Archive for category: News

The User’s manual for electronic recording of VAT calculations in SEF has been finally published.
After the amendments to the Rulebook on VAT and the Rulebook on electronic invoicing, which have been in effect since January 1, 2024, on the website of the Ministry of Finance (www.efaktura.gov.rs) On January 4, 2024, the User’s Guide for the electronic recording of VAT calculations in SEF was published. You can download the User manual here.

Dear all,

As the holiday season approaches, below you can see the public holidays in January and February 2024.

In January and February 2024, the following state holidays will be observed:

New Year: January 1st and 2nd (Monday and Tuesday) – New Year’s holiday, which falls on Monday and Tuesday in 2024, will be observed as non-working days. Statehood Day (Sretenje): February 15th and 16th (Thursday and Friday) – Statehood Day, being on Thursday and Friday in 2024, will be observed as a non-working day. In January and February 2024, the following religious holidays will be observed:

Christmas: January 7th (Sunday) – Christmas on Sunday in 2024, will be observed as a non-working day. However, since it is a religious holiday celebrated on the actual day, unfortunately, there is no adjustment to a non-working day on Monday, January 8th. Catholics and other Christians celebrating Christmas according to the Gregorian calendar will observe Christmas on December 25th, 2023 (Monday), and they are entitled to a day off.

Saint Sava (Spirituality Day): January 27th (Saturday) – Saint Sava’s Day, being on Saturday in 2024, will be observed as a working day if Saturday is a regular working day according to the work schedule. In January and February, Orthodox believers celebrating their patron saint on any day in January or February are entitled to a day off.

In accordance with Article 114, paragraph 1 of the Labor Law, employees are entitled to receive compensation in the amount of the average wage over the past 12 months for the time of absence from work on a public holiday that is a non-working day.

In accordance with Article 108, paragraph 1, point 1) of the Labor Law, employees are entitled to an increased wage determined by the general act and employment contract for working on a public holiday that is a non-working day – at least 110% of the base.

Happy upcoming holidays from Kreston MDM!

We are thrilled to announce the signing of an exclusive partnership agreement with Lentink De Jonge Accountants & Adviseurs. This collaboration will bring together our expertise within the Kreston Global network, focusing on audit and assurance-related services. The partnership entails KRESTON MDM’s support for national and international audit assignments of Dutch member firm.

A key aspect of this partnership involves the mutual exchange of knowledge and innovation. Lentink De Jonge Accountants & Adviseurs will be providing support to KRESTON MDM in the advancement of data analytical technologies.

By joining forces, we are not only expanding the capacity of the Dutch audit practice and the capacity of Serbian tech expertise but also breaking boundaries within the Kreston Global community. This partnership showcases the limitless potential of collaboration between members across borders.

The Minister of Finance issued the Rulebook on Amendments and Supplements to the Rulebook on Tax Returns on Calculated Tax through Self-Taxation and Associated Contributions to Earnings, i.e. other types of income from a natural person as a taxpayer (“Official Gazette of the RS”, No. 21/2023), which entered into force on March 25, 2023 (hereinafter: Rulebook).

The rulebook introduced a new tax return on the PP OPO-K form – Tax return on calculated tax through self-taxation and related contributions on income generated quarterly, by a natural person as a taxpayer, which will be submitted by natural persons, so-called freelancers, i.e. natural persons who earn income from the contracted fee from copyright and related rights and income from the contracted fee for the work performed, in a situation where the tax is determined according to the self-taxation system (when they earn income from persons who, when paying, do not have the obligation to calculate taxes and contributions in Serbia).
Namely, the new tax return of PP OPO-K was introduced considering that in the system of taxation of citizens’ income from January 1, 2023, in the application of two new models of quarterly taxation, two incomes are mentioned.
Natural persons as taxpayers, who declare and pay their tax liability quarterly (for income generated in a period of 3 months), according to the self-taxation system, submit an application on the PP OPO-K form for the income they have generated starting from the second quarter (from 1. April 2023 until June 30, 2023). The deadline for submitting the application is 30 days from the end of the quarter (for the second quarter, the PP OPO-K application must be submitted no later than July 31, because July 30 falls on a Sunday – a non-working day).
When it comes to the income they earn in the first quarter (from January 1, 2023 to March 31, 2023), taxpayers have 2 options at their disposal:

• The application can be submitted on the PP OPO-K form, with the proviso that in that case the deadline for submitting the application is not 30 days from the day the first quarter has expired, but the deadline is 30 days from the next day in relation to the day when the technical conditions for submitting the application are met on the PP OPO-K form;
• The application can be submitted on the PP OPO form, and in that case the deadline for submitting the application is 30 days from the end of the first quarter.
  

The reason for this situation is the fact that the technical support for submitting an application on the PP OPO-K form is still being prepared. It is expected that the technical support will be operational soon, and a notice will be posted on the website of the Ministry of Finance and the Tax Administration when the technical support becomes operational.
Technical support should make it easier for natural persons to submit an application on the PP OPO-K form, while the technical support service will not be available for submitting an application on the PP OPO form.

It is expected that the user manual will be published soon, as well as explanations regarding the submission and filling out of applications on the PP OPO and PP OPO-K forms.

Here is the list of the key amendments to the Law on Electronic Invoicing and the Law on Fiscalization:

Electronic invoicing (changes take effect on 1.1.2023):

• It has been introduced that an eInvoice that has been rejected can be subsequently accepted (for eInvoices recorded in the CRF, this provision will be applied from June 1, 2023)
• The obligation to issue an eInvoice for the sale of goods and services free of charge has been abolished
• It is specified that the provisions of this law do not apply to natural persons who are not liable for income tax from self-employment
• The definition of the term “public sector subject” has been harmonized
• If there is a temporary interruption in the work of the SEF, the eInvoice is considered delivered at the time of the re-establishment of the electronic invoice system.
• It has been clarified which entities have the obligation to register VAT electronically in the SEF. Namely, persons who are considered tax debtors (in terms of the VAT Act), but who are not in the VAT system and have not registered as voluntary beneficiaries, are exempt.

Fiscalization (changes entered into force on 20.12.2022):

• The connection of SUF and SEF was introduced, so that the data contained in the Fiscalization Management System (SUF) related to fiscal invoices issued to legal entities, i.e. self-employed income tax payers, are transferred to the System of Electronic Invoices (SEF) – a secondary legal act will be adopted within 180 days from the date of entry into force of this law
• Another exception to the rule has been introduced, which refers to the mandatory use of at least one electronic fiscal device that uses its own fiscal account processor in a retail establishment. This includes taxpayers who are subject to fiscalisation, who occasionally carry out retail sales of their own used movable tangible assets.
• It is defined that the turnover of goods and services that the taxpayer is subject to fiscalization to legal entities, i.e. taxpayers of income tax from self-employment, outside their retail establishment is not considered retail turnover

Based on Article 61, Paragraph 3 of the Law on Corporate Income Tax, the Minister of Finance adopted the Rulebook on interest rates that are considered to be in line with the “arm’s length” principle for the year 2022:
According to Article 2 of this rulebook:

1) for banks and providers of financial leasing:

(1) 0.50% on short-term loans in RSD;
(2) 2.86% on long-term loans in RSD;
(3) 2.75% on loans in EUR and dinar loans indexed in EUR;
(4) 3.91% on loans in USD and dinar loans indexed in USD;
(5) 2.61% on CHF loans and dinar loans indexed to CHF;
(6) 3.96% on loans in SEK and dinar loans indexed in SEK;
(7) 1.88% on loans in GBP and dinar loans indexed in GBP;
(8) 2.31% on loans in RUB and dinar loans indexed in RUB;

2) for other companies:

(1) 3.12% on short-term loans in RSD;
(2) 3.39% on long-term loans in RSD;
(3) 2.25% on short-term loans in EUR and dinar loans indexed in EUR;
(4) 2.73% on long-term loans in EUR and dinar loans indexed in EUR;
(5) 6.94% on short-term loans in CHF and dinar loans indexed in CHF;
(6) 1.85% on short-term loans in USD and dinar loans indexed in USD;
(7) 3.54% on long-term loans in USD and dinar loans indexed in USD.

Interest rates also apply to loans.

A new edition of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations was published in 2022.

The new release contains the following changes:

• In Chapter II, which refers to the application of profit split method, it is explained exactly where the profit sharing method is applicable
• In Chapter VI, an annex was added that refers to hard to value intangibles
• A new chapter X is added which is related to financial transactions

The Tax Administration is 27.6.2022. published a Notice on the calculation of depreciation of fixed assets, which contains an example of calculation and presentation of data in the OA Form.

The calculation of depreciation of fixed assets in the manner prescribed by Article 10 of the Law on Corporate Income Tax is applied in accordance with Article 14 of the Law on Amendments to the Law on Corporate Income Tax on Fixed Assets Acquired as of December 31, 2018. year, ie concluding with the last day of the tax period that begins in 2018, and for fixed assets classified in groups II-V at the latest on the calculation of depreciation of these assets as of 31.12.2028. year, ie the last day of the tax period that begins in 2028.

If, by applying the above rule, the final balance is determined in an amount less than the amount obtained by applying the rate:

of 10% for group II,

rates of 15% for group III,

rates of 20% for group IV, and

rates of 30% for group V,

on the balance determined on 31.12.2018. year, ie on the last day of the tax period starting in 2018, the entire balance of the group is recognized as a depreciation expense, due to which the amount in column 7 of the OA form is equal to the unwritten value from column 5, while in column 8 the value is zero. The opening balance at the beginning of the following year is equal to the carrying amount at the end of the previous year.

At the end of April, the regulations were changed in such a way that cash, payment cards, check and instant payment are considered cash for the purposes of fiscalization.

However, on May 12, 2022, the Minister of Finance amended that part of the rulebook again, and published the Official Gazette on the same day, so that it came into force on May 13, 2022. According to the new change, the old change is valid only for those who hand over food and beverage services for consumption on the spot in terms of regulations governing value added tax and food and beverage sales in the bakery (caterers and bakers).

For all other taxpayers, cash is not considered instant payment, payment card and check, so there are the following methods of payment for them:

1) CASH – if payment is made in cash (banknotes and coins)

2) INSTANT PAYMENT by instant transfer of approval at the point of sale

3) PAYMENT CARD – if payment is made by payment card

4) CHECK – if payment is made by check

5) TRANSFER TO ACCOUNT – if payment is made by payment order or transfer order

6) VOUCHER – if payment is made by voucher, money vouchers, internal cards or similar means of payment

7) OTHER NON-CASH PAYMENT – if the payment is made non-cash by another means of payment that is considered allowed in the Republic of Serbia, in accordance with the law.

Amendments to the Rulebook on Fiscal Accounts entered into force on the day of publication in the Official Gazette. glasnik RS, No. 50/22 of 28 April 2022.
According to the amended Article 6, paragraph 1, item 1) of the Ordinance, the taxpayer, via an electronic fiscal device, within the data on the method of payment on the fiscal account, depending on the means of payment by which the buyer pays for delivered goods or services, states CASH if payment performs:
• cash (banknotes and coins),
• instant transfer of approval at the point of sale,
• payment card and
• check.

Therefore, the taxpayer through the electronic fiscal device, within the data on the method of payment, on the fiscal invoice states one of the following data, depending on the means of payment:
• cash – if payment is made in cash, instant transfer of approval at the point of sale, payment card and check
• transfer to account – if payment is made by payment order or transfer order
• voucher – if payment is made by voucher, voucher, internal card or similar means of payment
• other non-cash payment – if the payment is made non-cash by another means of payment that is considered allowed in the Republic of Serbia.

In case the customer pays using more than one method of payment, the taxpayer, through the electronic fiscal device, within the data on the method of payment, may specify more data on the fiscal invoice, and is obliged to show the amounts paid divided by individual methods. payments.

Also, the Decree on determining the activities for which there is no obligation to record retail trade via electronic fiscal device was amended, which extended the transitional period for sellers on market stalls and similar facilities during which they have no obligation to record retail turnover via electronic fiscal device until the end of 2022.

Due to the extremely large number of requests received so far for approval of the List of categories of archival material and documentary material with retention periods, as well as approaching the legal deadline for submitting transcripts of archival books, and due to lack of adequate technical and personnel capacity, the Historical Archive of Belgrade until further notice, it receives new documentation, in the only way applied so far – exclusively in writing.

In order to adequately solve this problem, at the moment, in cooperation with eGovernment, we are working on establishing an adequate e-service that will receive documentation in electronic form.

Until all creators and holders have the opportunity to submit the mentioned documentation related to the Law on Archival Material and Archival Activities, the Archives of Belgrade will not implement the punitive measures specified by the Law on this issue.

Requests received so far are continuously processed and delivered in accordance with the mentioned possibilities.

A new demo version of the Electronic Invoice System is available at: demoefaktura.mfin.gov.rs
All private sector entities are invited to register for the new demo version of the Electronic Invoice System.
The production version of the Electronic Invoice System is available at: efaktura.mfin.gov.rs
From the moment of registration, they apply all rights and obligations prescribed by the Law on Electronic Invoicing (“Official Gazette of RS”, No. 44/21 and 129/21). Among other things, this means that all sent and received electronic invoices have the status of authentic documents.

Important notes:
The generated API key refers exclusively to the environment in which it was generated.

All additional information related to:

1. Updated internal technical manual
2. Updated specification of the adapted application of standard EN 16931-1
3. Updated examples of XML files according to UBL1 standard
   They can be downloaded from the section Instructions / Instructions and Specifications of the portal www.efaktura.gov.rs

A new Information System of the Agency for Receipt, Processing and Public Disclosure of Financial Statements was launched

All interested parties are informed that today, January 31, 2022, a new Special Information System of the Agency for Receipt, Processing and Public Disclosure of Financial Reports, ie Documentation (PIS FI Agency) was launched.

With the construction of that system, the Agency has adopted a new way of financial reporting which, in accordance with the new Law on Accounting, is applied starting from the financial reports prepared on 31.12.2021. years and later, as well as certain requests of users for the improvement of certain functionalities of the previous system, which would facilitate the procedure for submitting financial reports, ie documentation to taxpayers, as well as bookkeepers.

Link to approach the application for financial reports submission:

https://reid.apr.gov.rs/IDF/?wa=wsignin1.0&wtrealm=https%3a%2f%2ffin.apr.gov.rs%2fFiEksterna%2f&wctx=rm%3d0%26id%3dpassive%26ru%3d%252fFiEksterna%252f&wct=2022-01-31T19%3a18%3a46Z

The Government of the Republic of Serbia has passed a new Decree on the content, form and manner of submitting an application for compulsory social insurance by methodological principles and a unifiedcoding system for entering data into a single database of the Central Register of Compulsory Social Insurance.
The decree was published in the “Official Gazette of RS”, number 132/2021 and has been valid since January 7, 2022.
An integral part of the Decree are the new unified coding system, new forms M and M-A and the List of evidence on the basis of which the status of the insured, ie the insured person, changes in insurance and termination of the status of the insured are determined.

Link: The Decree

The Rulebook on Amendments to the Rulebook on Value Added Tax was published in the “Official Gazette of RS”, number 127 of 24.12.2021.
Amendments to the Rulebook were made in order to comply with the regulations in the field of fiscalization and electronic invoicing concerning the issuance of invoices.
Amendments to the Ordinance enter into force on 25.12.2021.
The most important amendments concern the following:

• The new obligatory element of the advance invoice is the date of receipt of the advance;
• Fiscal invoice containing data on the personal income tax of the recipient of the fiscal invoice is considered an invoice issued in accordance with the VAT Act and can serve as a basis for exercising the right to deduct previous tax;
• An electronic invoice issued through a system of electronic invoices is considered an invoice in the sense of ZPDV, although it does not contain information on the place of issuance;
• An invoice issued to a foreign traveler for the purpose of VAT refund for the sale of goods sent abroad in personal luggage that he carries with him for non-commercial purposes, is also considered a fiscal invoice issued in accordance with the Law on Fiscalization;
• For VAT refund, diplomatic and consular missions and international organizations are issued a fiscal invoice on which the PIB of the right holder is stated.

Detailed explanations of the amendments to the Ordinance on VAT:
Link: Tax Alert

Average gross salaries and wages calculated for October 2021 amounted to 91 132 RSD, while average net salaries and wages amounted to 66 048 RSD.

Increase of gross salaries and wages in the period January – October 2021, relative to the same period last year amounted to 8.2% in nominal terms, i.e. 5.7% in real terms. Simultaneously, net salaries and wages increased by 8.9% in nominal terms and by 5.3% in real terms. 

Compared with the same month last year, average gross salaries and wages for October 2021 increased by 9.7% in nominal terms and by 2.9% in real terms, while average net salaries and wages increased by 9.9% in nominal terms and by 3.1% in real terms.

Median net salaries and wages for October 2021 amounted to 50 000 RSD, meaning that 50% of employees realized wages and salaries up to the mentioned amount.

SOURCE: Statistical Office of the Republic of Serbia

The obligation and way of conducting the stocktaking are regulated by the Law on Accounting (“Official Gazette of RS”, No. 73/2019 and 44/2021 – other law) and the Rulebook on the manner and deadlines for conducting the stocktaking and synchronizing the bookkeeping situation with the actual situation (RS Gazette, No. 89/2020).

• The deadline for submitting the Regular Census Report for 2021 for adoption is January 30, 2022.
• The deadline for the adoption of the Decision on the adoption of the Report on the conducted regular stocktaking for 2021 is January 30, 2022.
• The calculation of VAT on determined deficits is done in the calculation of VAT for the month of January 2022

September 24, 2021/in News /by krestonmdm

Average gross salaries and wages calculated for September 2021 amounted to 89 980 RSD, while average net salaries and wages amounted to 65 218 RSD.

Increase of gross salaries and wages in the period January – September 2021, relative to the same period last year amounted to 8.6% in nominal terms, i.e. 5.4% in real terms. Simultaneously, net salaries and wages increased by 8.8% in nominal terms and by 5.6% in real terms. 

Compared with the same month last year, average gross salaries and wages for September 2021 increased by 9.0% in nominal terms and by 3.1% in real terms, while average net salaries and wages increased by 9.2% in nominal terms and by 3.3% in real terms.

Median net salaries and wages for September 2021 amounted to 50 000 RSD, meaning that 50% of employees realised wages and salaries up to the mentioned amount.

SOURCE: Statistical Office of the Republic of Serbia

The “Official Gazette of RS”, number 99 from 22.10.2021. has published The Rulebook on Amendments to the Rulebook on Filing Tax Reports Electronically, which amended the PEP form (added the item 4.6 for authorization of fiscalization).

This amendment enables economic entities to authorize the submission of applications related to fiscalization and take over the security element without authorizing other types of tax returns.

The amended PEP form is valid from October 30, 2021.

Average gross salaries and wages calculated for July 2021 amounted to 89 330 RSD, while average net salaries and wages amounted to 64 731 RSD.

Increase of gross salaries and wages in the period January – July 2021, relative to the same period last year amounted to 8.2% in nominal terms, i.e. 5.7% in real terms. Simultaneously, net salaries and wages increased by 8.5% in nominal terms and by 6.0% in real terms. 

Compared with the same month last year, average gross salaries and wages for July 2021 increased by 7.6% in nominal terms and by 4.2% in real terms, while average net salaries and wages increased by 7.8% in nominal terms and by 4.4% in real terms.

Median net salaries and wages for July 2021 amounted to 49 999 RSD, meaning that 50% of employees realised wages and salaries up to the mentioned amount.

SOURCE: Statistical Office of the Republic of Serbia

In its decisions on May 7, 21 and 28, the Constitutional Court of the Republic of Serbia declared certain parts of the Law on Financial Support to Families with Children Unconstitutional, which was the reason for the Ministry of Family Care and Demography to prepare a proposal for amendments to the law. The Assembly of the Republic of Serbia, which has been in force since July 1, 2021. years.

Every employed woman during maternity leave, which starts 28 days before pregnancy due date, and exceptionally according to the doctor’s findings 45 days before the due date for childbirth up to three months of the child’s life, receives salary compensation during maternity leave, which cannot be less than the minimum wage on the day of the leave. The condition is to have at least one recorded base on which salary contributions are paid. Previously, in order to exercise this right, at least six bases on which salary contributions were paid were required.

The changes also apply to employed mothers who have a sick child, for whom the competent commission has approved the use of leave for special child care, who will be able to use the salary allowance with the allowance that belongs to them on the basis of the right to assistance and care of a child. The right to special child care can last until the child is five years old.

With the new provisions, women agricultural insurers are also in a more favorable position, as they can exercise the right to other benefits based on birth, care and special child care. The bases on which the contributions for pension and disability insurance were paid in the 18 months preceding the birth of the child will be taken for the calculation of the compensation. This provision will have retroactive effect from May 8, 2021.

In accordance with the amendments to the Law of 1.1.2022, employed women, women who are self-employed or engaged on the basis of flexible forms of work, and earn incomes that are higher than three average salaries in Serbia, will be able to receive salary compensation and other benefits in the amount of up to five average salaries on the day of leave (so far, the maximum has been three average salaries).

The Ministry of Finance has published the Draft Law on Amendments to the Law on Tax Procedure and Tax Administration.

These changes, among other things, stipulate that the tax return on calculated contributions for compulsory social insurance for founders, ie members of a company (PP OD-O), will be submitted ex officio.

Following the Article 41a, a new Article 41b has been added to the LCPPA, which reads:
“Tax return on calculated contributions for compulsory social insurance for founders, i.e. members of a company, must be ex officio submitted by the Tax Administration instead of the taxpayer, in case the taxpayer fails to submit it within the period prescribed by the law which regulates the compulsory social security contributions.”

Suggestions and remarks can be submitted to the Sector for Fiscal System via e-mail to the address: [email protected] no later than September 14, 2021.

Average gross salaries and wages calculated for June 2021 amounted to 89.793 RSD, while average net salaries and wages amounted to 65.070 RSD.

Statistical Release, 25.08.2021.

From the financial reports prepared for 2021, the Rulebook is applied by all legal entities and entrepreneurs who have the obligation to apply double-entry accounting, except for legal entities which, by definition from the Law, are classified as large (banks, etc.) and other legal entities. The Rulebook is also applied by other legal entities, which decide to evaluate positions in the financial statements in accordance with IAS / IFRS or IFRS for SMEs. Another legal entity, by its general act (in practice it is usually the Rulebook on Accounting and Accounting Policies) regulates the manner in which it will perform the recognition, valuation of presentation and disclosure of positions in the financial statements. Transferring from old accounts to new ones should be done no later than December 31, 2021. We recommend to do so as early as the beginning of 2021 – to provide data for compiling financial statements for 2021.

New Rulebook on the chart of accounts

Individuals whose total personal net income in 2020 exceeds RSD 2.987.424 (non-taxable amount) are required to file a personal income tax return. The total personal net income earned in 2020 and the non-taxable amount are reported in the tax return, where the difference represents taxable income.

A personal income tax return (PPDG-2R form) may be submitted either electronically or in hardcopy. The hardcopy tax return is filed with the branch office of the Tax Administration located in the municipality of the taxpayer’s registered address of residence.

The deadline for filing annual personal income tax return for income generated in 2020 is Monday, 17 May 2021.

More details in our Tax Alert

At the session of the National Assembly held on 17.12.2020, a set of tax and financial laws was adopted, which were published in the “Official Gazette of RS”, No. 153/2020 on 21.12.2020, of which we single out:

1) Law on Amendments to the Law on Personal Income Tax

2) Law on Amendments to the Law on Contributions for Compulsory Social Insurance

3) Law on Amendments to the Law on Corporate Income Tax

The laws will be applied from 1.1.2021, except for the provisions related to digital property, which will be applied from the day of the beginning of the application of the law which regulates digital property.

MOST IMPORTANT AMENDMENTS TO THE LAW ON PERSONAL INCOME TAX AND THE LAW ON COMPULSORY SOCIAL SECURITY CONTRIBUTIONS

• Increases non-taxable amount of salary from 16,300 to 18,300 dinars per month
• Modifies period which is a condition for acquiring the status of a newly settled taxpayer – a qualified employer is any resident employer of the Republic, who establishes an employment relationship with a newly settled taxpayer who has met the conditions from Article 7, paragraph 2, item 1 for at least three years since 1990 of this law to be considered a resident of the Republic
• Extends period of application of existing incentives for employment of new persons until 31.12.2021.
• Clarifies provisions regarding benefits based on employment of a qualified new employee – Extended notion of employer for the purpose of exercising the right to relief for qualified new employees
• The notification on the determination for the payment of personal salary will be submitted in electronic form
• Taxation of capital gains on the transfer of digital assets is introduced
• Introduces the obligation of a domestic legal entity to calculate and pay withholding tax when making payments to an employer from another country on the basis of reimbursement of labor costs of a person referred to a domestic legal entity
• Extends exemption from taxation of winnings from games of chance

THE MOST IMPORTANT AMENDMENTS TO THE LAW ON CORPORATE INCOME TAX

All changes apply to the determination, calculation and payment of tax liability starting for 2021, ie for the tax period beginning in 2021, except for the provisions related to digital assets, which will apply from the date of application of the law governing digital assets:

• The obligation to tax capital gains and sales of investment units of closed-end investment funds is introduced
• Prescribes obligation to determine capital gains based on the sale of digital assets
• The determination of the purchase value of real estate acquired before 1.1.2004 is specified
• It is prescribed that the remaining net value of the assets of an open-end investment fund that is distributed to members is considered a capital gain
• Specifies that the income that a non-resident legal entity realizes on the basis of membership in an alternative investment fund that does not have the status of a legal entity, is considered a dividend
• Specifies manner of determining newly employed persons for exercising the right to tax incentive from Article 50a

Detailed explanations of the amendments to the above laws can be found in the Tax Alert

At its session held on November 26, 2020, the National Assembly of the Republic of Serbia adopted the Law on Amendments to the Law on Property Taxes, published in the “Official Gazette of the Republic of Serbia” No. 144/2020. Amendments to the Law on Property Taxes in the area of ​​property taxes will be applicable from January 1, 2021.

Most significant changes:

• It is prescribed that property tax payers are also open-end investment funds, ie alternative investment funds, which do not have the status of a legal entity, which are entered in the appropriate register in accordance with the law – when on real estate in the Republic of Serbia are rights holders, users or holders on which property tax is paid
• Clarification was made when the subject of taxation is the right of ownership on land and the right to use construction land with an area of ​​over 10 acres by specifying that the property taxpayer is each holder of that right in proportion to its share in relation to the total land area, even when the proportional area of ​​the share of an individual taxpayer is less than ten acres
• It is prescribed that the depreciation rate for which the value of real estate can be reduced, which is the basis of the taxpayer who does not keep business books, is equal for all real estate on the territory of the local self-government unit, ie depreciation rates on the territory of a local self-government unit cannot be different depending on the type of real estate, zone, etc.
• From January 1, 2021, the average prices of 1m2 of appropriate real estate in zones will be determined on the basis of prices realized in the turnover of appropriate real estate by zones in the period from October 1 of the year preceding the current year to September 30 of the current year – instead of 9 month, 12 month period of time is introduced
• For the purpose of determining the property tax base, ancillary facilities are classified in the same group with garages
• The subject of taxation with inheritance and gift tax has been extended to inheritance and gift of digital property
• From January 1, 2022, the competence for determining, controlling and collecting inheritance and gift taxes and taxes on the transfer of absolute rights is transferred from the Tax Administration to local self-government units.

New official translation of IFRS – International Financial Reporting Standards was published in the “Official Gazette of RS”, number 123/2020.

Application of these translated IFRS is mandatory for regular annual financial statements prepared as of December 31, 2021. Earlier application of the above IFRS is also permitted, with the disclosure of relevant information in the Notes to the financial statements.

The Rulebook on the form and content of the request for the issuance of a license for the provision of accounting services, as well as the fee for the issuance of a license, has been published on the website of the Chamber of Certified Auditors.

Along with the request for the issuance of a license for the provision of accounting services, the accompanying documentation should be submitted, as well as proof of paid fee (RSD 24,000.00 for legal entities and RSD 17,000.00 for entrepreneurs).

The register of accounting service providers should start operating on 1.1.2021, and the deadline for entry in the Register expires 1.1.2023.
Along with the application for a license to provide accounting services, the applicant shall submit the following:

1. proof (decision, excerpt, etc. of the Business Registers Agency) that it has a registered predominant activity for the provision of accounting services;
2. proof that the founder, ie the beneficial owner, as well as a member of the management body of the legal entity that has a registered predominant activity for providing accounting services, has not been convicted of a criminal offense in terms of the law governing the liability of legal entities for criminal offenses. the founder, ie the owner, as well as a member of the governing body of the legal entity, a natural person, has not been convicted of criminal offenses under Article 18, paragraph 6, item 2) of the Law on Accounting “Official Gazette of RS”, No. 73/19, hereinafter: Law):
   1. for a legal entity – Excerpt from the criminal records of the competent court;
   2. for a natural person – Excerpt from the criminal records of the Ministry of the Interior;
3. Proof that he has at least one full-time employee with a professional title in the field of accounting or auditing, acquired by a professional organization that is a member of the International Federation of Accountants (IFAC):
   1. confirmation of the applicant for the issuance of a license for the provision of accounting services, which contains information on the name and surname of that person and the date of conclusion of the employment contract for an indefinite period;
   2. a copy of the act (certificate, diploma, certificate, certificate, license, etc.) proving that the employee has acquired a professional title in the field of accounting or auditing, which was acquired by a professional organization member of the International Federation of Accountants (IFAC) .
4. data on beneficial owners listed in Form 1;
5. data on associates in the sense of Article 18 of the Law, which are listed in Form 1.

Exceptionally, an audit company that has a license to conduct an audit issued in accordance with the law governing the audit, submits an application for a license to provide accounting services on Form 1, without providing the above evidence.

The program “My first salary” envisages the employment of 10,000 unemployed people who are less than 30 years old, have no work experience and are on the National unemployment registry. For nine months, the state will finance a part of their salaries through a monthly cash benefit of 20,000 RSD for those with secondary education, and 24,000 RSD for the unemployed with higher education.

Employers should apply through the website www.mojaprvaplata.gov.rs in the period from August 17 to September 25, where they should enter a description of job positions and conditions that the candidate must meet. On the other hand, the unemployed who want to apply for a job through this program, will be able to do so from 1-15 October

From 16-31 October, employers will select candidates, and from 1-7 November the final lists will be published.

The trilateral contract can be signed from November 8 to December 7. The first cash benefits are therefore expected in December at the earliest.

The Law on Fees for the Use of Public Goods stipulates that the entity liable for fees for protection and improvement of the environment referred to in Article 134, paragraph 1, item 1) of the Law must submit an application with data relevant for determining the fee to the local public administration unit by July 31 each year, for which a fee is determined.

Criteria for determining the negative impact of activities that affect the environment of legal entities and entrepreneurs are determined within the predominant activity performed by the taxpayer. According to the degree of negative impact on the environment, the activities of legal entities and entrepreneurs are divided according to the activity into those that have a large, medium and small impact on the environment. If the taxpayer performs the activity on the territory of several local self-government units, he submits the application to the competent authority on the territory of all local public administration units on which he performs the activity.

From July 18, 2020, it is possible to submit an electronic application on the LPA portal.

We would like to emphasize that the Ministry of Finance published the opinion number 011-00-1089 / 2019-16 on December 17, 2019, which indicates and reminds that it is prescribed that the statutory audit is mandatory for regular annual financial statements of large and medium-sized legal entities classified in accordance with the law governing accounting, public companies in accordance with the law governing the capital market, regardless of their size, as well as all legal entities or entrepreneurs whose total income generated in the previous business year exceeds 4.400.000 EUR.
However, as the current Rulebook on the content and form of financial reports for companies, cooperatives and entrepreneurs (“Official Gazette of RS”, No. 95/14 and 144/14), or the Rulebook on the content and form of financial reports for other legal persons (“Official Gazette of RS”, No. 95/14), in the Income Statement, do not contain the appropriate AOP which shows the total income, and for the purpose of determining the auditor based on the criteria – total income, we believe that in this case , in order to determine the total revenue in terms of Article 26, paragraph 1 of the Law, the following revenues (AOP positions) from the mentioned regulations should be taken into account:

-Operating income;

-Financial income;

-Income from adjusting the value of other assets at fair value through profit or loss (for companies, cooperatives and entrepreneurs), ie income from adjusting the value of short-term and long-term financial placements and receivables (for other legal entities);

-Other income.

The unprecedented circumstances of COVID-19 have seen many businesses faced with challenges the likes of which they have never faced before. For many small businesses, having a trusted advisor that they can turn to for help and guidance through this crisis is incredibly important.

Small- and medium-sized practices (SMPs) have a deep knowledge of their clients’ business and many of the specialist skills necessary to help them navigate through these most challenging of times.

A professional accountant can help effectively manage and reduce risk, explain how to take appropriate actions and fortify the business for the medium to long-term.

The Small Business Continuity Checklist is a diagnostic tool to navigate times of disruption, covering two key areas of Financial Management Tasks and Strategic Management Tasks. It is not intended to be an exhaustive checklist of requirements, but rather a tool to help identify priority actions for immediate attention.

Kreston MDM has done an official translation of this document, and the translation has been published on the Kreston MDM website as well as on the IFAC website.

Deadline for acquiring the status of a qualified new employee from Article 21ž paragraph 3 of the Personal Income Tax Law and Article 45đ paragraph 3 of the Law on Social Contributions, for a person who in the period from January 1, 2019 to December 31, 2019 did not have the status of insured employee, ie status of entrepreneur who is the founder, ie a member of the company, and is employed in that company, is moved for a period of 60 days from the day of termination of the state of emergency.

Amendments to the Decree on Fiscal Benefits and Direct Benefits to Private Companies and Financial Assistance to Citizens to Mitigate the Economic Consequences of COVID-19 Disease were published in the Official Gazette of the RS, no. 60 of April 24, 2020.

The changes are as follows:

• Article 9

June tranche of direct payments – the number of employees is also reduced by the number of employees who ceased working with the company from April 10, 2020 to April 30, 2020.

July tranche of direct payments – the number of employees is also reduced by the number of employees who ceased employment with the business entity from May 1, 2020 to May 31, 2020.

The economic entity referred to in this Article shall be obliged to use the received funds from direct benefits by 15 August 2020 at the latest, thus permitting the payment of wages in full from its own funds before the receipt of direct payments.

• Article 10

Number of employees for whom large legal entities have direct benefits in June – in the amount of the product 50% of the basic minimum net salary for March 2020 and the number of employees referred to in paragraph 1 of this Article increased in accordance with paragraph 2 of this Article, for whose remuneration the employer – a large legal entity submitted the PPP-PD Form for April 2020, for which the decision on termination of work applies for at least 15 working days in the month of April 2020.

Number of employees for whom large legal entities have direct benefits in July – in the amount of the product 50% of the basic minimum net wage for March 2020 and the number of employees referred to in paragraph 1 of this Article increased in accordance with paragraph 2 of this Article, for whose remuneration is the employer – large legal entity has submitted the PPP-PD Form for May 2020, for which the decision on termination of work relates to at least 15 working days in the month of May 2020.

The large legal entity referred to in this Article shall be obliged to use the funds received from direct benefits by 15 August 2020 at the latest.

• Article 12

Repayment of direct payments with accrued interest is made to a special purpose account opened for this purpose with the Ministry of Finance – Treasury Department.

• Article 16

Dividends, for the purposes of this Article, shall mean all payments made to their owners by a company on the basis of their ownership of the stocks or shares of that company.

• Article 19a

Business entities in the private sector which, in the period from the date of entry into force of the Rulebook on the list of users of public funds 26.12.2019. (Official Gazette of RS, No. 93/19), as of the date of entry into force of this Decree, deleted from the List of users of public funds from the Register of users of public funds, maintained as an electronic database with the Treasury Directorate, are entitled to opening a special purpose account referred to in Article 13, para. 2 and 3 of this Decree, as well as fiscal benefits and direct payments under the conditions laid down in this Decree.

The Government of the Republic of Serbia adopted the Rulebook on the Contents of the Form for presenting information on persons for whom a large legal entity is entitled to the payment of direct benefits, which entered into force on 15.04.2020.

The Rulebook prescribes a Form for presenting information on persons for whom a large legal entity is entitled to the payment of direct non-refundable payments referred to in Article 10 of the Decree on fiscal benefits and direct payments to companies in private sector and financial aid to citizens in order to mitigate the economic consequences caused by disease covid-19.

Government has adopted the decree on fiscal benefits and direct payments to companies in private sector and financial aid to citizens in order to mitigate the economic consequences caused by disease covid-19 in order to mitigate the economic consequences of pandemia.

You can read more in our Tax Alert on this subject which you can find on this LINK.

According to the opinion of the Ministry of Finance RS No. 430-00-44 / 2020-04 dated 12.02.2020 when, after having been employed and having acquired the status of a qualified new employee in accordance with the conditions laid down in Article 21ž of the Law, that person continues to pursue an self-employment activity as an additional activity, that circumstance does not affect his status as a qualified new employee acquired by establishing an employment relationship within the statutory period, and by changing the basis of social insurance.

The Serbian government has announced a set of measures to help the economy. An official legislation and a full implementation guide are expected in the next 10 days. Furthermore, the announced measures will help companies that have laid off less than 10% of employees The following measures are announced:

1. Postponing of payment of due tax liabilities, with subsequent repayment in installments for at least three months, for following taxes:
   – payment of taxes and contributions for at least three months (employers who choose to use this measure may use deferral of payment of taxes and contributions to earnings until January 2021, and thereafter there is a possibility of further deferral of payment of these taxes and contributions up to 24 months without obligation to pay interest, at the request of the taxpayer)
   – postponing of payment of the income tax advance (in the meantime, companies may file a periodic tax balance and tax return to reduce the monthly advance if significant changes in the taxpayer’s business have occurred in the current year)
2. Exemption from VAT for donations (exemption for donors from the obligation to pay VAT means that donors who donate their products and goods to institutions directly involved in activities aimed at preventing the spread and treatment of citizens from Covid-19 will be exempt from VAT for that turnover)
3. Payment of three minimum wages for entrepreneurs, micro, small and medium enterprises for each employee. The state will pay minimum wage support for entrepreneurs, micro, small and medium-sized enterprises in the private sector for each employee. The minimum wage is about 31,000 RSD, so a total of about 93,000 RSD per employee will be paid. Companies can expect the state to pay them the first third of the funds mid-May, the second half in June, and the third half in July. Companies will be required to pay this money to employees. Large companies whose employees are sent on forced leave will receive subsidies of 50% of minimum wage due to reduced business volume or complete shutdown.
4. Corporate bonds. It is one of the ways in which large enterprises can count on the state support. Given the complicated legislation, changes to legislation are to be made
5. Preferential loans and guarantee schemes in order to maintain liquidity during and after the state of emergency:
   – Program for granting favorable loans with 1% interest through the Development Fund of the Republic of Serbia, for maintaining liquidity and working capital for entrepreneurs, companies classified into micro, small and medium-sized legal entities, agricultural households and cooperatives
   – Guarantee schemes for business support for loans for maintaining liquidity and working capital for entrepreneurs, companies classified into micro, small and medium-sized legal entities, agricultural holdings and cooperatives. Guarantee schemes will refer to loans granted by commercial banks, and practically the state will guarantee these loans.
6. Payment of direct assistance in the amount of 100 EUR in RSD equivalent to all adult citizens of Serbia, upon termination of the state of emergency

Our Kreston MDM BusinessINFO app now has two new calculators that can make your day-to-day business easier.

The annual personal income tax calculator fully assists not only in the calculation but also in completing the PPDG-2R tax form. The deadline for filing this tax return is May 15 of the current year for the previous calendar year.

Individuals who have earned income in 2019 over RSD 2,729,304 are required to file an annual income tax return and pay tax.

Pursuant to the provisions of Article 87, paragraph 1 of the ZPDG, taxpayers of the annual personal income tax are  persons:

– residents for income earned in the Republic of Serbia and in another country

– non-residents for income earned in the Republic of Serbia

The Exemption Calculator for Newly Employed Qualified Persons relates to tax benefits for the employment of so-called qualified persons, which began with effect from 1 January 2020.

In the calculator, in addition to the calculation of earnings is given the total cost of earnings for the years 2020, 2021 and 2022, the year of release, as well as the amount of release (savings).

Each calculator has a link to our tax alert that addresses the relevant topic.

The application can be downloaded on

Our Kreston MDM BusinessINFO app now has two new calculators that can make your day-to-day business easier.

The annual personal income tax calculator fully assists not only in the calculation but also in completing the PPDG-2R tax form. The deadline for filing this tax return is May 15 of the current year for the previous calendar year.

Individuals who have earned income in 2019 over RSD 2,729,304 are required to file an annual income tax return and pay tax.

Pursuant to the provisions of Article 87, paragraph 1 of the ZPDG, taxpayers of the annual personal income tax are natural persons:

– residents for income earned in the Republic of Serbia and in another country

– non-residents for income earned in the Republic of Serbia

The Exemption Calculator for Newly Employed Qualified Persons relates to tax benefits for the employment of so-called qualified persons, which began with effect from 1 January 2020.

In the calculator itself, in addition to the calculation of earnings is given the total cost of earnings for the years 2020, 2021 and 2022, the year of release, as well as the amount of release (savings).

Each calculator has a link to our tax alert that addresses the relevant topic.

The application can be downloaded on Google Play or the App store platform.

We would like to inform you that in accordance with the recommendations of the Government of the Republic of Serbia, Kreston MDM has taken all necessary measures to prevent the spread of the COVID-19 virus.

In order to protect the health of our clients, as well as the health of our employees, all meetings and consultations with clients will be held through digital services, while most documentation is submitted electronically to minimize all contacts and the possibility of spreading the virus. All precautions will not affect the scope and quality of service, as we operate with unchanged capacity in accordance with the recommendations and the current situation.

We invite you to follow the general preventive measures for the protection of the coronary virus and to work according to the instructions of the Ministry of Health to prevent the transmission of infections and to protect your health and the health of people from your area.

OECD issued a report which contains transfer pricing guidance on financial transactions, developed as part of Actions 4, 8-10 of the BEPS Action Plan. This report is significant because it is the first time the OECD Transfer Pricing Guidelines includes guidance on the transfer pricing aspects of financial transactions, which will contribute to consistency in the interpretation of the arm’s length principle and help avoid transfer pricing disputes and double taxation. Sections A to E of this report are included in the Guidelines as Chapter X. Section F is added to Section D.1.2.1 in Chapter I of the Guidelines, immediately following paragraph 1.106. The guidance describes the transfer pricing aspects of financial transactions and includes a number of examples to illustrate the principles discussed in this report.

The report can be seen on this link.

Ministry of Finance has published on 1.2.2019 an opinion on documenting the costs of arrival and departure from work for employees. Each company has an obligation to properly document the costs, ie it is necessary to keep a record every month whether travel expenses for employees are covered and that there are documents justifying the costs of transportation.

Furthermore, the Ministry of Finance has issued opinion no. 430-00-648 / 2019-04 dated 17.1.2020 on tax treatment of compensation for costs of arrival and departure from work that have not been documented. Compensation for expenses for arrival and departure from work, to which an employee is entitled in accordance with the general act and the employment contract in accordance with the provisions of Article 118, paragraph 1, item 1) of the Labor Law (not considered as earnings under Article 105, paragraph 3) Of the Labor Law), no compulsory social security contributions are paid regardless of the tax treatment of such benefits under Article 18, paragraph 1, item 1) of the Law.

Therefore, the reimbursement of these expenses, which have not been documented, is not treated as earnings, so that the tax at the rate of 10% is paid for the reimbursement of the costs of arrival and departure from work, while at the same time no compulsory social security contributions are calculated and paid.

Ministry of Economy has announced that misdemeanor reports will be filed against legal entities that do not register the ultimate owners in the Central Registry, and requests for instituting misdemeanor proceedings will be filed by the Agency for Business Registers (APR) after the prescribed deadline. The fine for this type of offense ranges from 500,000 to 2,000,000 dinars for legal entities, while the responsible person (legal representative) is provided with a fine of 50,000 to 150,000 dinars.

Otherwise, at the beginning of 2019, amendments to the Law on the Central Registry of Real Owners, which, among other things, prescribe misdemeanor liability for registered entities that do not register by January 31, will enter into force.

The Minister of Finance passed the Rulebook on depreciation of fixed assets that is recognized for tax purposes. The Rulebook will be published in the Official Gazette of RS No. 92/19, and will come into force on 1.1.2020. It is applied in determining income tax for 2019.

The Rulebook prescribes a new POA Form.

By adopting the Law on Amendments to the Law on Compulsory Social Security Contributions (Official Gazette of RS, No. 86/2019) the rate of pension contribution at the expense of the employer is reduced from 12% to 11.5%. The new rate will be applicable from 1.1.2020.

The National Assembly is 6.12.2019. adopted the Proposal of Decision on approval of the Decision on amendments to the Financial plan of the Social Security Fund for Military Insureds for 2019, submitted by the Government, as well as the Bill on Amendments to the Law on Contributions for Compulsory Social Security, the Law on Amendments and amendments to the Law on Tax Procedure and Tax Administration, Law amending the Law on Personal Income Tax, Law amending the Law on Republic Administrative Fees, Law amending the Law on Property Taxes, Law amending and amendments to the Law on Pension and Disability Insurance, Proposal of the Law on Termination of the Law on the Temporary Regulation of the Basis for Calculation and Payment of Salaries, or Wages and Other Permanent Remuneration of Public Funds Beneficiaries, Proposal of the Law on Amendments to the Corporate Income Tax Act, Proposal for a Law on Amendments to the Law on Corporate Taxes, Law on holding and carrying goods and the Law amending the Law on the Temporary Regulation of the Method of Charging Public Media Service Fees, submitted by the Government.

We will be releasing a Tax Alert soon regarding financial and tax laws.

Employee benefits in respect of gifts for children for the New Year and Christmas are not considered earnings up to the amount of the prescribed non-taxable amount, which is now 9,784 dinars per year per child.

Gifts of greater value than non-taxable amount, gifts to children of employees over 15 years of age, as well as gifts to employees are treated as employee earnings.

The non-taxable amount of gifts refers to gifts in cash and gifts in goods.

If both spouses work with the same employer, each of them as an employee is entitled to a gift for children on New Year’s or Christmas.

If the employer organizes a New Year’s program for the children of employees on the occasion of New Year or Christmas, by engaging theater groups or independent artists, the payment is made on the basis of the copyright contract.

The Government of the Republic of Serbia has adopted the Proposal of the Law on Amendments to the Law on Real Estate Brokerage and Leasing.

Among other things, the draft law provides for the amendment of Article 5, which defines the conditions for entry in the Register of Real Estate Brokers:

1) An entrepreneur or at least one natural person who establishes a company or another member of a company, or at least one full-time employee must have passed the professional examination referred to in Article 11 of this Law;

2) There must be a valid insurance contract concluded in accordance with Article 13 of this Law;

3) There must be adequate business premises in accordance with Article 14 of this Law;

4) The protective measure referred to in Article 32, paragraph 2 and Article 33, paragraph 4 of this Law, which is in force at the time of application, must not be imposed;

5) A member of a company, a real owner or entrepreneur, a representative of a company or manager, if the entrepreneur has entrusted the management of a business to a capable natural person, who have a registered predominant activity of a real estate agency, as well as natural persons with the professional examination referred to in Article 11 of this Law, legal persons may not be sentenced to a criminal offense for a fine or natural persons sentenced to imprisonment for a criminal offense in the Republic of Serbia or a foreign country.

The person referred to in item 1) of the Law, must be a full-time employed person and must have passed the professional exam, while under the applicable law it was possible to hire a person outside of employment.

The draft law stipulates a general condition of eligibility that candidates must fulfill when passing the professional examination for brokerage, which is that they cannot be sentenced to imprisonment for criminal offenses in the Republic of Serbia or a foreign country. The Law is scheduled to enter into force on January 1, 2020.

The Law on Amendments to the Law on Personal Income Tax and the Law on Contributions for Compulsory Social Security stipulate the extension of the deadline for the use of old tax benefits for the employment of new persons until 31.12.2020.

However, it is stipulated that claims for tax and contributions refunds should be submitted on special forms which will be prescribed by the Minister of Finance.