As of January 1st, 2021. amends of the Law on Personal Income Tax (“Official Gazette of the RS”, No. 153/2020), Law on Corporate Income Tax (“Official Gazette of the RS”, No. 153/2020), Law on Value Added Tax (“Official Gazette of the RS”, No. 153/2020) come into force. (more…)
On November 26th 2020, the National Assembly of the Republic of Serbia adopted Laws on amendment to the Law on Tax Procedure and Tax Administration and Law on the amendments to the Law on Property Taxes, both published in the “Official Gazette of the RS”, No. 144/2020. (more…)
The last two decades were marked by growing business opportunities in the IT domain, softer R&D, advertising, graphic design, etc, which were all supported by the development of digital platforms on the Internet. In this environment it spontaneously became common practice for domestic residents to be employed by foreign companies which are not registered in the Republic of Serbia with the Business registers agency. (more…)
RS Government adopts regulation on delaying deadlines for holding of company assembly, sending financial statements and submitting tax balance sheets (more…)
The Government of the Republic of Serbia adopted on April 10, 2020 the Decree on Program of Financial Support to Business Entities for Maintaining Liquidity and Working Capital in Aggravated Economic Conditions due to the COVID – 19 Pandemic Caused by the Virus SARS-CoV-2 (hereinafter: Decree), which was published on the same day in the “Official Gazette of the Republic of Serbia”, No. 54/2020 and came into force on the following day. (more…)
Adopted regulation on Fiscal benefits and Directive benefits to businesses in the private sector and money assistance to citizens to make effective economic consequences of diseases COVID-19
On April 10, the Government of the Republic of Serbia adopted a Regulation whose main objective is to implement previously planned economic measures to mitigate the economic consequences caused by the COVID-19 disease pandemic. The Regulation itself prescribes fiscal benefits and direct benefits for the private sector that can be realized under the conditions prescribed by this Regulation, as well as direct financial assistance in the amount of 100 euros in dinars equivalent to all adult citizens of the Republic of Serbia. (more…)
After a virus, Corvid-19, began to spread throughout the world, many countries have faced changes both at the social and economic levels.
The global economy expects losses in the coming period, with the first visible negative effects in the next three months, when it is expected that countries will use their resources from pandemic suppression. (more…)
New Draft of Corporate Profit Tax Law: Tax Breaks for the IT sector
Most of the measures relate to tax incentives for companies that have intellectual property registered in Serbia, as well as companies that are engaged in research and development in Serbia.
The Ministry of Finance has published the Draft Law on Amendments to the Law on Corporate Income Tax. This draft has proposed several new measures and the abolition of existing ones, some of which are relevant to IT companies and startups. (more…)
Head of Finance departament Sanja Stevanović-Polovina represented ZS TAX & Consulting at MSI International Conference in Madrid
MSI Global Alliance, one of the world’s leading international associations of independent legal and accounting firms with over 260 member firms in more than 100 countries successfully organized International Conference in Madrid as a host and ZS Tax & Consulting in attendance. (more…)
Test of Entrepreneur’s Independence and Other Novelties incorporated in the Draft Law on Amendments to the Law on Personal Income Tax
The Government of the Republic of Serbia proposed amendments to the current Law on Personal Income Tax (hereinafter: LPIT) which should be adopted by the end of this year. These amendments bring many novelties to our legal system and the most important ones are related to the system of flat-rate taxation of self-employed income, increase of non-taxable amount of earnings and introduction of new employment benefits for certain categories.
Changes to the system of flat-rate taxation of self-employed income
The most significant change that has attracted a lot of public attention in the previous period is the announced change to the system of flat-rate taxation of self-employed income. Namely, the announced changes to the law introduce a so-called test of entrepreneur’s independence.
In cases where an entrepreneur / lump-sum entrepreneur is remunerated on the basis of carrying out activities with a remuneration by the same employer or an employer’s affiliate, criteria for determination of the level of independence of the entrepreneur / lump-sum entrepreneur is introduced.
The criteria mentioned in the draft law are as follows:
- the employer / employer’s affiliate determines the working hours of the entrepreneur / lump-sum entrepreneur and the employer / employer’s affiliate determines when the entrepreneur will take a vacation;
- the entrepreneur / lump-sum entrepreneur uses premises and equipment of the employer / employer’s affiliate for work;
- the employer / employer’s affiliate organizes vocational training for the entrepreneur / lump-sum entrepreneur;
- the employer / employer’s affiliate has hired an entrepreneur / lump-sum entrepreneur by the usage of an advertised job vacancy or through an intermediary (e.g. employment agency);
- the entrepreneur / lump-sum entrepreneur frequently carries out his work in cooperation with other entrepreneurs hired by the same employer / employer’s affiliate;
- the entrepreneur / lump-sum entrepreneur earns a predominant level of income over a 12-month period from one employer / employer’s affiliate;
- the entrepreneur / lump-sum entrepreneur performs activities in the field of the employer’s / employer’s affiliate’s business, and for such activities his hiring contract does not contain a clause under which the entrepreneur / lump-sum entrepreneur bears the usual business risk for the job delivered to the employer’s / employer’s affiliate’s client;
- the entrepreneur’s / lump sum entrepreneur’s hiring contact contains a partial or complete prohibition on the entrepreneur / lump-sum entrepreneur to provide contractual services to other employers; and
- the entrepreneur / lump-sum entrepreneur carries out remunerated activities for the same employer / employer’s affiliate, continuously or intermittently for 130 or more workdays over a period of 12 months.
According to the draft law, if it turns out that the entrepreneur fulfils most of the criteria, or at least five of the nine, then the entrepreneur in this case will pay the tax according to the rules for other income, i.e. in the amount of 20%. Namely, by introducing such legal solution, the legislator has opted to tax the income of these entrepreneurs / lump-sum entrepreneurs through “other income”, where the rate of 20% applies, as opposed to the situation when the employee’s income is taxed through earnings where the rate is 10%. If, however, the entrepreneur does not meet five of the above nine criteria, then the general taxation regime applies.
Increase in non-taxable amount of earnings
One of the significant novelties expected to be introduced by the draft Law on Amendments to the LPIT is the increase of the non-taxable amount of earnings. If the proposed changes are to be adopted, the non-taxable amount of earnings will be RSD 16,300.00 per month compared to the previous RSD 15,300.00. This will reduce the income tax base and therefore the amount of tax.
Lastly, the proposed changes are intended to stimulate employment. In this context, employers are expected to get benefits in the following cases:
- employers representing newly established companies engaged in innovation will get benefits since the proposed changes prescribe exemption from payment of income taxes of founders who are employed in their own newly created companies engaged in innovation, and
- employers who employ a qualified newly employed person will get benefits since the proposed changes prescribe exemption from payment of income taxes of a qualified newly employed person.
In addition, a reduction of the income tax base for persons who get employed and are considered as newly “born” taxpayers in the territory of the Republic of Serbia is proposed. The income tax base in this case is reduced by as much as 70%. This change is intended to motivate natural persons living abroad and whose work, due to their special education, requires domestic employers to settle in Serbia and get employed by a domestic employer.
In the end, the new changes would bring an increase in the non-taxable amount of scholarships and loans for students up to RSD 30,000 per month.
If you have any questions or need further information please contact Ivana Kamenovic, Chief accountant at ZS TAX & Consulting doo, at firstname.lastname@example.org.