Amendments to tax laws have been adopted

The National Assembly of the Republic of Serbia has adopted laws amending several tax laws on 17 December 2020 including:

• Law on Value Added Tax (accessible via the following link, in Serbian only),
• Law on Corporate Income Tax (accessible via the following link, in Serbian only),
• Law on Personal Income Tax (accessible via the following link, in Serbian only),
• Law on Mandatory Social Security Insurance Contributions (accessible via the following link, in Serbian only).

The laws will enter into force from January 1, 2021, with the exception of the Law on Corporate Income Tax, which will be applied to the determination, calculation and payment of tax liability for 2021, i.e. for the tax period starting in 2021.

The most significant changes within the Law on Value Added Tax relate to the value threshold for the purpose of determining the supply from the field of construction in the amount of RSD 500,000, excluding VAT. Additionally, the invoice form is being explicitly determined for the first time and in addition to paper invoices, the issuance of electronic invoices is also envisaged.

The Law on Corporate Income Tax envisages the most significant changes in the area of ​​taxation of income/profits based on membership in investment funds, taxation of income from digital assets and specification of provisions related to investment incentives.

The most significant changes to the Law on Personal Income Tax are related to the clarification of rules related to taxation of foreigners engaged to work with local employers, the determination of capital income tax and capital gains tax on the basis of investment units in the investment fund and the transfer of digital property rights, as well as defining the employer that can use the exemption from the obligation to pay taxes for salaries paid as of December 31, 2022, for an employer that hires a new employee.

When it comes to the Law on Mandatory Social Security Insurance Contributions, the most significant changes relate to the exemption from the obligation to pay contributions for mandatory pension and disability insurance at the expense of the employee and the employer, for salaries paid as of December 31, 2022, for an employer that hires a new employee (an accompanying change was performed in the Law on Personal Income Tax).