Below are the most important opinions of the Ministry of Finance in the field of corporate income tax, which were published in the previous period.
Tax treatment of assets impairment costs in case of a status change of merger
“… the taxpayer (the company “B”) has booked in its business books (for FY 2017) the cost of the software impairment (which it uses for its business operations), which is not recognized as deductible for the CIT purposes in same tax period in which it has occurred. The taxpayer (the company “B”) intends to merge with another taxpayer (the company “A”) in the status change. By this status change the taxpayer (the company “B”) will transfer total assets and liabilities to another taxpayer (the company “A” as the acquirer) and the taxpayer (the company “B”) will ceases to exist without implementing the liquidation procedure.
When the taxpayer (the company „A“) writes off the assets (the software in specific case) form its business books as it will not use it in its business operations (and which the Company „B“ has impaired and transferred through the status change to the Company „A“), such write off of the software is not considered as the alienation of assets in accordance with Article 22v of the CIT Law. Consequently, the cost of impairment of assets which was not recognized as the deductible for the CIT purposes in the tax period when such cost occurred, is also not recognized in the tax period when such assets (software) is written off from the business books of the taxpayer (the Company „A“).”
(Opinion of the Ministry of Finance, No. 011-00-331/2018-04 dated 31.5.2018.)
Tax treatment of disposals of previously impaired assets
„…the conditions for the recognitions of the impairment costs of the assets (in accordance with the Article 22v, Paragraph 1 of the CIT Law) for the CIT purposes are not met in the tax period in which the taxpayer disposes and writes off from its business books previously impaired assets which is no longer usable, or which cannot or will not be sold (which has not been destroyed in accordance with the regulations governing the protection of the environment).”
(Opinion of the Ministry of Finance, No. 011-00-131/2018-04 dated 30.5.2018.)
Right to reduce CIT for the purpose of determination of advance payments for the following FY, based on the unused tax credit
„…the taxpayer who has an unused tax credit referred to in Article 48, Paragraph 5 of the CIT Law, may reduce the calculated CIT for FY 2017, whereby the data on the amount of unused tax credit should be entered under the No. 5.4. or No. 6.4. of the CIT return (PDP Form in Serbian) if the conditions referred to in Article 48, Paragraph 5 of the CIT Law are met.
However, if the taxpayer, on the basis of an unused tax credit, does not reduce the calculated CIT for FY 2017 (i.e. does not declare the data in the No. 5.4 of the PDP Form), per our opinion, it does not have right to reduce calculated CIT for the purpose of determination of advance payments for FY 2018 i.e. it should not declare data in the No. 6.4 of the PDP Form).“
(Opinion of the Ministry of Finance, No. 413-00-85/2018-04 dated 30.5.2018.)