Tax legislation-stimulating small businesses

On December 29, 2015, the National Assembly of the Republic of Serbia passed seven tax-related laws aimed at improving the efficiency of tax legislation:

1) Use, hold and carry of goods
Tax Law Amendment 2) Tax Procedure and Tax Management Law
Amendment Law 3) Capital Market Law Amendment Law
4) Corporate Profit Tax Law Amendment Law
5) “Individual Income Tax Law Amendment”
6) “Compulsory Social Security Insurance Payment
Law Amendment 7) “Republic Administrative Expenses Law Amendment”

Some of the more important amendments involve stimulus to businesses (especially small businesses) and employment rates. Small companies and entrepreneurs are now encouraged to hire more labor force through tax rebates. That is, if they hire at least two new employees, every small and micro company and every entrepreneur will receive a 75% tax rebate on the salary of a new employee between January 1, 2016 and December 31, 2017 . Large and medium-sized companies retain 65% tax refund rights for 1-9 new employees, and 70% tax refund rights for 10-99 new employees (75% for 100 and more new employees) (Individual Income Tax Law).

The newly revised “Tax Procedures and Tax Administration Law” (hereinafter referred to as “TPATAA”) now stipulates that individuals and companies will be subject to lighter penalties for failing to submit appropriate tax returns and/or pay taxes. Now, the personally expected minimum fine is 5.000 RSD instead of the previous 50.000 RSD, and the company’s minimum fine is now 100.000 RSD. It used to be 150.000 RSD.

In addition, debts caused by social security contributions (that is, failure to fulfill their payment obligations) are not statutes of limitation.

Through the revision of TPaTAA, the execution order of tax debt has been cancelled and is now as follows: i) main debt ii) accrued interest iii) execution cost.

Following the legislative plan to stimulate further growth in employment and development of small businesses, the “Compulsory Social Security Contribution Law” introduced provisions supporting the “Individual Income Tax Law”. From January 1, 2016 to December 31, 2017, if they hire at least two new employees, every small and micro company and every entrepreneur will receive the social security contributions paid by the new employees. 75% refund. Medium and large companies reserve the right to recover 65% of 1-9 new employees, 70% of 10-99 new employees, and 75% of 100 or more new employees’ contribution refunds.

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