Serbian tax laws amended

Tanja Unguran

On 14 December the Serbian Parliament enacted amendments to a number of tax laws, including in the area of VAT, corporate income tax, and payroll taxes.

Most important change in the area of corporate income tax is the limitation of the types of service income subject to withholding tax. Starting 1 April 2018, only market research, legal and financial consulting services will be subject to withholding tax. Detailed specification of the types of services subject to withholding tax should be made by a regulation to be issued by the Ministry of Finance.

Other changes include a slight extension of the deadline for submission of withholding tax return and payment of withholding tax from one to three days. Rules governing tax depreciation of intangible assets have been changed so as that these assets will be depreciated under proportional method, instead of declining method, as was the case before. Other changes are mostly technical and include precision and slight relaxation of rules governing transfer pricing documentation, and precision of rules governing taxation of profits of companies undergoing liquidation and bankruptcy.

Most important changes in the area of payroll taxes include increase of the non-taxable amount of salary to RSD 15.000. Other important changes include introduction of a new tax incentive for new businesses, extension of the application of the existing incentives for hiring of new employees, and the introduction of tax exemption for certain specific types of donations to natural persons. Rules governing establishment of the base for calculation of social security contributions have been changed so as that relevant amounts will be established on annual basis, instead of monthly as was the case before.

Changes made in the area of VAT include introduction of a new VAT exemption for supplies made within concession agreements and introduction of a special VAT scheme for supplies and import of investment gold. Obligation to submit the report on calculated VAT has been prolonged again to April 2018. Amendments allow deduction of input VAT for supply of meals to taxpayer’s employees in employers’ restaurants, if the supply is made against consideration. Other changes concern the system of refund of VAT to foreign nationals, adjustment of place of supply rules for tourist services and other.

For more information about latest amendments to Serbian tax laws please refer to Ms. Tanja Unguran at tanja.unguran@mim-law.com