with disabilities employed in companies for their work training and employment, are also exempted from paying salary tax. The law also provides incentives for voluntary health insurance and voluntary pension funds, whereby the tax-free amount is limited to 8.677 dinars per month.
Special tax benefits are intended for the economy. Newly founded innovative companies can be exempted from paying taxes on the salaries of their founders during the first three years of operation, for salaries up to 150.000 dinars per month.
The bill stipulates that the annual personal income tax is paid by natural persons who, during the year, earn more than three times the average annual salary in Serbia. For residents, income earned in the country and abroad is included in the calculation, while for non-residents, only income earned in Serbia is taken into account.
Taxable income includes wages, income from self-employment, copyrights, rental of real estate and movable property, income from athletes, catering services, seafarers and other taxable income. During the calculation, reductions are recognized for already paid taxes and contributions.
People under 40 years of age have a special benefit. With them, the annual sum of certain incomes is additionally reduced by the amount of three average annual salaries, which reduces the base for calculating the annual tax.
Source: Biznis.rs
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