Tax Alert, January 2018

2017 non-taxable threshold for annual income tax purposes

Based on the published data on average annual salary per employee paid out in 2017 in the Republic of Serbia from January 26^th, 2018, the non-taxable threshold relevant for determining 2017 annual personal income tax filing liability is set at RSD 2,375,136. Annual income taxpayers for 2017 are natural persons, both tax residents and tax non-residents, whose annual net income for 2017 exceeded the afore-mentioned threshold.

Non–taxable amount, taxable amounts and personal deductions relevant for 2017 annual income tax are presented in the table no. 1.

Table no. 1:

* Total amount of deductions cannot exceed 50% of income to be taxed

2018 adjusted non-taxable amounts in Serbian currency (RSD)

In accordance with the Law on amendments to the Personal Income Tax Law (hereinafter: the Law), published in the "Official Gazette of the Republic of Serbia" no. 113/17 and adjusted amounts in Serbian currency (RSD) published in the “Official Gazette of the Republic of Serbia” no. 7/18, adjusted non-taxable amounts in Serbian currency (RSD) for the year 2018 have been prescribed.

The Law entered into force on January 1^st, 2018 and the new non-taxable salary amount is applied in salary tax calculations and payments starting from the salary paid out for January 2018, whereby the non-taxable salary amount of RSD 11,790 ceases to apply ending with the payment of salary for December 2017.

The non-taxable salary amount, which is applied in salary tax calculations and payments for full-time employees starting from the salary for January 2018, is RSD 15,000.

Table no. 2 displays some of the non-taxable amounts for the purposes of personal income tax, which will be effective from February 1^st, 2018.

Table no. 2: