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Deadline for Submission of the Tax Return for Annual Citizens’ Income Tax for 2021 Expires on 16 May 2022

Deadline for Submission of the Tax Return for Annual Citizens’ Income Tax for 2021 Expires on 16 May 2022

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On 4 April 2022, the Ministry of Finance of the Republic of Serbia published the Explanation on Annual Citizens’ Income Tax for 2021.

As a reminder, the annual citizens’ income tax is governed by articles 87-89a of the Law on Citizens’ Income Tax (“the Law”).

Taxpayers of the annual citizens’ income tax

Under the abovesaid provisions of the Law, the annual citizens’ income tax is paid by natural persons whose income in a calendar year was higher than triple amount of the average annual salary per employee (paid in the Republic of Serbia in the year for which the respective tax is determined, according to the national authority for statistics), i.e.:

  • residents for an income generated in the territory of the Republic of Serbia and in another state; and
  • non-residents for an income generated in the territory of the Republic of Serbia.

Non-taxable amount

As aforementioned, the non-taxable amount of income for 2021 corresponds to triple amount of average annual salary per employee, i.e., amounts to 3,268,224 dinars (since the average annual salary per employee for 2021 is 1,089,408 dinars).

Taxable revenues

In terms of the Law, the income means the annual sum of:

  • salaries;
  • taxable income from self-employment;
  • taxable income from copyright and related rights and industrial property rights;
  • taxable income from real estate;
  • taxable income from rental of movables;
  • taxable income of sportsmen and sports professionals;
  • taxable income from provision of catering services;
  • other taxable income;
  • income on bases stated in previous points (except for catering services), generated and taxable in another state for residents of the Republic of Serbia.

Tax base

Pursuant to the Law, the tax base for the annual citizens’ income tax is a taxable income, which represents difference between income subject to taxation and personal deductions prescribed by Article 88, paragraph 1. of the Law.

The abovesaid personal deductions are:

  • for taxpayer – 40% of the average annual salary per employee, which amounts to 435,763 dinars; and
  • for dependent family member – 15% of the average annual salary per employee, which amounts to 163,411 dinars.

The total amount of personal deductions may not exceed 50% of taxable income, whereby if two or more family members are subject to the payment of annual citizens’ income tax, deduction for dependent family members can be used only by one of them.

Tax rate

In order to calculate the annual citizens’ income tax, when the tax base is properly determined, it is subject to the following tax rates:

  • to the amount up to six-times average annual salary – the rate of 10%; and
  • to the amount above six-times average annual salary – the rate of 10% to the amount up to six-times average annual salary, plus the rate of 15% to the amount above six-times average annual salary.

Tax return

The tax return for determining the annual citizens’ income tax is submitted on PPDG-2R form, in electronic form (using the electronic services of the Tax Administration) or in writing (directly or by mail).

The resident taxpayer submits the said tax return to the organizational unit of the Tax Administration responsible for the territory in which it has a permanent or temporary residence, while the non-resident taxpayer is obliged to file the return through a proxy, to the organizational unit of the Tax Administration responsible for the territory where income is realizes, or the residence or seat of the proxy.

Based on the submitted tax return, the annual citizens’ income tax is determined by a decision of the competent tax authority.

This article is to be considered as exclusively informative, with no intention to provide legal advice. If you should need additional information, please contact us directly.

By Lara Maksimovic, Senior Associate, PR Legal

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