Tax payment via one order - Government adopts changes of six tax laws

On May 20, the Government of Serbia adopted ammendments of six tax laws which will enable less burden to the economy, especially entrepreneurs and small businesses, stable funding of the Pension Fund and fairer tax system by aligning taxes with a taxpayer's income.

These changes follow the reform of the tax system in Serbia and present another step towards more economical and efficient state and in line with the principles set forth in the Fiscal Strategy adopted last year, it has been announced by the Government of Serbia.

Wage tax rate reduction from 12 to 10% and increase in non-taxable wage amount from current 8,776 dinars to 11,000 dinars will reduce taxes on the lowest wages, from 8.6% to 6.4%, which are mostly paid in labor-intensive industries, such as textile industry.

Raising the threshold for lump sum taxation from three to six million is a relief to many small business entrepreneurs, the statement announced

In addition, entrepreneurs will be able to choose whether to pay contributions to personal income or profit. This changes current solution which generates unjustified difference in the amount of tax burden between an entrepreneur and a company owner.

These changes will save the economy RSD 1.7 billion annually.

Increase in contributions rate for mandatory pension insurance from 22% to 24% will enable Pension Fund revenues to grow by approximately RSD 26 billion per year thus generating preconditions for a sustainable pension system of the Republic of Serbia.

With introduction of changes in tax laws, legal entities will not pay taxes based on the real estate accounting values but the market value of land on which the buildings are located will be taken into account.

Entrepreneurs will be enabled to pay taxes via integrated order. This way, all existing tax returns and other forms submitted with withheld tax payment (35 forms) would be replaced with one, individual tax return form, and instead of maximum 205 payment accounts, obligation would be paid through only one.

This change brings simpler operations and savings in economy totaling RSD 1.5 billion per year, according to the government statement.