November 2021

Mazars Tax news for November 2021

It is expected that the National Assembly of the Republic Serbia adopts amendments to the laws in the area of corporate income tax, property tax, personal income tax and social security contributions. The most significant proposed amendments are presented below.

Corporate Income Tax Law

The amendment regarding the Corporate Income Tax Law refers to Article 30 of this Law, which provides the taxpayer with the opportunity to transfer capital gains obtained by transferring intellectual property rights (copyright, rights related to inventions)  under certain conditions to the capital of the resident legal entity, and to not include it in the corporate income tax base, with prescribed conditions that shall be met so that the taxpayer would not lose the right to this tax benefit.

It is proposed that this change be applied for the tax period starting in 2022.

Property Tax Law

The following amendments have been proposed regarding the Property Tax Law:

• the lease of an apartment constituted in accordance with the law regarding planning and construction, as well as the law regarding science and research, is also considered as subject to property tax in accordance with this law,
• the amendment defines the day when property tax obligation arises in the case when one person who is married acquires real estate through a legal procedure;
• in case of transfer of ownership rights on the used motor vehicle, the taxpayer of the transfer tax is the buyer, and if the transfer made between individuals who are not VAT obligors, no tax return is submitted for determining the transfer tax, but the tax is calculated and paid by self-taxation, except in cases for which tax exemption is prescribed (change of traffic license will be done with that evidence);
• the condition for having the mark "rent a car" of the vehicle is lifted for application of tax exemption for the transfer of ownership rights on these vehicles;
• it is proposed to postpone the deadline from which local government units determine, collect and control inheritance tax and gift and transfer tax until January 1, 2023. Until December 31, 2022, the tax on that basis will be determined, collected and controlled by the Tax Administration.

Personal Income Tax Law and Law on Social Security Contributions

Regarding personal income taxes, the following amendments, mainly applicable from January 1, 2022 have been proposed:

• increase of the non-taxable amount of salary from 18,300 to 19,300 Serbian dinars;
• extension of the validity of the reliefs from Article 21c and 21d of the Law until the end of 2022;
• the period of application of the tax exemption based on the salary of new qualified employees is extended by prescribing additional conditions for the continuation for using this right until the end of 2025 (Article 21h of the Law);
• new tax relief for newly employed persons who in the period from January 1, 2019 to February 28, 2022 did not have the status of insured employee, entrepreneur, or founder of the company (Article 21z of the Law - in force from March 1, 2022) ;
• new tax relief for employers (legal entities) who, within their activities, perform research and development on the territory of the Republic of Serbia (Article 21i of the ZPDG - in force since March 1, 2022);
• exemption from capital gains tax for a taxpayer who enters copyright and related rights and industrial property rights as a non-monetary contribution to the capital of a company resident in the Republic of Serbia;
• reduction of income for taxation by annual personal income tax for taxpayers who are under 40 years old;
• exemption from taxation of the income realized by students who perform learning through work as material and financial security.
• The most important proposed amendment to the Law on Social Security Contributions, which will be applied from January 1, 2022 is the reduction of the contribution rate for PIO from 25.5% to 25% (the contribution rate for an employer is reduced by 0.5 %).