AMENDMENTS TO LAWS
On 25th of November 2024, the National Assembly of the Republic of Serbia adopted draft amendments and supplements to a set of tax laws. Most of the provisions will apply starting from January 1, 2025.
The most significant amendments and supplements to the Personal Income Tax Law and Law on mandatory social security contributions are described below in more details..
Loss of the right to a tax credit on account of the annual personal income tax based on investments in alternative investment funds (AIF)
One of the most significant changes adopted for individuals, taxpayer of annual personal income tax is the introduction of restrictions regarding the alienation of shares in AIF, i.e. the alienation of AIF investment units, which were used for the purpose of tax credit for the annual personal income tax.
Namely, a taxpayer who invests in an AIF, i.e. purchases AIF investment units during a calendar year, is entitled to a tax credit in the amount of 50% of the invested funds. The tax credit cannot reduce the calculated tax by more than 50%.
The newly adopted provisions of the Law stipulate that a taxpayer who disposes shares in AIF i.e. disposes investment units of AIF, in the calendar year in which he made the investment, as well as in the following three years, loses the right to the used tax credit based on that investment. The taxpayer will be obliged to inform the competent tax authority about the loss of the right to the tax credit within 30 days, from the day of the loss of the right, as well as to pay the obligation in the name of the previously used tax credit with accrued interest from the due date for payment of the annual personal income tax for the year in which he lost the right to a tax credit.
The aforementioned limitation will be applied starting from the beginning of the period for determining the annual personal income tax for 2024.
Salary
An increase in the non-taxable amount of salary from January 1, 2025, from RSD 25.000 to RSD 28.423 is prescribed.
Daily allowance
It is stipulated that from January 1, 2025, a non-taxable amount of EUR 90 per day will be applied to daily allowances for business travel abroad instead of EUR 50 per day.
Tax relief for employment of new persons (refund of part of 65% to 75% of paid salary tax and contributions for mandatory social insurance)
An extension of the right to a refund of part of the salary tax and contributions for mandatory social insurance for newly employed persons (who, prior to the establishment of the employment relationship, were registered with the National Employment Service as unemployed persons without interruption for at least 6 months), and that for the salary paid up to and including December 31, 2025.
New taxation method of the seafarers’ income
Starting from 1 January 2025, new taxation method will be implemented for taxation of individuals who earn income from foreign principal, on the basis of work performed on ships and other vessels flying the flag of a foreign country. (Article 84v)
According to the new provision, taxpayer is a individuals who earns income by working as a crew member. The number of days spent on ships and other vessels, as well as the type of work performed by the taxpayer, are proven on the basis of a seaman's book certified by the competent authority.
The amount of income achieved by taxpayer is determined on a daily basis, according to the type of work performed, and in accordance with a by-law issued by the minister responsible for transport, taking into account international standards. The taxable income of a taxpayer, or the tax base, is the sum of the income earned on a daily basis, according to the number of days spent on board a ship, in a calendar year.
Taxpayers may be exempted from paying income tax under this article if they perform work on ships and other vessels for more than 174 days in the calendar year for which the tax is determined and paid.
The deadline for submitting a tax return is 31 March of the current year for income earned in the previous year. Exceptionally, if the taxpayer is on a voyage during that period, then the deadline is 15 days from the first disembarkation.
Furthermore, the amendments to the Law on Mandatory Social Insurance Contributions, which will be in force from 1 January 2025, provide for amendments to the certain articles which determine the contribution bases for mandatory social insurance for persons who earn income by working as crew members or in other jobs on ships and other vessels.