Tax exemptions for beginners in business from today

The implementation of tax exemptions for beginners in business in Serbia starts today.

According to the amendments to the Law on Income Tax and the Law on Contributions to Mandatory Social Insurance adopted in December 2017, beginners in business will be exempt from paying income tax and contributions for mandatory social insurance for a period of one year. The innovation pertains to the income of the founders of an enterprise and the wages of up to nine newly employed persons, who need to be high school graduates, students or persons from the registry of the National Employment Service.

The condition for the unemployed who are starting a business to be able to exercise the right to tax exemptions is that they have been registered at the National Employment Service for over six months. Tax exemptions can be given to employers who founded the company in the period from the beginning of the implementation of the law, that is, from October 1, 2018, till December 31, 2020. The right to exemptions can be exercised by the employer – a newly founded legal person, as well as a newly founded enterprise listed in the registry of the competent organ or organization, as the right of exemption from the payment of taxes and contributions on the founder's income, or the entrepreneur's personal income, as well as on the employees' wages, for up to nine newly employed persons the employer has signed job contracts.

Beneficiaries can register as either enterprises under the regime of personal income payment or as a limited liability company, and in both cases, they are obligated to keep records.

The implementation of incentives for beginners in business is a key innovation and one of the most important measures of the National Program for Suppressing Gray Economy.

The analysis of tax and non-tax burdens on beginners in business realized by the National Alliance for Local Economic Development (NALED) shows that the savings realized that way by enterprises reach up to RSD 250,000 a year per person, when it comes to minimum wage.

NALED Beograd

tax exemptions for beginners in business

Law on Income Tax

Law on Contributions for Mandatory Social Insurance

exemption for paying income tax and contributions for mandatory social insurance

newly founded enterprise

incentives for beginners in business

National Alliance for Local Economic Development

NALED

National Program for Suppressing Gray Economy