Rulebook on exercise of the right to tax exemption with respect to organizing recreational, sport and similar activities for the employees


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.

Tax exemption from salary tax is envisaged for the expenses incurred for:

  • recreation of employees at work premises; and,
  • reimbursement of costs for collective recreation and for organizing sport and other activities for the employees in order to improve their health and/or create a stronger relationship among employees.

The tax exemption from aforementioned benefits can be only utilized if such benefits are:

  • properly documented;
  • the employer has made the payment directly to the suppliers;
  • defined with the general act of the employer; and,
  • all employees are entitled to the benefits of the same type, volume and quality, as determined in the general act of the employer.

The Rulebook defines more precisely the costs of recreation of employees at work premises (construction/ adaptation of premises and/or purchase of recreational equipment, etc.) and what is considered under compensation of collective recreation costs (lease of sport facilities, use of gym, outdoor / indoor swimming pools, etc.). Additionally, the Rulebook defines the method of tax exemption in case when specific circumstances exist with the employer, inter alia, a large number of employees, physical division of the organizational units, etc.

If the employer has individuals who require specific type, quality and volume of the recreational need, tax exemption would only be granted if this requirement is documented with appropriate medical reports.

In case of organization of sports and other activities that are organized to improve health and/or to create a stronger relationship among employees, and between employees and employer, the Rulebook envisaged that tax exemption could be granted only in case when the right to participate has at least 70% of total number of employees and if at least 70% of employees use this right.