In this article, we highlight the most relevant changes to Serbia’s tax laws, including those related to the tax treatment of status changes from the perspective of corporate income tax, VAT, and tax procedure. Changes in general tax procedure and VAT declaration procedure are introduced as well.
Each of these laws will be applied starting from 1 January 2025.
Law on Tax Procedure and Tax Administration
The amendments stipulate that the tax return in the case of the merger of a legal entity must be submitted by the legal successor or another person in accordance with the law, with the deadline for submission occurring after the legal entity is deregistered.
Additionally, a new registry of individuals has been established as an electronic database. The registry will be maintained by the Tax Administration to ensure the availability of data on individuals necessary for the verification process of meeting the conditions for acquiring rights.
Further amendments introduce an automatic registry of the date the tax document is delivered, which is the day it is posted on the Tax Administration Portal from which the taxpayer can access the documents. If the taxpayer does not access the tax document, it will be considered delivered after a period of 15 days from the date it is posted on the Tax Administration Portal.
An important amendment has also been made regarding tax benefits for non-resident individuals. Specifically, non-residents will now be able to make tax payments in foreign currency to a foreign currency account designated for tax payments, while the specific method of payment in foreign currency will be further regulated by the minister.
Additionally, the terms for permanent non-collectibility of taxes have been regulated as a new way to terminate a tax liability, the right to overpayment, which has existed previously as the right to a refund of overpaid taxes, and doubtful and disputed claims, which are specifically recorded in the tax bookkeeping:
- Permanent tax non-collectibility occurs due to the deletion of a taxpayer from the prescribed register, as well as the entry of the taxpayer in the register of deceased persons when the Tax Administration will issue a decision on the cessation of the tax obligation due to its non-collectibility ex officio. This also applies when there is no person responsible for fulfilling the unpaid tax obligation of that taxpayer, as well as when the collection of the receivable is not secured by a pledge or mortgage.
- The right to a tax overpayment for a taxpayer who has been deleted from the prescribed register belongs to the legal successor or the person who, in accordance with the regulations, is responsible for fulfilling the tax obligation of that taxpayer, in proportion to the tax obligation they fulfil and the total debt of the deleted taxpayer.
- Suspicious or disputed claims are considered the following unpaid tax obligations:
- Those of legal entities for which bankruptcy proceedings have been initiated (from the moment the bankruptcy proceedings are opened until their completion or dismissal), and
- Those of legal entities that have been deleted from the prescribed register in the process of forced liquidation (from the day of deletion from the relevant register until the day the obligation of another party to settle them is established or a decision on the non-collectibility or absolute statute of limitations is made).
It is also stipulated that information and documents obtained through international exchange of information can be used exclusively for tax purposes, and for other purposes only with the consent of the competent authority of the other country.
Non-residents can now pay taxes from abroad without the obligation to open a bank account in Serbia. It is expected that the Minister of Finance will issue a subordinate regulation to further regulate this matter.
Law on Value Added Tax
The tax base for the fee for services provided by foreign entities, which are included in the customs base, has been specified. It is stipulated that the tax base for VAT is the difference between the total fee and the portion of the fee included in the customs base.
The rules regarding changes to the tax base and the right to deduct previous tax have been more detailed. In addition to certain terminological adjustments, electronic invoices can now be used for the purpose of deducting previous tax.
A new obligation is being introduced – the preparation of an internal invoice. Taxpayers have been preparing internal invoices in practice, but this is now defined as a separate legal obligation.
A taxpayer who has achieved a total turnover greater than 8.000.000,00 RSD in the previous 12 months will be obligated, under these changes, to submit a registration report to the tax authority within a shorter period – no later than 5 days from the day the turnover is achieved.
The legislator has aligned and clarified the procedure of deletion of VAT taxpayers from the registry in accordance with practical needs: when a VAT taxpayer ceases to exist due to a status change, the legal successor is the one who notifies the tax authority about the status change to delete the VAT taxpayer who no longer exists.
The deadlines for submitting requests to change the tax period to a calendar month have been amended. From now on, such a request can be submitted from 15 to 31 December of the current year for the following calendar year.
There is no longer an obligation to prepare an overview of the VAT calculation. Instead, the taxpayer will submit a preliminary tax return along with the tax declaration.
Law on Corporate Income Tax
Law on Corporate Income has also undergone certain changes, primarily in clarifying the terminology regarding the submission of tax returns in cases of bankruptcy and liquidation of legal entities. Solidary liability for company members who received assets from a liquidated company has also been introduced.
Legal entities that arise from a status change of separation will be required to notify the Tax Administration within 60 days of the change about the division of rights and obligations.
Law on Personal Income Tax and Law on Mandatory Social Security Contributions
Law on Personal Income will undergo certain changes, particularly in light of the increase in non-taxable amounts:
- The non-taxable amount for salary is now 28.423,00 RSD, instead of the previous 25.000,00 RSD. It should be noted that the first adjustment will be made starting in 2026.
- The non-taxable amount for foreign daily allowances is now 90 EUR, instead of the previous 50 euros.
The right to a tax refund for newly employed persons has been extended until 31 December 2025. Accordingly, the Law on Mandatory Social Security Contributions extends the employer’s right to a refund of a portion of the paid contributions for mandatory social insurance until the same date.
A completely new aspect of this law is the regulation of the tax treatment of seafarers’ income. The tax rate on this income will be 10%. Again, the law regulating social insurance also sets the contribution base for mandatory health insurance for seafarers.
Changes have introduced additional conditions for tax exemptions on annual personal income tax in case of investment in alternative investment funds. Taxpayers will be able to apply for a 50% tax exemption if they hold the investment units for at least three years after the calendar year in which the units were purchased.
Law on Property Taxes
The scope of property tax exemptions for certain types of land, as well as for real estate for which tax is determined by self-assessment, has been narrowed.
The rules for determining the tax base for certain types of properties and the method of applying published data on market values of real estate, which are published by local tax administrations, have also been clarified.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.
