Rulebook on the manner of exercising the right to a salary tax base reduction for newly settled taxpayer
Tax Alert, November 2020
Rulebook on the manner exercising the right to a salary tax base reduction for newly settled taxpayer has been published (hereinafter referred to as „Rulebook“) on 13 November 2020 in Official Gazette.
This Rulebook closely defines the conditions and proof necessary to obtain by both qualified employer and newly settled taxpayer for the purpose of exercising the right to a salary tax base reduction.
The main Rulebook provisions
For the purpose of applying the reduced tax base, the qualified employer referred to in Article 15v paragraph 2 of the Personal Income Tax Law shall obtain the following documentation:
- Gives its written statement that the newly settled taxpayer was not employed by an entity related to the qualified employer before entering into employment with the qualified employer;
- Obtains a written statement from the newly settled taxpayer that s/he was not employed prior to the employment with qualified employer, of if he was - a statement that contains data on former employers
When it comes to a qualified employer from the Article 15v paragraph 3, a following documentation is obtained from the newly settled taxpayer:
- Confirmation on the change of domicile/residence for the past 25 years that proofs that newly settled taxpayer/spouse and children have had a domicile/residence in Serbia for at least three years;
- Proof of approved temporary residence/permanent residence in Serbia for a foreign citizen/ spouse and children, as proof that they had resided in the territory of the Republic of Serbia for at least three years;
The qualified employer referred to in Article 15v paragraph 4 point 1 collects the following documentation from the newly settled taxpayer as proof that the person did not have a permanent or temporary residence in the territory of the Republic of Serbia 24 months before the employment was established.
- Certificate of change of domicile/residence issued by the competent authority of Serbia; or
- Certificate of domicile/residence, or an extract from the relevant register of a foreign competent authority; or
- Certificate of employment from a foreign employer in the territory of another state; or
- Proof of the competent social security authority of another state;
Regarding the proof that the person did not have a domicile or residence on the territory of the Republic of Serbia 12 months before the employment was established documentation is as follows:
- Certificate of change of domicile/ residence of the competent authority of Serbia; or
- Certificate of domicile/residence, or an excerpt from the relevant register of a foreign competent authority;
In addition to the above mentioned documentation, the newly settled taxpayer submits a written statement that in the previous 12 months s/he resided in another state/states and that s/he did not stay continuously or intermittently for 183 days in the territory of the Republic of Serbia, or proof of completed secondary or higher education in another country, due to which he spent 183 or more days outside Serbia continuously or intermittently.
As proof of fulfilment of the conditions referred to in Article 15V paragraph 7, the newly settled taxpayer may submit:
- Proof of his own property right or the property right of his family members on a real estate in the territory of Serbia;
- A written statement confirming that person has settled in the territory of the Republic of Serbia with the intention to stay 183 or more days in any 12-month period;
- Certificate of domicile/residence Serbia for Serbian citizens, or proof of approved temporary residence/permanent residence in Serbia for foreign citizens. This evidence is submitted no later than 180 days from the establishment of employment to the employer, and then once in a period of 12 months
This documentation, the qualified employer is obliged to obtain no later than the salary payment day to the newly settled taxpayer.
Date of application
The Rulebook shall enter into force on the day following that of its publication in the Official Gazette.