Business stimulations :-: Tax incentives
| A 10-year corporate profit tax holiday for investment over € 8.5 million and 100 new employees | Salary tax exemptions for employees under 30 and over 45 years |
|---|---|
| Corporate profit for medium and large entities tax credits up to 20% of fixed assets investment, maximum up to 33% of the total tax liability | Annual income tax deductions up to 50% of the taxable income |
| Corporate profit for small entities tax credits up to 40% of the fixed assets investment, maximum up to 70% of the total tax liability | Customs-free imports of equipment based on foreign investment |
| Carrying forward of losses over a period up to 5 years | Carrying forward of losses over a period up to 5 years |
TAX HOLIDAYS
Companies are exempt from corporate profit tax for a period of 10 years, starting from the first year in which they report taxable profit, provided that:
1. They invest in fixed assets an amount exceeding RSD 1 billion (approximately €8.5 million);
2. Throughout the investment period they employ at least 100 additional employees on an indefinite contract.
TAX CREDITS
The amount of tax due can be reduced by 20% of the amount invested in fixed assets for the respective tax period. This reduction cannot exceed 33% of the total tax liability. If not used entirely in the course of one year, this tax credit can be carried forward for a maximum period of 10 years. For small companies, a tax credit is also granted for fixed assets in the amount of 40% of the investment made in the current year. The credit may not exceed 70% of the tax due. The taxpayer generating profit in a newly established unit in an underdeveloped region will receive a tax credit for a period of 2 years in an amount proportionate to the profit of that unit in the total profit of the company.
CARRYING FORWARD OF LOSSES
Serbian tax law allows the tax loss stated in the tax return to be carried forward and offset against future profits over a period of up to 5 years.
SOCIAL INSURANCE CONTRIBUTIONS
The employer is exempt from paying social insurance contributions over the following period:
| 3 years |
|---|
| For apprentices aged under 30 who have been declared as unemployed by National Agency for Employment |
| For disabled persons |
| 2 years |
| For persons aged under 30 who have been declared as unemployed by National Agency for Employment for no less than 3 months |
| For persons aged 50 or older who have been declared as unemployed by the National Agency for Employment for no less than 6 months, and received compensation for unemployment |
| For employees aged between 45 and 50 (an 80% exemption) |
PERSONAL INCOME TAX
Personal income tax in Serbia is 10%.
Salary tax is not payable on any employee’s receipts based on the following:
- Public transport allowance (to and from the place of work);
- Meal allowance on business trips in the country and per diem allowance on business trips abroad;
- Accommodation allowance on business trips, against presented bills;
- Transport allowance on business trips against public carrier bills and when the use of the employee’s own motorcar for business trips or other business purposes is permitted under laws and regulations;
- Solidarity relief in the event of sickness, medical rehabilitation or disability of an employee or member of his/her family;
- New Year and Christmas presents for employees’ children aged up to 15;
- Awards for employees;
- The salary tax base is deducted by circa cca €100 a month for an employee working full working hours.
An employer who employs new workers for an indefinite period is exempt from paying salary tax for newly employed workers over the following period:
| 3 years |
|---|
| For apprentices aged under 30 who have been declared as unemployed by National Agency for Employment |
| For disabled persons |
| 2 years |
| For persons aged under 30 who have been declared as unemployed by National Agency for Employment for no less than 3 months |
| For persons aged 45 or older who have been declared as unemployed by National Agency for Employment for no less than 6 months or receive salary compensations |