On 29 of December 2015 Serbian Parliament has adopted amendments to the Personal Income Tax (PIT), which were published in the Official Gazette of the Republic of Serbia no. 112, dated 30 December 2015.
Application of the adopted amendments
Amendments are applicable as of 1 January 2016, except the provisions related to the taxation of income from real estate, which will be applicable as of 1 January 2017.
The most significant amendments are the following.
Income exempt from taxation
The PIT Law amendments now deal more precisely with the taxpayer’s income that is exempt from the tax:
The exemptions from taxation now do not include any more consideration for the collection and sale of secondary raw materials and waste that have been paid to the seller’s bank account. This income is now taxable as ‘other income’ with the 40% reduction of the calculated tax.
Adjustment of the amounts in RSD
The PIT Law amendments provide for the consumer price index adjustment of the
Salary tax base for employees seconded abroad
For employees seconded abroad, the PIT Law amendments reinforce the rule that was applicable before the amendments of the PIT Law made in 2013. This means that the tax base is the salary the employee would have earned in Serbia if he/she was employed on the same or similar job position, and not the amount the employee actually received, as the case was until now.
Non-taxable amount of per diem allowances for business trips for employees other than public servants is increased to EUR 50 per day, no matter the destination of the business trip. This interpretation is derived from the explanation that followed as an addition to text of the PIT Law amendments.
We emphasize that the provision in the PIT Law has not been clearly drafted, having in mind that it was not stated precisely whether the special Government regulation dealing with the per diem allowances will be applicable only to the public sector.
Moreover, it is now stated that, for the purpose of calculating the tax on salary, the amount of the per diem allowance above the untaxable amount will be converted into RSD according to the National Bank of Serbia exchange course, applicable on the day of the conversion from foreign currency to RSD.