The new Rulebook has been published in the Official Gazette of the Republic of Serbia No. 50/2019 dated 9 July 2019. This newsletter examines some of the key novelties that the Rulebook brings, such as:
The Rulebook entered into force on 20 July 2019 and regulates the conditions under which a tax exemption can be used in respect of the employee’s income on the basis of own shares, share options in equity of a related party, received without compensation or on preferential terms, from the employer or the employer’s related party.
In order for the employee to use right to tax exemption for received own shares, the following conditions should be met:
- the basis, methods and conditions for acquiring own shares from an employer or employer’s related party should be regulated by a general act, employment contract or other legal act of the employer or the employer’s related party;
- full clarity has to exist regarding acquisition date, qualitative and quantitative elements of the acquired shares, such as type, number, percentage, etc;
- that the employee has not alienated acquired shares before the expiration of 2 (two) years from the day of their acquisition. The sufficient evidence is the statement of the employee given under criminal and material responsibility and the corresponding document from the electronic database of the Central Securities Depository;
- that the employer or employer’s related party has not redeemed its own shares from the employee, which is proved by the statement of the legal representative of the employer or the employer’s related party, given under criminal and material responsibility;
- that the employment relationship was not terminated before the expiration of two years from the day of acquiring the right to dispose of companies’ own shares. The compliance with this condition is proved by the employment agreement and the particular document obtained from the Central Registry of Compulsory Social Insurance.
The above mentioned documentation should be collected on the day of expiration of the second year from the date of acquiring the right to dispose of companies’ own shares, by a person/entity who is, in accordance with the Personal Income Tax Law, obliged to calculate, report and pay the salary tax.