Parliament of Serbia adopted amendments to the Personal Income Tax Law and the Law on Mandatory Social Security Contributions. Amendments apply as of 01 January 2027, while some amendments apply as of 01 January 2028.
An overview of the most important changes is provided below:
The non-taxable amount for salary tax calculation is increased
The non-taxable amount which is applied for salary tax calculation is increased as of 1 January 2027 and amounts to RSD 37,369 (instead of current RSD 34,221).
Next adjustment of this amount will be from 1 January 2028.
Alignment of incentives for the employment of new employees with state aid control rules
The existing salary tax incentives (Articles 21v and 21d of the Personal Income Tax Law) and social security contribution incentives (Articles 45 and 45v of the Law on Mandatory Social Security Contributions) for the employment of new employees are extended until 31 December 2028.
The incentives are aligned with the state aid control regulations as follows:
- The incentives may be used for a period of up to 12 months from the date of commencement of employment of the new employee, provided that the employer has increased its headcount compared with the average number of employees during the preceding 12 months (instead of the previous comparison with the number of employees as at 31 March 2014);
- the total amount of the incentive may not exceed 50% of the salary costs of the employees concerned, or EUR 5.5 million per employer per year;
- an employer that has been ordered to repay state aid or de minimis aid, as well as an employer considered to be an undertaking in difficulty under the state aid control regulations, is not entitled to the incentive.
Unemployed persons under the age of 24 who are registered under the Youth Guarantee Program (previously, this applied only to persons under the age of 30) are not required to have been registered with the National Employment Service for at least six months before commencing employment.
Incentives for employment of persons with disabilities (Article 21g and 45b) – salary tax and SSC
The incentive for the employment of persons with disabilities is aligned with the state aid control regulations.
Entrepreneurs – opting for personal salary payment
A lump-sum taxed entrepreneur who exceeds the threshold for lump-sum taxation and is required to switch to keeping business books may opt for the personal salary taxation model within 15 days from the date of losing the right to lump-sum taxation (instead of by 15 December of the current year for application from 1 January of the following year, as was the case before these amendments).
Application of the amendments
The amendments apply as of 1 January 2027.
Exceptionally, the amendments relating to the incentives from article 21v, 21d of the Personal Income Tax Law and 45, 45v of the Law on Contributions for Mandatory Social Insurance, apply as of 1 January 2028.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
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