Annual personal income tax is paid by natural persons whose income for the calendar year under review exceeds the sum of three average annual salaries per employee, as follows:
- residents – for the income earned in the territory of Serbia as well as abroad;
- non-residents – for the income generated in the territory of Serbia.
For the purposes of Article 87(2) of the Personal Income Tax Act (hereinafter: the Act) income means the sum of the following:
1) salaries as defined in Articles 13 through 15b of the Act;
2)taxable income from independent activities referred to in Article 33(2) and Article 40 of the Act;
3)taxable income from copyright, related rights and industrial property rights referred to in Articles 55 and 60 of the Act;
4)taxable income from leasing real estate referred to in Article 65v of the Act;
5)taxable income from leasing movable property referred to in Paragraphs 3 and 4 of Article 82 of the Act;
6)taxable income of sportsmen and sports experts referred to in Article 84a of the Act;
7)taxable other income from Article 85 of the Act;
8)income of resident taxpayers from all categories listed under points 1) through 7) above earned and taxed in another state, disbursed in Serbia in the year for which tax is assessed, based on the statistical data released by the relevant state agency.
The average annual salary per employee paid in the Republic of Serbia during Fiscal Year 2020 is RSD 995,808. Accordingly, all natural persons, residents as well as non-residents, whose net income earned in the territory of the Republic of Serbia during Fiscal Year 2020 exceeds RSD 2,987,424 must file an individual income tax return for 2020.
Taxpayers with a net income exceeding the above deductible limit must pay income tax at the rate of 10% for any excessive income up to RSD 5,974,848, whereas for any income over RSD 5,974,848 the applicable tax rate is 15%.
Those who have to pay annual personal income tax are entitled to deduct the following amount as a personal allowance:
- RSD 398,323 for the taxpayer;
- RSD 149,371 for each dependent family member.
The sum of all personal allowances cannot exceed 50% of the person’s taxable income.