As mentioned in one of our previous articles (available here), the application of amendments to the Law on Personal Income Tax, which were published in the Official Gazette of RS no. 138/2022 of 12 December 2022 and which stipulate that the annual personal income tax shall be paid by self-taxation and not on the basis of the decision rendered by the competent tax authority, which was the case so far, commenced on 1 January 2023.
In relation thereto, the Rulebook on Tax Return for Annual Personal Income Tax (Official Gazette of RS no. 24/2023) was passed, and it entered into force on the first day following the day of its publishing, i.e., on 30 March 2023 (“the Rulebook”). The Rulebook prescribes the manner of submission and content of the tax return for the annual personal income tax that is calculated and paid by self-taxation.
Taxation by the annual personal income tax
As a reminder, the annual personal income tax is paid by natural persons whose income in a calendar year exceeds the amount of triple average annual salary per employee paid in the Republic of Serbia in the year for which the tax is determined, according to the data registered by the republic statistical office, i.e.:
- by residents – for income collected in the territory of the Republic of Serbia and in another state;
- by non-residents – for income collected in the territory of the Republic of Serbia.
This practically means that natural persons whose income in 2022 exceeded RSD 3,719.376 shall be subject to this tax.
The basis of annual personal income tax is a taxable income, which represents the difference between taxable income (from Article 87, para. 8 of the Law on Personal Income Tax) and personal allowances (according to Article 88 of the same law).
The annual personal income tax shall be paid to the above-mentioned base according to the following rates:
- to the amount up to sixfold average annual income – 10%;
- to the amount exceeding sixfold average annual income – 10% for the amount up to sixfold average annual income + 15% for the amount above sixfold average annual income.
Submission of the tax return
The tax return for annual personal income tax is submitted to the Tax Administration on PP GPDG form (“PP GPDG Form“) as follows:
Based on the data from official records, the Tax Administration shall enter the data into the tax return on PP GPDG Form and upload it on the Tax Administration portal, no later than 1 April of the year following the year for which the annual personal income tax is determined;
The taxpayer is obliged to change and/or supplement the above-mentioned tax return, in the part where accurate and relevant data are not presented, and to submit this return electronically through Tax Administration portal, within a legally prescribed deadline that has not been changed, i.e., by 15 May;
Tax return on PP GPDG Form is submitted by taxpayer, its representative or another person authorised by the taxpayer to submit tax return, attorney or ex officio representative, whereas the applicant is obliged to place electronic signature on the tax return in accordance with the Law on Electronic Document, Electronic Identification and Trust Services in Electronic Business;
Non-resident taxpayer is obliged, for the purpose of submitting tax return, to designate a tax representative in the Republic of Serbia, in accordance with the Law on Tax Procedure and Tax Administration.
If the payer of annual personal income tax fails to submit or untimely submits the respective tax return, it may be subject to the misdemeanour liability and fine (from RSD 5,000 to 150,000).
By Lara Maksimovic, Senior Associate, PR Legal
