Changes for the economy brought by new laws in 2020

A new set of tax laws and amendments to the current ones, adopted by the National Assembly of Serbia in early December 2019, came into effect on January 1, 2020, and the implementation of a certain number of adopted laws is expected during the year.

The list features numerous laws, such as the Law on Income Tax for Legal Entities, laws on property taxes, exploitation, possession and carrying of goods...

Perhaps the most important thing for the economy is that one set of laws entails a reduction of burdens on labor, more precisely, the increase of the non-taxable portion of the salary from 15,300 to 16,300 dinars and the reduction of the employer's contribution from 12% to 11.5%.

This reduces the burden of salaries from 62% to 61% in total.

– In addition to that, a whole range of incentive measures regarding the employment of new persons and new residents are implemented. This will increase the employment of young people in 2020 – says the state secretary at the Ministry of Finance, Slavica Savcic.

Tax exemptions pertaining to companies which increase the number of employees or companies which employ people who were not employed during 2019 come into effect.

There are also incentives for citizens of Serbia living abroad if they come back and get employed in Serbia.

A reduction of tax and contribution base by 70% over five years is envisaged for them.

The Draft Law on Amendments to the Law on Personal Income Tax and the Draft Law on Contributions for Mandatory Social Insurance envisage, for example, an extension of the period of benefiting from old tax exemptions for the employment of new workers until December 31, 2020.

According to those in charge, the amended Law on Personal Income Tax defines in more detail who can have the status of a lump-sum taxpayer, as well as whether they can use an annual leave and when, where they carry out their activities, whether the work is done at the employer's premises and whether an entrepreneur realizes the majority of the income from a single employer.

As Savcic explains, in the first quarter of 2020, the competent ministry will work on preparing bylaws and regulations which accompany the adopted laws.

The abolition of tax return forms for citizens is another innovation.

Furthermore, all the affairs verified by a notary will be automatically forwarded to local tax offices, which will help citizens save time and money, she says.

The list of new laws coming into effect in 2020 also features the Law on Enforcement and Security, which introduces anonymous, electronic public bidding for immovable property being sold in an enforcement procedure.

The implementation of the Law on Alternative Investment Funds starts on April 19. It will bring new financing options, also for medium companies in the form of “crowdinvesting”, that is, group financing, where a number of investors invest smaller amounts of money.

The Law on Public Procurement Procedures comes into effect on July 1 and should increase the efficiency of public procurement procedures, reduce the costs and administrative burdens on procuring entities and suppliers, increase the participation of small and medium companies in public procurement procedures...

Ministarstvo finansija Republike Srbije

Slavica Savčić

Law on Income Tax for Legal Entities

Law on Personal Income Tax

Draft Law on Contributions for Mandatory Social Insurance

Law on Alternative Investment Funds

Law on Enforcement and Security

Law on Public Procurement Procedures