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The very beginning of 2023 marked the beginning of the implementation of the Law on Amendments to the Law on Personal Income Tax (“Official Gazette of RS”, No. 138/2022), which was adopted in December of the previous year.
This Law changed the existing provisions, namely in those parts that refer to the rate of contributions for mandatory pension and disability insurance, contributions for mandatory social insurance on the income from contracted compensation, the extension of the validity period for new employees’ benefits, as well as the extension of the application deadline on flat-rate taxation. In addition, the Law prescribed two new models of taxation of income from contracted fees for which tax is paid through self-taxation (freelance).
However, the most important change for taxpayers is the method of reporting and paying the annual personal income tax. Starting with the annual tax on incomes generated in 2022, the annual personal income tax will be reported and paid through self-taxation instead of by a decision of the Tax Administration.
More precisely, it is foreseen that firstly the Tax Administration will ex officio post a tax return on the Tax Administration portal based on available data from official records, no later than April 1st of the year following the year for which the annual personal income tax is determined.
As such, a tax return will practically represent a draft, the taxpayer is obliged to make any potential changes and additions to the tax return through the portal of the Tax Administration and after that to submit such a tax return exclusively electronically. Since there were no changes regarding the deadline for submitting the tax return and paying the annual tax, taxpayers are obliged to make both the submission and the payment by May 15th of the following year for the previous calendar year.
In the event that the taxpayer does not submit a tax return within the stipulated period, the Tax Administration will ex officio submit a tax return for that taxpayer in accordance with the available data, but such non-compliance will entail misdemeanor liability in accordance with the provisions of the Law on Tax Procedure and Tax Administration.
In 2023, the aforementioned change will apply to natural persons who generated income in 2022 in the amount greater than 3,719,376 dinars, since that amount represents a non-taxable amount above which the obligation to submit a tax return for the annual personal income tax arises in this year, both for the income of residents of the Republic of Serbia realized on the territory of the Republic and in another country, as well as for the income of non-residents realized on the territory of the Republic.
Although there is a short period of time left until the first application of this amendment to the Law in practice, there are still many open questions regarding the functioning of the procedure itself, such as the fulfillment of certain conditions on the taxpayers part that are necessary in order to be able to submit a tax return electronically (e.g. the existence of a Qualified electronic certificate, which is currently a necessary condition for the taxpayer to access the electronic services of the Tax Administration).
As the procedure itself is not clearly defined for now, and as the Tax Administration itself is still waiting for instructions from the Ministry of Finance, for the time being it is recommended that taxpayers keep abreast of changes in that field, i.e. contact their tax advisers in order to obtain relevant information within the legal deadlines and to be able to submit a tax return in a timely manner.
