Local TPA tax experts on the most significant tax changes in 2019: What investors and enterpreneurs should know!
1.Corporate Income Tax in Serbia
Corporate Income Tax Law (CIT) amendments applicable as of January 1st, 2019
- Tax depreciation of fixed assets classified in tax depreciation groups II-V, except intangible assets, will be calculated by using straight-line method, instead of the currently valid degressive method, whereby depreciation rate will be applied on the base that represents purchase value of every fixed asset separately;
- If the accounting depreciation costs are lower than the tax depreciation costs, accounting depreciation will be recognized as a tax-deductible cost in the tax period;
- Advertising expenses will be recognized without restriction in amounts recorded in the income statement, and not only in the amount of 10 % of total revenue;
- Costs directly related to research and development (R&D) carried out by the taxpayer in Serbia may be deducted for CIT purposes in a doubled amount;
- The qualified royalty income generated by the taxpayer, holder of a copyright or related right on the basis of compensation for the exploitation of the rights, may be excluded from tax base in the amount of 80 %, under certain conditions;
- The subject of capital gain tax has been extended to the intellectual property rights;
- Taxpayer who makes equity investment into newly established business entity, which performs innovative activities, will be granted tax credit in the amount of 30 % of the investment made, under certain conditions.
2. Personal Income Tax 2019
Personal Income Tax Law (PIT) amendments applicable as of January 1st, 2019
- Tax exemption is prescribed for expenses for the purpose of creating and maintaining recreation of employees at their workplace, including organizing sports and other activities for employees (team-building), under the condition that these activities are carried out in accordance with the employer’s internal policies and if all employees have the right to participate in recreation of the same type, quality and volume;
- Income generated from providing hospitality services in a hospitality domestic facility (house, apartment and room) will be taxed in accordance with the Decision of the Tax Authority and will be subject to the annual income tax.
Personal Income Tax Law (PIT) amendments applicable as of July 1st, 2019
Natural person is obliged to pay tax on income generated from the services of renting of apartments and rooms for a period longer than 30 days, which are not considered hospitality services, where the tax base is calculated as a gross income reduced for 25 % of standardized costs.
3. Social Security Contributions and Property Tax in Serbia
The Law on Social Security Contributions (SSC) amendments applicable as of January 1st, 2019
Obligation of the payment of SSC for unemployment insurance on behalf of employer is abolished.
The Property Tax Law amendments applicable as of January 1st, 2019
It is defined that component part of the land for purposes of taxation with property tax will be, inter alia, trails and other open spaces covered with slag, asphalt, concrete, etc., along with open parking spaces, fences, retaining walls, playgrounds, etc.