Amendments to the Corporate Income Tax (CIT) Law has been published in the Official Gazette of the Republic of Serbia No. 86/2019 dated 6 December 2019. The most important changes are presented below, which will be applied to determine the tax liability starting from2020.
Amendments proposed that revenue of resident taxpayer, established in accordance with the regulations governing investment funds, realized on disposals of assets, shall not be included in the tax base, i.e. the tax payer does not determine capital gain or loss in accordance with the law.
The country reporting for members of an international group of related parties (hereinafter: international group) is included in the Serbian tax legislation as part of the alignment with the BEPS 13 Action Plan. Namely, resident taxpayers who are the ultimate parent entities of international groups of related legal entities will be obliged to submit to the Tax Authority annual report (Country-by-Country Report) on controlled transactions of the international group of related legal entities. The obligation to prepare the report will come into force from 2020 and the annual reports will be submitted within 12 months of the end of the period for which such report is prepared. An international group of related legal entities is a group of entities that are related by ownership or control in terms of IAS or IFRS, and whose total consolidated revenue, reported in the consolidated financial statements for the period preceding the reporting period, is at least 750 million EUR in RSD equivalent at the middle exchange rate of the National Bank of Serbia at the date of adoption of the consolidated financial statements.
It is prescribed the right to use tax credit related to withholding tax on service fee paid in other country for services performed in that other country.
By new amendments, provisions related to tax consolidation are specified, thus it is clearly stated that legal entities that ceased to meet the requirements for tax consolidation before the expiry of the five-year period, or have opted to cease applying tax consolidation, need to include in the tax return, which is filed for the tax period in which the conditions for tax consolidation discontinue to exist, the amount of the incentive used.