Rules Specifying the Manner of Exercising the Right to a Reduction of the Tax Base for Salary Tax For Newly Settled Taxpayers


After a 7-month delay, the Rules were published and they came into effect on 14th November 2020. As of the effective date of these Rules the right to a tax relief for newly settled taxpayers becomes available.

The tax base used to calculate salary tax for a newly settled taxpayer, for the remuneration he/she receives on the basis of fixed-term employment with a qualified employer, if the position that he/she occupies requires special professional qualifications and cannot be easily filled in the local labour market, is reduced by 70%.

A qualified employer is:

  • a resident of the Republic of Serbia which is not related to the new hire’s former employer;
  • a resident of the Republic of Serbia which establishes a contractual relationship with a newly settled taxpayer who had qualified for at least three years during the 25-year period preceding the date of employment as a resident of the Republic of Serbia.

A newly settled taxpayer is:

  • a person who had not predominantly resided in the territory of the Republic of Serbia within a period of 24 months preceding the date of the execution of an employment contract with a qualified employer;
  • a person who at the time of entering into a contract of employment with a qualified employer is younger than 40, and had during the 12 months preceding the execution of such agreement predominantly resided outside the territory of the Republic of Serbia for educational or professional purposes.

The Personal Income Tax Act and the Rules provide for a number of other conditions to be met apart from those mentioned herein.

For any additional enquiries, please feel free to contact our in-house tax department.

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