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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

Committed to redefining a law firm's role in an emerging regional market, Gecić Law is a full-service law firm that advises international and local clients from the public and private sectors in navigating the complex legal landscape of the region across multiple practice areas. Members of the Gecić Law team have graduated from leading universities in the US and Europe. They have extensive local and international experience, with a particular focus on EU regulatory frameworks and international trade and a proven track record in providing innovative and practical solutions in the most complex of matters.

Gecić Law is an exclusive member of two leading global alliances, TerraLex and TAGLaw, extending its international footprint. The firm and its lawyers have continuously been recognized in several practice areas by elite global directories, including The Legal 500, Chambers and Partners and Benchmark Litigation. Gecić Law was named Law Firm of the Year: South Eastern Europe 2021 and Law Firm of the Year: Eastern Europe and the Balkans 2020 at The Lawyer European Awards and was repeatedly nominated in other practice areas.

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