1. Amendments to CIT in Serbia
Corporate Income Tax Law (CIT) amendments applicable as of 1 January 2020
- Resident taxpayers who are the ultimate parent entities of international groups of related legal entities will be obliged to submit to the Tax Authority annual report (Country-by-Country Report) on controlled transactions of the international group of related legal entities if total consolidated revenue is at least 750 million EUR;
- Revenue of resident taxpayer, established in accordance with the regulations governing investment funds, realized on disposals of assets, shall not be included in the tax base.
2. Personal Income Tax in Serbia
Personal Income Tax Law (PIT) amendments applicable as of 1 January 2020
- Tax exemption is prescribed for income of a non-resident taxpayer who spends up to 90 days in Republic of Serbia in 12 months if that income is derived from a non-resident principal who does not perform the business activity or other activity in Serbia;
- Salary tax base for the new immigrant taxpayer will be reduced by 70% for a period of 5 years from the date of conclusion of a permanent employment contract with a qualified employer;
- Exemption from payment of tax on founder’s salary who are employed in a newly company that performs an innovative business activity established as of 31 December 2020. The tax exemption may be applied to a monthly salary up to the amount of RSD 150,000 for the founder, for a period of 36 months from the date the company was established (apply from 1 March 2020);
- An employer who employs a qualified new employee is entitled to exemption from paying calculated and withheld tax for the salary paid as until 31 December 2022 if certain conditions are met. tax deduction will be applied as 70% of salary taxes paid in 2020, 65% of salary taxes paid in 2021 and 60% of salary taxes paid in 2022.
- The possibility of lump-sum taxation has also been introduced for taxpayers who perform activities in the field of accounting, bookkeeping, auditing and tax advisory activities;
- Income generated by entrepreneur is gross income that is taxed as other income (20%) without the right to deduct standardized costs if criteria set for income from self-employment are not fulfilled.
3. Social Security Contributions
The Law on Social Security Contributions (SSC) amendments applicable in 2020
- The SSC rate for pension and disability insurance has been reduced, from 26% to 25.5%;
- Exemption of SSC paid by the employer for new immigrant taxpayer (apply from 1 January) and persons who have an employment relationship with a newly established company that performs innovative business activity (apply from 1 March 2020);
- SSC exemption for qualified new employees, employer will realize 100% of SSC for salaries paid in 2020, 95% of SSC for salaries paid in 2021 and 85% of SSC for salaries paid in 2022 (apply from 1 January).
4. VAT in Serbia
Value Added Tax Law (PIT) amendments applicable as of 1 January 2020
Value voucher (single and multi-purpose) is newly introduced instrument for which there is an obligation to acept as compensation for supply of goods or services provided, if data about such supply, provider identity and voucher conditions are indicated in voucher itself or related documentation.
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