Amendments to the Law on Pension and Disability Insurance (“the Law”) from 2019, notably Article 11 thereof, have eradicated the practical issues that used to exist in relation to the mandatory social insurance of persons working for foreign employers in Serbia.
Amendments to the Law from 2019
Namely, the Law on Amendments to the Law, published in the Official Gazette of RS no. 86/2019 from December 6, 2019, changed the scope of the term, i.e., prescribed categories of insured employees, by deletion of provision of Article 11, paragraph 1, item 7) of the Law, which reads “Serbian nationals employed abroad, who are not subject to mandatory insurance during such period of working for a foreign insurance holder, or who cannot exercise or use the rights from pension and disability insurance under the regulations of such state outside its territory.”
The reason for this is the fact that, under the previously mentioned provision, such persons were subject to the mandatory insurance only if they applied thereto and submitted appropriate documentation, i.e., evidence of their work abroad, thus it was possible to avoid the subject obligation.
At the same time, Article 3 of the abovesaid Law on Amendments to the Law introduced item 3a) to Article 12, paragraph 1 of the said regulation, establishing thereby the categories of insured persons performing independent activities, under which the status of insured employees shall also be applied to “the persons working on the territory of the Republic of Serbia for foreign employers who do not have registered their representative offices in the Republic of Serbia, and which earn salary for the performed work, while they are not insured on other grounds.”
Practical implications of the respective amendments
The scope of the insured persons who perform independent activities is thus expanded by inclusion of persons working in Serbia for foreign employers, provided that such employers do not have registered representative offices in Serbia, as well as that the said persons earn salary for their work, if they are not insured on other grounds.
In relation thereto, Article 36 of the Law on Amendments to the Law, i.e., Article 191a of the Law, prescribes that the obligation to pay contributions for pension and disability insurance, as well as deadlines and obligations to submit applications for this category of insured persons, shall be subject to the regulations on tax procedure and tax administration, personal income tax, contributions for mandatory social insurance, and other regulations within the scope of competence of the Ministry of Finance.
Such specification of the rights and obligations of the respective category of insured persons significantly reduces the possibility of different misconducts in this regard and aligns the Law with provisions of regulations on personal income tax and contributions for mandatory social insurance.
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By Lara Maksimovic, Senior Associate, PR Legal