Tax deductions before the Government by the end of the month

The Finance Minister in the Government of the Republic of Serbia, Mr. Bozidar Djelic, announced the reduction of the tax on corporate profit from the actual 20% to 14% rate. He also announced the reduction of the tax on independent activity income for citizens (to a 14% rate).

Therefore, a special tax exemption has been provided for investors, because the investment credit has been raised from 10% to 20% – for big and mid-sized companies, and from 30% to 40%, for small-sized companies. This practically means that the tax on corporate profit would be reduced by 20% and 40% respectively, regarding the total funds invested in equipment or machines, and will assure the transfer of unused credits. The employer would be exempted from tax duty on the employee gross salary, for a period of two years, for every new worker employed.

Also, as announced by the Ministry officials, sales tax on real-estate renting for individuals and companies should be suspended. Landlords, mainly, did not pay this tax duty in the past, therefore, the tax suspension, would probably mean the same as legalization of failing to comply with this duty. “After a fiscal analysis, the suspension of this tax duty for companies will be decided upon”, declared Mr. Dusko Stojkov, special consultant for fiscal policy within the Finance Ministry.

The Ministry also plans an additional reduction of the income tax for citizens, from the actual 20% to a 10% rate. Tax suspension has been considered for keeping some «trophy weapons». According to the Ministry officials, this is considered as a logical move, because a gift is hardly given away, as well as it would be unjust for those who inherited these weapons – and can’t give them away – to pay additional taxes. After the trophy weapons, this tax exemption should be applied on some kinds of boats as well.

Fiscal amendments also provide for a ten years tax exemption for any big company doing business in regions of special interest for Serbia, engaging 100 new workers and investing at least ten million Euros in production. Depending on the region concerned, the amount of the invested sum could be reduced, therefore, any company investing 100 thousand Euros and employing a certain number of new workers, in the region of Bor and Majdanpek, would be exempted of tax over a period of ten years.