Government of Serbia has adopted the Regulation amending the Regulation on compensation and severance costs of civil servants and employees, which is applicable from 14 October 2015.
The most important change for the business is that the Regulation significantly reduces the non-taxable part of per-diems for business trip abroad for the majority of the countries, and determines it at unique amount of 15 EUR for each foreign country.
Before 14 October 2015 different non-taxable part of per-diem were prescribed for 144 individual countries (or even cities within the foreign country), so for example:
- Italy: Rome and Turin - 78 EUR,
- Germany: all places - 87 EUR
- Japan: Tokyo - 149 USD
- United States: New York - 101 USD.
The increase of the non-taxable part of per-diem applies only to few foreign countries (e.g. Azerbaijan, except Baku 13 USD; Madagascar 15 USD; Mongolia except Ulan Bator 13 USD).
Tax treatment of the per-diems for the business trip abroad which are higher than non-taxable part remains unchanged, meaning that it is subject to salary tax at rate of 10%, while it is not subject to the social security contributions (SSC). Therefore, despite the reduction of non-taxable part, per-diems paid to the employees have a far more favorable tax treatment than payment of salary (salary is subject to both salary tax at 10% and SSC at an aggregate rate of 37.80%, so total 47.80%; while per-diems are only taxable at the rate of 10%).
The non-taxable part of per-diems for the business trip in Serbia remains unchanged at the amount of 2,168 Serbian dinars (ca 18 EUR).