Submission of application for environmental protection and improvement for 2023

We remind you that the fee for the protection and improvement of the environment (further: fee) is regulated by the Law on Fees for the Use of Public Goods ("Official Gazette of the RS", No. 95/2018, 49/2019, 86/2019 - harmonized RSD amounts, 156/2020 - harmonized domestic law and 15/2021 - supplement to harmonized domestic law - hereinafter: Law) and the following by-laws:

1) Regulation on the criteria for determining activities that affect the environment according to the degree of negative impact on the environment caused by the performance of activities, the amounts of fees ("Official Gazette of RS", No. 86/2019 and 89/2019 - hereinafter: Regulation);

2) Rulebook on the appearance, content and method of submitting an application with data relevant for determining the fee that the person liable for the fee for protection and improvement of the environment is obliged to submit to the authority of the local self-government unit, i.e. the application that the person liable for the fee for protection and improvement of the environment is obliged to submitted to the competent authority of the local self-government unit, i.e. the city administration, monthly for the collection and delivery of goods during the month ("Official Gazette of RS", No. 93/2019 - hereinafter: Rulebook).

This year's fee is determined according to the unchanged rules compared to the previous year.

Therefore, the fee for the current year 2023. is determined by the decision of the competent authority based on the application - Form 1, which the taxpayers are required to submit no later than 31.07. 2023.

Fee payers, until the obligation for 2023. is determined, have the obligation to pay the fee in advance in equal monthly installments, within 15 days after the end of the month, in the amount of the monthly obligation for the previous year.

1. Fee obligee

The obligee of the fee for the protection and improvement of the environment, according to the provisions of the Law:

1) a legal entity and an entrepreneur that performs certain activities that affect the environment , that is, a natural person that affects the environment;

2) the owner of freight vehicles, i.e. persons who transport oil and oil derivatives, i.e. raw materials, products and semi-products of chemical and other hazardous substances from industry or for industry in the territory of LGUs with the status of endangered environment.

We point out that the by-laws do not regulate closer criteria that are important for the impact of natural persons on the environment, so fee is not determined for natural persons.

The law prescribes the authority to regulate with a by-law (Regulation) closer criteria for determining activities that affect the environment according to the amount of pollution, i.e. the degree of negative impact on the environment caused by the performance of the activity, as well as the amount of fees for certain activities within the amounts prescribed by the Law (the highest compensation amounts are prescribed in Annex 6, Table 2).

Therefore, in accordance with the Law, the Regulation, among other things, activities are classified according to the degree of negative impact on the environment.

According to the Regulation, the criteria for determining the negative impact on the environment of legal entities and entrepreneurs are determined within the framework of the predominant activity performed by the payer.

Therefore, the person liable for the compensation is a legal entity and an entrepreneur who, as a predominant activity, performs one of the activities listed in the Annex to the Regulation, in accordance with the prescribed conditions.

If a legal entity, i.e. an entrepreneur, performs an activity that is not listed in the annex to the Regulation as the main activity, it is not liable for compensation.

The Annex to the Regulation does not include the following branches, i.e. areas from the Classification of Activities:

01.1 Cultivation of annual and biennial plants (grains, vegetables, etc.),
01.2 Cultivation of perennial plants (fruit, etc.),
01.3 Cultivation of planting material,
01.5 Mixed agricultural production,
01.6 Service activities in agriculture and post-harvest activities,
01.7 Hunting, trappering and corresponding service activities,
02.3 Collecting forest fruits,
02.4 Service activities related to forestry,
18 Printing and duplicating audio and video recordings,
19 Production of coke and petroleum derivatives.

In the rest of the text, we remind you of certain specific for whom the Law does not explicitly prescribe whether they are liable for compensation.

In this regard, the payees, according to our opinion and the prevailing behavior of the competent authorities, are:

• associations and other non-profit organizations (so-called other legal entities), bearing in mind that they become a legal entity by being entered in the register, that they are not exempt from the obligation to pay compensation, that they are listed by the Regulation as an activity with a low impact on the environment, as well as that according to the regulations from in the areas of accounting, income from donations, subsidies, and membership fees have the character of business income, so the obligation to pay fees can also be incurred by those associations that only generate income from membership fees;
• a company in the process of bankruptcy or liquidation, given that it continues to perform an activity, as well as that it is obliged to prepare and submit regular financial reports;
• lump-sum entrepreneur, bearing in mind that the Law does not prescribe an exception for such a method of taxation, as well as that he generates income by performing a registered activity, and according to the Regulation he belongs to the category of micro taxpayers;
• a branch of a foreign company because it performs a registered activity on the territory of the Republic of Serbia in the name and on behalf of a foreign company and has the same impact on the environment as legal entities and entrepreneurs who perform the same activity, although it is not specifically listed as a payer in the Law. Namely, a branch of a foreign company is a separate organizational part of a foreign company that performs its activities through a branch on the territory of the Republic of Serbia;
• an entrepreneur who temporarily deregistered his activity, in accordance with the law for the period in which he performed his activity;
• a legal entity, that is, an entrepreneur who, during the period for which compensation is determined, stops performing activities, for the period of performance of activities;
• newly established taxpayer, for the period of performance of the activity.

1.2 Legal entities and entrepreneurs who are not liable for compensation

Unlike the previously mentioned specific cases that are liable for compensation, below we list certain cases in which legal entities, i.e. entrepreneurs, are not liable for compensation:

-Legal entity, that is, an entrepreneur whose main activity is one of the activities that are not prescribed by the Regulation as activities with an impact on the environment;

-Registered agricultural holding (it has the status of an entrepreneur according to the law regulating the income of citizens) considering that the activity, i.e. the predominant activity, is not registered in the register of agricultural holdings maintained by the Administration for Agrarian Payments;

-Natural person who is liable for VAT (he has the status of an entrepreneur according to the law regulating the income of citizens for the purpose of taxation of realized income) since from the aspect of the law he has the status of a natural person because he does not have a registered activity, and he does not perform the activity of a liberal profession, so in terms of the law which they are regulated by commercial companies, they do not have the status of entrepreneurs;

-Inactive legal entities, bearing in mind that they do not perform the activity for which they have registered, and therefore do not influence the environment by performing their activity, but we indicate that they should submit a statement of inactivity to the competent authority;

-Entrepreneur who has registered the interruption of activity (temporarily deregistered activity), in accordance with the law, for the duration of the temporary deregistration, while we note that in case of continuation of activity, he has the obligation to submit an application within 15 days from the day of registration of the new start of activity;

-Beneficiaries of budget funds, residential buildings, mandatory social insurance organizations, as well as churches and religious communities, except in the part of performing economic or other activities, are not liable for the fee in question in terms of the Regulation, bearing in mind that they are not registered with the Agency for Economic Registers, except for churches and religious communities in the performance of economic or other activities, as well as that the provisions of the Accounting Act are not applied to the aforementioned persons.

In addition to the above, we note that the representative office of a foreign legal entity is not liable for compensation because the foreign legal entity does not perform activities through a branch, the branch does not have a registered predominant activity on the territory of the Republic of Serbia, that is, it does not perform activities on the territory of the Republic of Serbia.

2. Obligations of the fee payer

Payees in accordance with the Law are obliged to:

- to submit an application on Form 1, no later than 31.07. in the current year;
- to pay the fee in advance by the 15th of the month for the previous month, in the amount of the monthly obligation for the previous year;
- to settle the less paid amount of advance payments within 15 days from the delivery of the decision determining the payment obligation for the current year;
- submit a change in data relevant to the determination of compensation within 15 days from the date of the change.

The fee is paid to the prescribed payment account number: 840-714562843-56. In the call to the number, enter the data specified in the decision of the competent authority.

3. Submitting an application on Form 1

The Rulebook prescribes the forms for submitting an application in which data relevant to the determination of the fee are presented.

The application on Form 1 can be submitted in electronic form, through the portal of LTA (Local Tax Authorities).

Please note that the same data is entered in Form 1 for all municipalities, regardless of the fact that the taxpayer may perform different activities, or to a different extent, in the territory of different municipalities.

3.1. Entering data on the main activity

The predominant activity, in the sense of the Regulation, is considered to be:

1) activity that is registered with APR, that is
2) the activity from which the legal entity and entrepreneur achieved the most income in the year preceding the year for which the fee for the protection and improvement of the environment is determined.

3.2. Presentation of data on the degree of negative impact on the environment

In the Annex to the Regulation, activities are classified according to the degree of negative impact on the environment into activities that have:

1) large impact on the environment.
2) medium impact on the environment, or
3) low impact on the environment and listed according to the appropriate classification category (sector, area, branch, and group), in accordance with the Law on Classification of Activities.

When the taxpayer generates the most income from the activity that is registered with APR, he enters the impact of that activity on the environment.

If the taxpayer generated the most income in the previous year from an activity that was not registered as such with the authority responsible for registration, the impact of that activity (from which the highest income was generated in the previous year) on the environment is entered in this field.

The obligor determines the impact on the environment based on the degree of impact in which the code of the predominant activity performed according to the Annex to the Regulation is classified and enters in the field Degree of negative impact of the activity of the legal entity or entrepreneur according to the predominant activity.

3.3. Disclosure of data on business income

In the field Business income of a legal entity or entrepreneur realized in the year preceding the year for which the compensation is determined - information on the full amount of business income from business books in dinars is entered (it is not entered in thousands of dinars).

3.4. Disclosure of information on local self-government units in whose territory the obligee performs activities

If the oblige performs activities in the territory of several LGUs, he submits the application to the competent authority in the territory of all LGUs where he performs the activity.

The activity implies the performance of activities through separate organizational units, that is, facilities located on the territory of LGUs (such as, for example, retail facilities, warehouses, distribution centers).

3.5. Submitting an application due to the change of data relevant to the determination of compensation

According to Article 138, paragraph 3 of the Law, the application is also submitted in the event of a change in data that affects the determination of compensation, within 15 days from the date of the change.

4. Amount of compensation

Fee amounts are determined based on two criteria:

- the level of impact on the environment, which depends on the activity;
- the size into which the taxpayer is classified in accordance with accounting regulations.

Below please find a tabular representation of the prescribed amounts of fees. The amounts are prescribed for the calendar year and expressed in dinars (not in thousands of dinars).