Amendments to tax laws

The Ministry of Finance has proposed amendments to the following tax laws: the Personal Income Tax Law, the Law on Mandatory Social Security Contributions, and the Corporate Income Tax Law.

Below, we briefly present the most significant proposed amendments to these laws, which are expected to take effect on 1 January 2027.

Personal Income Tax Law

• The incentive for employing persons with disabilities is proposed to be abolished. Article 21g of the Personal Income Tax Law provides for an exemption from salary tax for employers who employ a person with a disability for an indefinite period, for up to three years from the date of commencement of employment. As of 1 January 2027, this provision will be deleted, meaning that the tax incentive will no longer be available for new employment. Rights acquired by 31 December 2026 will continue to apply until the expiry of the prescribed period.
• The proposed abolition of the incentive for employing new persons registered with the National Employment Service. Article 21d of the Personal Income Tax Law provides for a refund of 75% of the salary tax paid by micro and small legal entities and entrepreneurs who employ at least two new employees from the unemployment register, subject to the prescribed conditions regarding the duration of prior unemployment. The incentive applies exclusively to salaries paid by 31 December 2026. As of 1 January 2027, this tax incentive will cease to apply, and the right to a tax refund on this basis will no longer be available.

Law on Mandatory Social Security Contributions

• Under the proposed amendments, Articles 45, 45b, and 45v of the Law on Mandatory Social Security Contributions are to be repealed, thereby abolishing all employment incentives granted through refunds or exemptions from social security contributions. As a result, reliefs relating to the partial refund of paid contributions for newly employed persons, as well as incentives linked to the employment of persons with disabilities, will cease to apply.
• As of 1 January 2027, these incentives will no longer be available for new employment. The transitional provision applies exclusively to the incentive for employers who started using the exemption by 31 December 2026; employers who began using the exemption after that date may continue to apply it until the expiry of the originally approved period.

Corporate Income Tax Law

• The tax incentive relating to the corporate income tax exemption for enterprises engaged in professional rehabilitation and employment of persons with disabilities is planned for abolition.
• It is proposed to abolish the special tax incentive for concession grantors and the capital gains tax exemption for concessionaires.
• The ten-year corporate income tax exemption for large investments and employment prescribed by Article 50a of the Corporate Income Tax Law has been proposed for abolition. More specifically, the tax relief for investments exceeding RSD 1 billion, combined with the employment of at least 100 newly hired workers (the so-called 10-year tax holiday), would be abolished. In addition, all subsequent articles regulating this incentive in more detail would also be abolished.
• The tax credit for investments in innovation companies (start-up companies), which was prescribed by Article 50j of the Corporate Income Tax Law, is to be abolished.
• The transitional provision relates exclusively to the ten-year corporate income tax exemption for large investments and the tax credit for investments in innovative start-up companies. Taxpayers who have started using these incentives by 31 December 2026, i.e. who have reported them in their 2026 tax balance and tax return, will continue to apply them until the expiry of the approved period, without the possibility of acquiring new rights after that date.

We want to note that the amendments are still in draft form and may change before final adoption.

For any additional questions, the TPA team remains at your disposal.