Amendments to the several tax laws in Serbia adopted - social security contributions for unemployment born by employer at the rate of 0.75% are cancelled

Belgrado, 03.02.2019.
At the session held in December 2018, the Serbian Parliament adopted amendments to the tax laws which regulate the following areas: personal income tax, corporate income tax, social security contributions, taxation and tax administration, property tax, republic administrative fees.

These amendments were published in the ”Official Gazette of RS”, no. 95/2018 on 9 December 2018 and most provisions came into force on 1 January 2019.

We highlight the most important changes:

Amendments to the Law on Mandatory Social Security Contributions

  • Starting from 1 January 2019, social security contributions for unemployment paid by employer at the rate of 0.75% are canceled.

Amendments to the Law on Personal Income Tax

Tax exemption is introduced based on:

  • employer’s expenditures for recreation of employees at the workplace,
  • compensation of the costs of collective recreation of employees,
  • organizing sports events and activities of employees that are carried out in order to improve the health of employees and / or build better relationships between the employees themselves.

These tax exemptions will be possible after the adoption of the rulebook by the Minister of Finance, which will closely regulate this area.

Amendments to the Law on Corporate Income Tax

New rules on calculation of tax depreciation - starting from 1 January 2019 all fixed assets are depreciated by a proportional method, instead of a degressive method, and each fixed asset is depreciated individually, instead by prescribed group;

The limit for the recognition of expenditures in the tax balance for the advertisement and propaganda is cancelled (previous threshold was 10% of total revenue);

New tax incentives are introduced:

  • Recognition of expenditures in the double amount for profit tax purposes for the costs directly related to the research and development of the taxpayer in Serbia;
  • Exemption from the tax base of the part of the income that the taxpayer earns on the basis of compensation for the exploitation of the deposited copyrighted work or subject-matter of the related right;
  • Recognition of the right to tax credit on the basis of investment in a newly established company engaged in innovation activity.

The possibility to obtain tax credit for the capital gains tax paid abroad is introduced.

Law on Tax Procedure and Tax Administration

The newly formed Games of Chance Administration, starting from 1 March 2019, assumes the competencies of the Tax Administration in the field of games of chance, which were prescribed by the Law on Tax Procedure and Tax Administration