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Personal Income Tax Incentives Deadline Extended

Personal Income Tax Incentives Deadline Extended

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The Serbian National Assembly has adopted amendments to the Law on Personal Income (PIT Law) and the Law on Mandatory Social Contributions (SSC Law) extending the deadlines for payroll incentives.

These amendments concern employers engaging newly employed individuals, allowing such employers to use these incentives until the end of 2024. The initial deadline was set for the end of 2023.

For reference, these incentives entitle the employers to refund salary tax and SSC, in the amount of:

  • 65% if they engage at least 1, but no more than 9 newly employed individuals,
  • 70% if they engage at least 10, but no more than 99 newly employed individuals,
  • 75% if they engage at least 100 newly employed individuals.

In addition to these provisions, micro and small legal entities, as well as entrepreneurs who engage a minimum of two new individuals, are entitled to a 75% salary tax return and a 75% reimbursement of the paid SSC related to the newly employed individual, until the end of 2024, also extending the deadline from the previously foreseen 2023.

Within the framework of these laws, a newly employed individual is an individual: (i) with whom the employer concluded an employment agreement, (ii) registered with the Central Registry of Mandatory Social Insurance, and (iii) who was, before being employed, registered as unemployed with the National Employment Agency continuously for a duration of at least 6 months, or 3 months in the case of an intern.

The amendments are set to take effect from 1 January 2024.

The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.

By Branimir Rajsic, Senior Consultant, Katarina Tomic Senior Associate, Milica Mijatovic Associate, Karanovic & Partners

Serbia Knowledge Partner

SOG in cooperation with Kinstellar is a full-service business law firm in Serbia that provides foreign and domestic clients with premium-quality legal advice and assistance across a wide range of key areas of corporate law. The firm was founded in 2015 by a group of seasoned, internationally-trained lawyers. SOG has developed a distinctively dynamic culture, bringing together top talent, fostering entrepreneurship, and maintaining exceptional relationships with its clients.

SOG has achieved consistent growth in the volume of its business, accompanied by an exponential increase in the number of hired associate lawyers and the firm’s network of business contacts. SOG has a robust client base of multinationals, investment and private equity firms, and financial institutions. Clients praise SOG for being commercially minded, very responsive and knowledgeable.

Establishing permanent cooperation with Kinstellar is part of realising SOG's long-term development strategy to be the leading provider of legal services in the Western Balkans market.

Firm's website: https://www.kinstellar.com/


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