Below are the amendments to the Personal Income Tax Law with effect from 1 January 2021, except for the provisions related to digital property that will apply from the entry into force of the Digital Property Law.
It is envisaged that from 1 January 2021 the non-taxable amount of salary has been increased to 18.300 RSD per month.
It is specified that a qualified employer is considered to be any employer resident of Serbia, who establishes an employment relationship with a newly settled taxpayer who had a residence or centre of business and life interests in the territory of the Serbia for at least three years from the 1990.
The right to use the tax relief for the employment of new persons has been extended, as well as the right to exemption from paying taxes from the salaries of the founders who are employed in the newly established company as of 31 December 2021.
According to the new amendments, the notion of who is considered as an employer who has the right to exemption from salary tax based on the employment of a qualified new employee has been expanded: an entrepreneur, a lump-sum entrepreneur, a legal entity, a representative office, a branch office, a farmer entrepreneur and an individual.
In accordance with the amendments to the Law related to the aforementioned tax reliefs, the provisions of the Law on Social Security Contributions have been amended, extending the employer’s right to a refund, i.e. exemption from paying total social security contributions as of 31 December 2021.
Below are the amendments to the Law related to investment units of alternative investment funds:
- It is defined that the income based on the ownership of the investment unit of the alternative investment fund is also considered as income from capital, except for the fee for the transfer of that investment unit.
- Dividend is also considered to be the remaining net value of the assets of an opened and/or alternative investment fund, that does not have the status of a legal entity, which is distributed to members in proportion to their investment units after the dissolution of that investment fund, and which is above the documented purchase value.
- It is defined that income realized in transfer of an investment unit of alternative investment fund, as well as transfer of digital property, should be taxed by capital gain tax. The tax return on this basis should be submitted within 30 days from the day when the taxpayer has earned or started earning income based on the transfer of investment units.
- The right to a tax exemption based on capital gains tax of 50% is prescribed for a taxpayer who, within the prescribed period of 90 days, invests funds generated by the sale of digital assets in the share capital of a company in Serbia or in the capital of an investment fund whose centre of business and investment activities is located on the territory of Serbia.
- A taxpayer who invests the funds generated by the sale of digital property for the stated purposes within 12 months from the day of sale, may exercise the right to a refund of 50% of the paid capital gain tax in a certain percentage.
- The right to a tax credit for the annual personal income tax is regulated and, may be exercised by a taxpayer who has invested in an alternative investment fund in the calendar year for which the annual personal income tax is determined, as well as, in the purchase of an investment unit of an alternative investment fund. The tax credit cannot exceed 50% of the determined liability based on the annual personal income tax.
By amendments to the Law, it is specified that a person who is on secondment in Serbia, i.e. sent to work for a domestic legal entity, is obliged to calculate and pay taxes on the basis of salary and other income earned by a foreign employer who seconded him to work for a domestic legal entity.
In case that the seconded person does not pay the tax, domestic legal entity is obligated to calculate, withhold and pay tax on the income of the seconded person at the moment of payment of the cost reimbursement related to seconded person’s work to foreign employer, regardless of whether that deadline for paying the tax according to self-taxation principle has expired (30 days from the day of generating income, i.e. salary).
