CORPORATE INCOME TAX ACT("Off. Herald of the RS", Nos. 25/2001, 80/2002, 80/2002 - another Act, 43/2003, 84/2004, 18/2010, 101/2011, 119/2012, 47/2013, 108/2013, 68/2014 - another Act, 142/2014, 91/2015 - authentic interpretation, 112/2015, 113/2017, 95/2018, 86/2019, 153/2020 and 118/2021) |
TAXPAYER
Article 1
A company i.e. an enterprise, i.e. other legal person established for performing an activity for the purpose of acquiring income shall pay the corporate income tax as a taxpayer.
A cooperative that earns revenues by selling products on the market or by providing services for a fee shall also be a taxpayer.
A taxpayer under this Act shall also be some other legal person that is not established for earning income, but has been established in accordance with the law in order to achieve other objectives set by its bylaws, if it earns revenues by selling products on the market or by providing services for a fee (hereinafter: a non-profit organization).
A non-profit organization referred to in paragraph 3 of this Article shall include, in particular: institution founded by the Republic of Serbia, autonomous province, local self-government unit, political organization, trade union organization, chamber, church and religious community, association, foundation and endowment.
Notwithstanding paragraphs 1 to 3 of this Article, a legal person that, in accordance with the law governing taxation by a special tax levied according to a ship’s tonnage, meets the requirements, and instead of the tax levied on part of the income opts for, in accordance with that law, payment of a special tax levied according to the ship’s tonnage, shall not be a taxpayer for such part of the income in accordance with this Act.
Article 2
A taxpayer referred to in Article 1 of this Act shall be a resident of the Republic of Serbia (hereinafter: a resident taxpayer) who is subject to taxation for any income it generates in the territory of the Republic of Serbia (hereinafter: the Republic) and outside of it.
A resident taxpayer shall mean, in terms of this Act, a legal person incorporated or having its place of effective management and control in the territory of the Republic.
Article 3
A non-resident of the Republic (hereinafter: non-resident taxpayer) shall be subject to taxation for any income it generates through a permanent operating unit in the territory of the Republic in the way prescribed by this Act, unless otherwise stipulated by an international treaty on avoidance of double taxation.
A non-resident taxpayer shall mean, in terms of the present Act, a legal person incorporated and having its place of effective management and control outside of the territory of the Republic.
Article 3a
For the purpose of applying the provisions of this Act, a jurisdiction with a preferential tax system shall be understood to mean a territory having tax sovereignty in which the legislation which provides for a considerably lower taxation of the income of legal persons is applicable, which goes for either all legal persons or those meeting special requirements, as well as the dividends they distribute among their founders as compared with those stated in the provisions of this Act and the law governing the citizens’ income tax, i.e. which provides for making it impossible or difficult for tax authorities of the Republic of Serbia to establish the beneficial owners of the legal persons and for making it impossible or difficult to determine the tax-related facts which would be of importance for establishing the tax liabilities under the regulations of the Republic of Serbia (hereinafter: the jurisdiction with a preferential tax system).
A non-resident legal person from a jurisdiction with a preferential tax system shall be understood to mean a non-resident legal person:
1) Which was incorporated in the territory of a jurisdiction with a preferential tax system, or
2) Whose registered head office is in the territory of a jurisdiction with a preferential tax system, or
3) Whose seat of management is in the territory of a jurisdiction with a preferential tax system, or
4) Whose place of effective management is in the territory of a jurisdiction with a preferential tax system.
Item 2 of this Article shall not be applicable in the case where a non-resident legal person may be regarded as a resident of another contracting state for the purpose of applying an international treaty on the avoidance of double taxation between that state and the Republic of Serbia.
For the purpose of applying paragraph 1 of this Article, the Minister of Finance shall set the list of jurisdictions with a preferential tax system.
Article 4
A permanent operating unit shall be understood to mean any permanent place of business through which a non-resident taxpayer conducts its business, in particular the following:
1. Branch;
2. Plant;
3. Representative office;
4. Place of production, factory or workshop;
5. Mine, quarry or other site of exploitation of natural resources.
A permanent operating unit shall also comprise a permanent or movable construction site, construction or mounting works, if they last more than six months, namely:
a) One or several construction or mounting projects executed concurrently, or
b) Several construction or mounting projects executed one after the other without interruption.
If a person, while representing a non-resident taxpayer, has the authority to conclude contracts on behalf of that taxpayer and exercises such authority, it shall be deemed that the non-resident taxpayer has a permanent operating unit with regard to the operations performed by the representative on behalf of the taxpayer.
A permanent operating unit shall not exist if the non-resident taxpayer conducts its business through a commissioner, broker or any other person which in the conduct of its own business acts in its own name, but for the taxpayer's account.
Neither shall the following make up a permanent operating unit:
1. Keeping stocks of goods or materials belonging to a non-resident taxpayer exclusively for purposes relating to storage, presentation or delivery, or using premises intended for such purposes exclusively;
2. Keeping stocks of goods or materials belonging to a non-resident taxpayer exclusively for the purpose of their being processed in another enterprise or by a sole trader;
3. Keeping a permanent place of business exclusively for the purpose of procuring goods or collecting information for the needs of a non-resident taxpayer or for the purpose of engaging in any other activity of preparatory or accessory nature for the needs of a non-resident taxpayer.
Article 5
A non-resident taxpayer who is conducting a business in the territory of the Republic by operating through a permanent operating unit which is maintaining ledgers in accordance with the regulations governing accounting (a branch or other organizational parts of a non-resident taxpayer which are conducting a business), shall determine the taxable income in keeping with the present Act and submit the tax balance sheet and tax declaration for the permanent operating unit.
A non-resident taxpayer who is conducting a business through a permanent operating unit which is not maintaining ledgers in accordance with the regulations governing accounting, shall keep in that permanent operating unit the records covering all data on income and expenditures, as well as all other data of importance for establishing the income generated by that unit by operating in the territory of the Republic, and shall submit the tax balance sheet and tax declaration.
The tax balance sheet and the tax declaration shall also be submitted by a non-resident taxpayer that conducts business in the territory of the Republic through a permanent operating unit which is not considered to be a permanent operating unit according to an international treaty on avoidance of double taxation.
TAX BASE
Article 6
Tax base for the income of legal persons shall be the taxable income.
Taxable income shall be determined in the tax balance sheet by adjusting the taxpayer's income declared in the income statement which has been drawn up in conformity with the international accounting standards (hereinafter: IAS), i.e. international financial reporting standards (hereinafter: IFRS), i.e. international financial reporting standard for small and medium sized legal entities (hereinafter: IFRS for SMEs) and regulations governing the accounting, in the manner determined by this Act.
The taxable income of a taxpayer who is not applying the IAS, i.e. IFRS and IFRS for SMEs pursuant to the regulations that govern the accounting, shall be determined in the tax balance sheet by adjusting the taxpayer’s income declared in accordance with the method of recognizing, measuring and estimating the revenues and expenditures prescribed by the Minister of Finance, in the way provided by this Act.
Article 7
The expenditures determined in the income statement in conformity with the IAS, i.e. IFRS and IFRS for SMEs, as well as the regulations governing the accounting, apart from the expenditures which this Act requires a different manner of determining, shall be recognized when establishing the taxable income.
In establishing the taxable income of a taxpayer who is not applying the IAS, i.e. IFRS and IFRS for SMEs pursuant to the regulations governing the accounting, the expenditures established in accordance with the method of recognizing, measuring and estimating the expenditures prescribed by the Minister of Finance shall be recognized, with the exception of the expenditures which this Act requires to be determined in some other way.
Article 7a
The following shall not be recognized as charge to expenditures:
1) Non-documentable expenditures;
2) Adjustments to value of individual claims from a person simultaneously owed to, up to the amount owed to such a person;
3) Gifts and contributions made to political organizations;
4) Gifts the recipient of which is an associated person as referred to in Article 59 of this Act;
5) Interest payable for untimely payment of taxes, contributions and other public charges;
5a) Costs of compulsory collection of tax and other debts, costs of a tax misdemeanor proceeding, and other misdemeanor proceedings conducted by a competent authority;
6) Fines levied by a competent authority, liquidated damages and penalties;
7) Default interest between associated persons;
8) Expenditures incurred for the purpose other than conducting business activity, unless otherwise provided by this Act.
Article 8
The cost of materials and the acquisition value of sold merchandise shall be recognized in the amounts calculated by the weighted average price method or FIFO method.
The provisions of Article 61 of this Act shall apply in regard to the acquisition price of materials and the value of the merchandise procured from associated persons.
Article 9
The costs of wages i.e. salaries shall be recognized in the amount calculated as charge to operating costs.
An employee’s income deemed as salary in terms of the law governing taxation of citizens’ income, including the income that is not taxable up to the amount specified by that law, shall be recognized as expense in the tax balance sheet for the period in which it was paid, i.e. realized.
Article 9a
Calculated severance payments and pecuniary compensations on the basis of retirement or termination of employment on other grounds, shall be recognized as expenditure in the tax balance sheet in the tax period in which they have been paid out.
Article 10
Depreciation of fixed assets shall be recognized as expenditure up to the amount and in the manner determined by this Act.
The fixed assets referred to in paragraph 1 of this Article shall include the tangible assets the service life of which is longer than a year and which are recognized under the regulations governing the accounting and IAS, i.e. IFRS and IFRS for SMEs, in business ledgers of a taxpayer as fixed assets, with the exception of non-expendable natural assets, as well as the intangible assets, other than goodwill.
The assets referred to in paragraph 2 of this Article, except for intangible assets, shall be classified in five groups the depreciation rates of which being as follows:
1) I Group 2.5%;
2) II Group 10%;
3) III Group 15%;
4) IV Group 20%;
5) V Group 30%.
Depreciation for the fixed assets classified as Group I shall be determined by applying the pro rata method, to the base made up of the acquisition value of assets, for each fixed asset individually, and in case where the fixed assets from this group had been acquired in the course of a tax period, it shall be determined by applying the pro rata method in proportion to the time from when the calculation of depreciation has started, up to the end of tax period.
Depreciation for the fixed assets classified as Group II-V shall be determined by applying the diminishing method to the value of assets classified in groups.
The base for the depreciation referred to in paragraph 5 of this Article shall be the acquisition value in the first year and the non-written off value thereafter.
The fixed assets classified in Group I shall be real estate.
As an exception, fixed assets that comprise immovable and movable parts shall be classified in groups according to the method they were recorded in business ledgers of a taxpayer in accordance with regulations governing the accounting.
Depreciation of intangible assets shall be done by applying the pro rata method in accordance with service life determined at the moment of recognition of such assets in the business ledgers of a taxpayer in accordance with regulations governing the accounting and IAS, i.e. IFRS and IFRS for IAS, to the base made up of the acquisition value of each individual asset.
The Minister of Finance shall regulate in greater detail the method of classification of fixed assets from paragraph 3 of this Article into groups, the types of intangible assets, as well as the method of determining the depreciation.
Article 10a
Where a fixed asset to which the provisions of Article 10 of this Act are applicable has been procured on the basis of a transaction with an associated person from Article 59 of this Act, the base for its depreciation shall be the smaller of the following two amounts:
1) Transfer procurement price of the fixed asset in terms of Article 59 of this Act;
2) Procurement price of the fixed asset as established by applying the principle of "arm's length" in terms of Articles 60 and 61 of this Act.
Article 10b
Depreciation of fixed assets shall be recognized as expenditure up to the amount and in the manner determined by this Act.
The fixed assets referred to in paragraph 1 of this Article shall include the tangible and intangible assets the service life of which is longer than one year and which are recognized, in accordance with the regulations that govern the accounting and with the IAS, i.e. IFRS and IFRS for SMEs, in business ledgers of taxpayers as fixed assets, with the exception of non-expendable natural assets and goodwill.
The fixed assets referred to in paragraph 2 of this Article, except for intangible assets, shall be classified into five groups the depreciation rates of which being as follows:
1) I Group 2.5%;
2) II Group 10%;
3) III Group 15%;
4) IV Group 20%;
5) V Group 30%.
Depreciation of fixed assets referred to in paragraph 3 of this Article shall be determined by applying the pro rata method, to the base made up of the acquisition value of assets, for each fixed asset individually, and in case the fixed have been acquired in the course of a tax period, it shall be determined by applying the pro rata method in proportion to the time from which the calculation of depreciation has started, until the end of the tax period.
If the depreciation of fixed assets, in line with the accounting regulations and the IAS, i.e. IFRS and IFRS for SMEs (hereinafter referred to as: the accounting depreciation) has been determined in the amount lower than the one which would be determined by applying the rates from paragraph 3 of this Article, the accounting depreciation shall be recognized as an expenditure.
The fixed assets that comprise immovable and movable parts shall be classified in groups according to the method in which they have been recorded in the business ledgers of a taxpayer in accordance with regulations governing the accounting.
Depreciation of investment property which, after the initial recognition, is valued in the business ledgers of a taxpayer according to per fair value method, shall be determined by applying the rate from paragraph 3, item 1) of this Article, to the acquisition value.
Depreciation of intangible assets shall be recognized as expenditure in the amount of the accounting depreciation.
The Minister of Finance shall regulate in greater detail the method of classification of fixed assets from paragraph 3 of this Article into groups, types of intangible assets, as well as the way of determining the depreciation.
Articles 11-14
(Deleted)
Article 15
The outlays in the aggregate maximum amount of 5% of the total revenue shall be recognized as expenditures in a taxpayer's tax balance sheet when intended for:
1) Health care, educational, scientific, humanitarian, religious and sport-related purposes, environmental protection, as well as contributions made to the social welfare institutions i.e. providers of services established in keeping with the law governing social welfare;
2) Humanitarian aid i.e. the remediation of consequences arising from an emergency that have been incurred in the Republic, autonomous province, i.e. local self-government unit.
The outlays referred to in paragraph 1, item 1) of this Article shall be recognized as expenditures only if payments were made to the persons registered, i.e. established for such purposes in accordance with special regulations, which use the stated payments exclusively for the purpose of conducting the activities referred to in paragraph 1, item 1) of this Article.
Outlays for investments in the field of culture, including cinematography shall be recognized as expenditures amounting to not more than 5% of the total revenue.
Membership fees paid to chambers, alliances and associations shall be recognized as expenditures in the tax balance sheet at the maximum up to 0.1% of the total revenue.
Membership fees whose amount is determined by law shall be recognized as expenditures, in the amount prescribed by law.
Entertainment expenses shall be recognized as expenditures in the amount of up to 0.5% of the total revenue.
The minister in charge of cultural affairs shall enact more detailed regulations as to what is meant by investment in the field of culture for the purposes of this Act, after having obtained the opinion of the Minister of Finance.
Article 16
The written off value of individual receivables which are reported as revenue, in accordance with the regulations on accounting and the IAS, i.e. IFRS and IFRS for SMEs, other than receivables referred to in Article 7a, item 2), of this Act, shall be recognized as a charge to expenditures, on condition that:
1) It is proven beyond any doubt that such receivables were previously included in the taxpayer's revenues;
2) Such receivables have been written off in the taxpayer’s books as uncollectable;
3) The taxpayer presents evidence that such claims have been filed in a lawsuit, i.e. that the enforcement proceedings for collection of the claims have been initiated, or that the claims have been filed in the liquidation or bankruptcy proceedings conducted against the debtor.
The written off value of individual receivables which are not reported as revenue, in accordance with the regulations on accounting and the IAS, i.e. IFRS and IFRS for SMEs, other than receivables referred to in Article 7a, item 2), of this Law, shall also be recognized as a charge to expenditures, if the taxpayer fulfils the conditions stipulated by provisions of paragraph 1, items 2) and 3) of this Article.
Notwithstanding paragraphs 1 and 2 of this Article, the written off value of individual receivables shall be recognized as a charge to expenditures, provided that such receivables have been included in a financial restructuring, conducted in the manner prescribed by a law governing consensual financial restructuring of companies.
Notwithstanding paragraphs 1 and 2 of this Article, the written-off value of individual receivables included in the adopted prepackaged reorganization plan, confirmed by a final decision passed in accordance with a law governing bankruptcy, shall be recognized as a charge to expenditures.
The value of written off individual claims for which the requirements referred to in paragraph 1, items 1) and 2), i.e. paragraph 2 of this Article are met, shall be recognized as a charge to expenditures, on condition that the costs of filing a lawsuit against an individual debtor are higher than the total amount of the claim against such debtor.
The cost of filing a lawsuit in terms of paragraph 5 of this Article shall be understood to mean the fees and other public revenues which are payable when filing a claim in keeping with a law that regulates the court fees.
The adjusted value of individual receivables referred to in paragraphs 1 and 2 of this Article shall be recognized as a charge to expenditures if at least 60 days have expired from the deadline for their collection, i.e. realization until the end of the tax period.
For the amount of expenditures on the basis of corrected value of the individual claims referred to in paragraph 7 of this Article that were recognized in the tax balance sheet, the revenues shall be increased in the tax balance sheet for the tax period in which the taxpayer exercises the write-off of the value of the same claims, provided that such taxpayer has not cumulatively satisfied the requirements referred to in paragraph 1, i.e. paragraph 2, i.e. paragraph 5 of this Article.
Expenditure that was not recognized based on the value adjustment of individual receivables in the tax period in which it was declared, shall be recognized in the tax period in which the requirements referred to in paragraph 1, i.e. paragraph 2, i.e. paragraph 7 of this Article have been met.
All of the written off, adjusted and other receivables referred to in paragraphs 1, 2, 3, 4, 5, 7 and 9 of this Article, which have been recognized as expenditure, and which get collected subsequently or for which the creditor withdraws the claim, motion for enforcement i.e. claim of a receivable, at the moment of collection or withdrawal of the claim, motion for enforcement i.e. claim of a receivable, shall be included in the taxpayer's revenues.
All of the written off, adjusted and other claims, which have not been recognized as expenditures and which are collected subsequently, at the moment of collection shall not be included in the tax payer’s revenues.
Article 16a
A loss incurred in sale of individual receivables shall be recognized as charge to expenditures in the amount reported is the income statement of the taxpayer, during the tax period in which the sale of these receivables was made.
In case that, based on the receivables referred to in paragraph 1 of this Article, there was a value adjustment that was recognized as a charge to expenditures in some of the previous tax periods in line with Article 16, paragraph 7 and Article 22a paragraph 1 of this Act, such expenditure shall remain recognized without the obligation to comply with requirements referred to in Article 16, paragraph 1, item 3), i.e. Article 16, paragraph 2 of this Act.
Articles 17 and 18
(Deleted)
Article 19
The total accounted interest, other than interest charged for untimely payment of taxes, contributions and other public charges, shall be recognized as a charge to expenditures in the tax statement.
In case of credits received from associated persons, the accounted interest shall be reduced in the manner determined by Article 62 of this Act.
Article 20
Any interest and related costs based on a loan extended to a permanent operating unit referred to in Article 4 of this Act by its non-resident head office, shall not be recognized as an expenditure in that permanent operating unit's tax statement.
A compensation based on copyright and related rights and industrial property rights paid by a permanent operating unit referred to in Article 4 of this Act to its non-resident head office, shall not be recognized as an expenditure in the permanent operating unit's tax statement.
Article 21
(Deleted)
Article 22
The taxes, contributions, fees and other public charges which are not dependent on the business operation results and have been paid during the tax period shall be recognized as a charge to expenditures in the tax balance sheet.
Article 22a
The increase in the adjusted value of the balance asset claims and reservations for the off-balance item losses in the amount calculated in the level of a bank, which are declared in the profit-and-loss statement as a charge to expenditures in the tax period in accordance with such bank’s bylaws, shall be recognized as a charge to expenditures in the tax balance sheet of the bank concerned, in accordance with the regulations of the National Bank of Serbia.
Write-off of the value of individual claims in accordance with the provisions of Article 16, paragraphs 1 to 6 of this Act shall be recognized as charge to expenditures of the bank.
Notwithstanding paragraph 2 of this Article, write-off of the value of individual claims based on credit approved to a non-related party in terms of this Act, shall be recognized as a charge to the expenditures of the bank, under the condition that from the moment of maturity of such claim at least two years have passed, accompanied by submitting the documentation representing the basis for proving lack of capacity of the debtor to perform its monetary obligations (for example, documentation from the credit file of a debtor on settling obligation of the debtor towards the bank in the last twelve months, correspondence and other documentation on the contacts of the bank and debtor related to the collection of receivables and measures the bank has taken for collection).
Notwithstanding paragraph 2 of this Article, write-off of the value of residual portion of an individual claim of the bank, which has not been collected from the funds realized by the sale of property executed in accordance with the law, shall be recognized as a charge to expenditures.
Notwithstanding paragraphs 2 and 3 of this Article, write-off of the value of individual receivables based on credits that are, in terms of the regulations of the National Bank of Serbia, considered as problematic credits, executed in accordance with the regulations of the National Bank of Serbia, shall be recognized as a charge to expenditures of the bank.
An amount of expenditures declared in the bank’s profit-and-loss statement based on the reduction of debt borne by the bank in the amount defined in accordance with the law regulating the conversion of housing credits indexed to Swiss francs shall be recognized as a charge to expenditures of the bank.
All written-off, adjusted and other receivables from paragraphs 1 to 5 of this Article that are recognized as expenditures, and that are subsequently collected or in relation to which a creditor withdraws a claim, motion for enforcement, i.e. a claim in bankruptcy proceeding, at the moment of collection or withdrawal of the claim, motion for enforcement, i.e. withdrawal of claim in bankruptcy, shall enter the bank’s revenue.
All written-off, adjusted and other receivables that have not been recognized as expenditures, and that are subsequently collected, shall not enter the revenue of the bank in the moment of collection.
Article 22b
The executed long-term provisions made for the renewal of natural resources, for warranty period costs and retained caution money and deposits, as well as other obligatory long-term reservations in conformity with law, shall be recognized as a charge to expenditures.
Other long-term provisions that comply with the requirements for recognition in line with the IAS, i.e. IFRS and IFRS for SMEs, shall also be recognized as a charge to the expenditures in the amount of the used portion of those provisions in the tax period, i.e. settled liabilities and outflow of the resources based on such provisions.
Article 22c
The expenditures incurred on the basis of depreciated property, which is determined as the difference between the present net value of property established in accordance with the IAS, i.e. IFRS and its estimated recoverable value, shall not be recognized as a charge to expenditures in the tax balance sheet, but they shall be recognized in the tax period in which that property was alienated, i.e. used, i.e. in which such property was damaged due to force majeure.
Notwithstanding paragraph 1 of this Article, the expenditures incurred on the basis of depreciation of taxpayer's share in the capital of the privatized entity in the procedure of restructuring, acquired by conversion of the taxpayer’s receivables into a share in the capital of such entity, shall be recognized as a charge to the expenditures in the tax balance sheet.
Article 22d
The costs which are directly related to research and development that the taxpayer performs in the Republic can be recognized in double of their amount in the taxpayer’s tax balance sheet as a charge to expenditures.
In terms of paragraph 1 of this Article, research shall be understood to mean the original or planned research, undertaken for the purpose of obtaining new scientific or technical knowledge and understanding, whereas the development shall imply the application of results of the research or application of other scientific achievement or production design of new, significantly improved materials, devices, products, processes, systems or services, prior to commencement of commercial production or use.
The provisions of this Article shall not apply to the costs of research, incurred for the purpose of finding and developing oil, gas or mineral deposits in extractive industry.
The Minister of Finance shall in greater detail define what is meant by costs which are in direct relation to research and development, as well as the conditions and the manner of exercising the rights from paragraph 1 of this Article.
Article 23
In order to determine the taxable income, the revenues declared in the amounts set by the profit-and-loss statement shall be recognized, in conformity with the IAS, i.e. IFRS, i.e. IFRS for SMEs and regulations that govern the accounting, with the exception of the revenues whose determination is prescribed differently by this Act.
In order to determine the taxable income of a taxpayer who, according to the regulations that govern accounting, does not apply the IAS, i.e. IFRS, i.e. IFRS for SMEs, the revenues determined in accordance with the method of recognizing, measuring and assessing revenues prescribed by the Minister of Finance shall be recognized, except the revenues whose determination is prescribed differently by this Act.
Article 24
(Deleted)
Article 25
Revenue that a resident taxpayer earns on the basis of dividends and a shares in the income, including also the dividend referred to in Article 35 of this Act, from another taxpayer, shall not be included in the tax base.
Revenue that a resident taxpayer earns from the interest on the basis of debt securities issued, in accordance with the law, by the Republic, an autonomous province, a local self-government unit or the National Bank of Serbia, shall not be included in the tax base.
Revenue that a resident taxpayer, established in accordance with the regulations governing investment funds, earns from the alienation of property referred to in Article 27, paragraph 1 of this Act, shall not be included in the tax base.
The Minister of Finance shall regulate in greater detail the way of excluding the revenue referred to in paragraphs 1, 2 and 3 of this Article from the tax base.
Article 25a
The revenue generated on the basis of non-utilized long-term reservations, which were not recognized as expenditure during the tax period in which they were executed, shall not be included in the tax base for the tax period in which they were declared.
The revenue arising in relation to expenditures which were not recognized during the tax period in accordance with Article 7a of this Act shall not be included in the tax base for the tax period in which they were declared.
The revenue of a taxpayer, who is a concession grantor in line with the concession agreement (hereinafter referred to as: the concession grantor), generated on the basis of the transfer of non-pecuniary assets, free of charge, which, in the course of implementation of the concession agreement, was carried out by a private partner, i.e. a special purpose vehicle, in line with the regulations governing the public-private partnership (hereinafter referred to as: private partner), shall not be part of the tax base in the tax period in which they have been declared, under the condition that the estimated value of the concession amounts to at least 50 million Euros.
The revenue of taxpayer accrued based on the executed cancellation of debt that a taxpayer had towards the users of public assets, defined in line with the law governing the budget system, towards the banks in bankruptcy and chambers of commerce, shall not be part of the tax base within the tax period in which they have been declared, in case when the subject debts have been included in the previously prepared restructuring plan, which has been confirmed by a final decision in line with the law governing bankruptcy.
The effects of change of the accounting policy, occurring due to the first application of IAS, i.e. IFRS and IFRS for SMEs, based on which, in line with the accounting regulations, correction of relevant positions in the balance sheet is made, shall be recognized as revenue, i.e. expenditure in the tax balance, starting from the tax period in which such correction was made.
Revenues and expenditures from paragraph 5 of this Article shall be recognized in equal amounts in five tax periods.
The minister of finance shall regulate in greater detail the way of excluding the revenues referred to in paragraphs 1, 2, 3, 4, 5 and 6 of this Article from the tax base.
Article 25b
Qualified revenue, generated by the taxpayer, owner of a copyright or other related right, based on the fee for the use of the deposited work of authorship or other subject-matter of related right, except for the fee for the transfer of work of authorship or related right entirely, may be excluded from the tax base in the amount of 80% of thus generated revenue, if the taxpayer opts for this, and in accordance with the conditions and in the manner set forth by this Article,.
Qualified revenue, from paragraph 1 of this Article, shall be excluded from the tax base, decreased by the amount of the total historical or current tax recognized expenditures, related to research and development activities, the consequence of which was the generation of that work of authorship or subject-matter of related right, in line with the provisions of Articles 7, 7а, 8, 9, 9а, 10, 10а, 10b, 15 and 22d of this Act (hereinafter referred to as: qualified expenditures).
For the purpose of paragraph 1 of this Article, a qualified revenue, after the decrease referred to in paragraph 2 of this Article, shall be deemed to be that part of the taxpayer’s revenue, which is based on the fees for the use of the deposited work of authorship or subject-matter of related right, except for the fees for the transfer of authorship or related right entirely, which is proportionate to the participation of qualified expenditures related to research and development activities, the consequence of which was the generation of that deposited work of authorship and the subject-matter of related right in the total costs related to that deposited work of authorship or subject-matter of related right.
It shall be considered, in terms of this Act, that the deposited work of authorship or subject-matter of related right is a work of authorship or subject-matter of related right defined by the law governing the authorship and related rights, recorded by depositing in the registry of a competent authority.
The provisions of this Article shall be applied mutatis mutandis to those revenues as well, which are generated by the taxpayer, owner of the right or applicant, in relation to an invention, based on assignment of rights in relation to the discovery with a fee based on a license agreement, excluding a fee generated for the transfer of right in relation to the invention, based on the law governing patents.
The taxpayer shall separately declare the revenues from paragraph 1 of this Article, in his tax balance sheet, as well as to prepare, and at the request of the Tax Administration, to deliver the special documentation, in the manner and shape prescribed by the Minister of Finance.
The Minister of Finance shall, while relying on the sources related to good practice of tax incentives in the field of intellectual property rights of the Organization for Economic Cooperation and Development, more closely define the conditions and the manner of exclusion of qualified revenues from the tax base.
Article 26
For the purpose of calculation of taxable income in conformity with the provisions of the law governing accounting, the production costs shall be recognized in the value of the inventory of unfinished production, semi-finished products and finished products.
In cases of a long production cycle and increased seasonal effect on the volume of activities, it shall be allowed to also add a belonging part of managerial and sales overhead and financing costs to the value of inventory referred to in paragraph 1 of this Article.
The value of inventory calculated pursuant to paragraphs 1 and 2 of this Article may not be bigger than their sales value on the day of submission of tax balance sheet.
Articles 26a-26l
(Deleted)
Article 27
A taxpayer makes a capital gain by sale, i.e. other transfer with compensation (hereinafter: sale) of:
1) Real estate he used i.e. is using as basic asset for performing activity, including real estate under construction;
2) Intellectual property rights;
3) Shares in the capital of legal persons and stocks and other securities, which, according to the IAS, i.e. IFRS and IFRS for SMEs, represent long-term financial placements, with the exception to bonds issued in conformity with the regulations governing settlement of commitments of the Republic based on a loan for economic development, citizens’ foreign exchange savings and debtor securities whose issuer, in conformity with the law, is the Republic, an autonomous province, a local self-government unit or the National bank of Serbia;
4) Investment units of an investment fund, in conformity with the law regulating the investment funds;
5) Digital assets, unless the taxpayer, in terms of the law governing digital assets, holds a permit to provide services related to digital assets and has acquired digital assets exclusively for resale purposes as part of the services he provides related to digital assets in accordance with that law.
Revenue made by a non-resident taxpayer from the sale of assets referred to in paragraph 1, items 1), 3) and 4) of this Article, as well as from the sale of the real estate in the territory of the Republic not used by him for conducting business shall also be considered as a capital gain.
A capital gain shall represent the difference between the sale price of the property referred to in paragraphs 1 and 2 of this Article (hereinafter: the property) and its acquisition price established in accordance with the provisions of this Act.
If the difference referred to in paragraph 3 of this Article is negative, a capital loss shall be involved.
A taxpayer established in accordance with the regulations governing investment funds shall not determine the capital gain i.e. loss in accordance with this Article.
Article 28
For the purpose of determining a capital gain, in terms of this Act, the sale price shall be understood to mean the contract price i.e. in the case of sale to an associated person as referred to in Article 59 of this Act, the market price, if the contract price is lower than the market one.
The contract i.e. market price referred to in paragraph 1 of this Article shall be the price without tax on the transfer of absolute rights, i.e. value-added tax.
When transferring a right by exchanging it for another right, the sale price shall mean the market price of the right obtained through exchange, adjusted by any received or paid difference in money.
Article 29
For the purposes of determination of a capital gain, the acquisition price, in terms of the present Act, shall be a price at which a taxpayer has acquired the property, decreased by depreciation determined in accordance with this Act.
The acquisition price in terms of this Article shall be adjusted to estimated i.e. fair value, established in accordance with the IAS, i.e. IFRS, i.e. IFRS for SMEs and the adopted accounting policies, if the change to fair value has been declared wholly as revenue during the period in which it was made.
The acquisition price of property acquired by conversion of a taxpayer’s receivable into a capital share in a privatized entity in the procedure of restructuring, shall be the lowest depreciated value of that property after executed conversion, determined in compliance with the IAS, i.e. IFRS and the accounting policies adopted, except in the case referred to in paragraph 2 of this Article.
If the price at which the property was acquired has not been declared in the taxpayer’s ledgers, or has not been declared in accordance with the provisions of paragraphs 1 and 2 of this Article, the acquisition price for the purpose of determination of a capital gain shall be the market price on the date of acquisition, determined by a competent tax office, in the manner prescribed by provisions of paragraphs 1 and 2 of this Article.
In the case of sale of real estate under construction, the acquisition price shall be the amount of construction costs declared until the date of sale in accordance with the IAS i.e. IFRS, i.e. IFRS for SMEs and the regulations governing the accounting.
In the case of real estate acquired through founder’s contribution or by increasing the founder’s contribution, the acquisition price shall be the market price of the real estate on the date of contribution entering the company.
For real estate acquired prior to 1 January 2004, the acquisition price shall be the non written-off value of the real estate determined on the day of 31 December 2003, in accordance with the accounting regulations applicable to the financial statements for the year of 2003.
The acquisition price referred in paragraph 7 of this Article shall be reduced on the basis of depreciation determined in line with this Act.
In the case of securities which are traded on the regulated market, in terms of the law regulating the securities and other financial instruments market, the acquisition price shall be the price documented by the taxpayer as actually paid, and if the taxpayer has no adequate documentation - the lowest market price realized on the regulated market within a period of a year preceding the sale of such securities or within the period of trading, if trading lasted less than a year.
In the case of securities which are not traded on the regulated market, the acquisition price of securities shall be the price the taxpayer documents as actually paid, and if he has no adequate documentation - their nominal value.
In the case of securities acquired on the basis of the founder’s contribution or by increasing the founder’s contribution, the acquisition price shall be the market price valid on the regulated market on the day of entrance of the contribution in the company, or if such price was not formed, the nominal value of securities on such day.
The acquisition price of a capital share in a legal person and of intellectual property rights shall be the price the taxpayer documents as actually paid. The acquisition price of a capital share in a legal person and of intellectual property rights, acquired through the founder’s contribution or by increasing the founder’s contribution shall be the market price on the day of contribution.
The acquisition price of an investment unit shall consist of a net value of the fund’s property per investment unit on the date of payment, increased by the purchase fee if the managing company charges one, in conformity with the regulations governing the investment funds, in case the taxpayer acquires the investment unit by paying the funds into the investment fund.
The acquisition price of digital assets shall be the price that the taxpayer documents as actually paid, i.e. if the digital assets have been acquired by participating in the provision of computer transaction certification in information systems related to certain digital assets (so-called digital asset mining), the acquisition price shall be the value of digital assets declared in the ledgers of a taxpayer, in accordance with the IAS, i.e. IFRS, i.e. IFRS for SMEs and adopted accounting policies.
The acquisition price of digital assets acquired by means of the so-called digital assets mining, shall be adjusted to the estimated, i.e. fair value, determined in accordance with the IAS, i.e. IFRS, i.e. IFRS for SMEs and adopted accounting policies, if the change to fair value has been declared in full as income for the period in which it has been executed.
Article 30
A capital gain shall be included in taxable income in the amount set in the way referred to in Articles 27 through 29 of this Act.
Notwithstanding paragraph 1 of this Article, the taxable income shall include 20% of the capital gain generated by entirely transferring proprietary rights, based on:
1) Copyright or related right on a deposited work of authorship, i.e. subject-matter of related right,
2) Right pertaining to an invention, based on the law governing patents.
Capital loss incurred in the sale of one property right may be offset with the taxable amount of the capital gain generated in the sale of another property right in the same year, provided that up to 20% of the capital loss incurred by transfer referred to in paragraph 2 of this Article can be offset with a taxable amount of the capital gain generated by the sale of another proprietary right in the same year.
If a capital loss is declared even after the offsetting referred to in paragraph 3 of this Article, its offset at the charge of future capital gains in the next five years shall be permitted.
Notwithstanding paragraph 2 of this Article, the taxpayer may opt to not include in the tax base the capital gains realized by entering property rights referred to in paragraph 2 of this Article into the capital of a resident legal person, provided that the resident legal person does not alienate thus acquired rights within a period of two years from the date of acquisition, and that in the same period such right is not assigned for use, in whole or in part, at a price lower than the price determined in accordance with the "arm's length" principle if the assignment has been made to an associated person referred to in Article 59 of this Act or to a person whose owner is its associated person referred to in Article 59 of this Act.
The market value of property rights referred to in paragraph 2 of this Article at the occasion of their entry into the capital of a resident legal person shall be determined by appraisal performed by an authorized appraiser.
In the event that the resident legal person referred to in paragraph 5 of this Article, within a period of two years from the date of acquisition, alienates the acquired rights or such rights assigns for use, in whole or in part, in the manner prescribed by paragraph 5 of this Article, the taxpayer shall lose the right to exempt the capital gain from the tax base, and shall, in a tax declaration for the tax period in which acquired rights were alienated or assigned, calculate and pay the tax that he would pay in the manner specified by paragraph 2 of this Article, valorized from the day of filing the tax declaration for the tax period in which he exercised the right to a benefit referred to in paragraph 5 of this Article, to the day of filing the tax declaration for the tax period in which he lost the right to this benefit, by a consumer price index according to the data of the republic’s authority in charge of statistics.
Capital losses incurred on the basis of the entry of property rights in accordance with paragraph 5 of this Article may not be offset with capital gains.
Article 30a
Capital gains generated based on the transfer of real estate to the concession grantor, executed by a private partner in the course of implementation of the concession agreement, shall not enter the tax basis of the private partner in the tax period in which they have been declared, under the condition that the estimated value of the concession amounts to 50 million of Euros at least.
Capital losses incurred based on the transfer of real estate from paragraph 1 of this Article cannot be offset with the capital gains.
Article 30b
Capital gains realized from the sale of digital assets shall not enter the tax base, if the funds earned from that sale were invested in that tax period in the share capital of a resident taxpayer, i.e. in an investment fund established in accordance with regulations governing investment funds, whose center of business i.e. investment activities is located in the territory of the Republic.
Capital losses arising from the sale of digital assets may not be offset with capital gains if the funds earned from the sale have been invested in the manner prescribed by paragraph 1 of this Article.
Article 31
A status change by resident taxpayers executed in conformity with the law governing companies (hereinafter: the status change) shall defer the onset of tax liability based on capital gains.
The tax liability based on capital gains referred to in paragraph 1 of this Article shall run from the moment when a legal person which acquired the property referred to in Article 27 of this Act on the basis of a status change, sells such property.
The capital gain referred to in paragraph 2 of this Article shall be calculated as the difference between the sale price of property and its acquisition price paid by the legal person which transferred such property by a status change to another legal person, adjusted in the way referred to in Article 29 of this Act, from the date of acquisition to the date of sale.
The right to defer payment of corporate income tax for capital gains made in the way referred to in paragraph 1 of this Article shall apply if the owner of a legal person which executed the transfer of property during the status change has received remuneration in the shape of shares or stake in a legal person to which the property was transferred, as well as eventual pecuniary compensation, the amount of which shall not exceed 10% of the nominal value of the obtained shares, i.e. stake.
If the pecuniary compensation referred to in paragraph 4 of this Article exceeds 10% of the nominal value of the obtained shares i.e. stake, the tax liability based on a capital gain shall run from the moment the status change, and the capital gain shall be calculated as the difference between the price at which the property could have been sold on the market and the acquisition price referred to in Article 29 of this Act.
Article 32
Losses determined in the tax balance sheet, except capital gains and losses determined in line with this Act, may be carried over to the account of income determined in the tax balance sheet in the future accounting periods, but not longer than five years.
Article 33
The utilization of the tax benefit in line with Article 32 of this Act shall not cease in the event of status changes or changes of legal form of companies.
In the event of partition or separation, the benefit referred to in Article 32 of this Act shall be divided proportionately and the competent tax office shall be notified thereof.
TAX TREATMENT OF A TAXPAYER'S LIQUIDATION AND BANKRUPTCY
Article 34
Income of a taxpayer during liquidation proceedings, bankruptcy proceedings from the date of issuance of the decision instituting bankruptcy proceedings until the date of application of the reorganization plan or the final decision on the continuation of the bankruptcy proceedings by declaring bankruptcy, as well as during the reorganization procedure, shall be taxable in accordance with this Act.
The taxpayer referred to in paragraph 1 of this Article shall file a tax declaration and the tax balance sheet within 60 days from the date of:
1) Instituting liquidation proceedings, with balance on the day which precedes the date of initiation of liquidation proceedings;
2) Completion, i.e. suspension of liquidation proceedings, with balance on the day of completion, i.e. suspension of liquidation proceedings;
3) Opening of bankruptcy proceedings, with balance on the day which precedes the date of opening of bankruptcy proceedings;
4) Commencement of implementation of the reorganization plan, with balance on the day that precedes the date of commencement of implementation of the reorganization plan.
If the procedure of liquidation, i.e. procedure of bankruptcy i.e. reorganization continue in the following calendar year, the taxpayer from paragraph 1 of this Article shall submit both, the tax declaration and tax balance sheet, with balance on the day of 31 December of the current year, in line with Article 63, paragraphs 3 and 4 of this Act.
The income of a taxpayer, in the period from the date of finality of the decision on continuation of bankruptcy proceedings until the date of finality of the decision on completion of bankruptcy proceedings, i.e. until the finality of the decision on suspension of the bankruptcy proceedings due to the sale of the bankruptcy debtor as a legal person (hereinafter: bankruptcy period), shall be determined as a positive difference between the value of the taxpayer's property at the end and at the beginning of the bankruptcy period, after settlement of creditors. The value of property at the beginning of the bankruptcy period shall mean the value of the property on the day that precedes the date of instituting bankruptcy proceedings, adjusted for changes that occurred until the commencement of the bankruptcy period in line with the regulations governing bankruptcy.
The taxpayer referred to in paragraph 4 of this Article shall file a tax declaration and a tax balance sheet within ten days from the date of:
1) Finality of the decision on continuation of bankruptcy proceedings by declaring bankruptcy, with balance on the day of finality of such decision;
2) Finality of the decision on completion of bankruptcy proceedings by declaring bankruptcy, i.e. the finality of the decision on suspension of the bankruptcy proceedings due to the sale of the bankruptcy debtor as a legal person, on the day of finality of that decision.
Article 35
The liquidation residue, i.e. bankruptcy estate surplus in cash i.e. non-cash property, above the value of invested capital that is distributed to members of the company which was the subject of the completed liquidation proceedings, i.e. completed bankruptcy proceedings, shall be considered a dividend.
The value of non-cash property referred to in paragraph 1 of this Article shall be equal to its market value.
The Minister of Finance shall set in greater detail the manner and procedure for determining the dividend referred to in paragraph 1 of this Article.
Article 35a
The remaining net value of the property of an investment fund that does not have the status of a legal person, which after the dissolution of such investment fund is distributed to members in proportion to their investment units, in cash, i.e. non-monetary property, and which is above the acquisition price of such investment units, shall be deemed a capital gain which is included in the tax base in the amount of 50% of the total capital gain realized.
The value of non-monetary property referred to in paragraph 1 of this Article shall be equal to its market value on the day of passing the decision on dissolution.
Articles 36 and 37
(Deleted)
TAX PERIOD
Article 38
The tax period in which corporate income tax is calculated shall be a financial year.
A financial year shall mean a calendar year, except in case of cessation or beginning of business operations in the course of a year, including status changes also, institution of bankruptcy or liquidation proceedings, as well as in the case of suspension of the bankruptcy proceedings due to the sale of the bankruptcy debtor as a legal person, i.e. suspension of liquidation proceedings, in the course of the year.
At the request of a taxpayer who has obtained a consent of the Minister of Finance i.e. the Governor of the National Bank of Serbia to draw up and present financial statements with the balance on the last day of the financial year which is different from the calendar one, the competent tax office shall render a decision allowing the financial year to be different from the calendar one, on condition that the duration of the tax period is 12 months. The taxpayer concerned shall apply the thus allowed tax period for at least five years.
The taxpayer referred to in paragraph 3 of this Article shall submit a tax declaration and tax balance sheet for the purpose of establishing the final tax liability for the period from 1 January of the current year to the day when, according to the decision of the competent tax office, he begins the financial year that differs from the calendar one, within ten days from the day of expiration of the time limit prescribed for submission of financial statements for the period for which the tax declaration and tax balance sheet are submitted.
If a taxpayer has paid, as advance payment, less tax than he was due to pay according to the liability calculated in the tax declaration, he shall pay the difference until submission of the tax declaration at the latest, while providing proof of payment of such difference of tax.
If a taxpayer has paid in advance more tax than he was due to pay according to the liability calculated in the tax declaration, the surplus paid tax shall be counted as an advance payment for the next period or be refunded to the taxpayer at his request within 30 days from the day of receipt of the refunding request.
Notwithstanding paragraph 2 of this Article, for the taxpayer referred to in Article 34, paragraph 4 of this Act, the tax period shall mean the bankruptcy period.
TAX RATE
Article 39
The corporate income tax rate shall be proportional and uniform.
The corporate income tax rate shall be 15%.
Article 40
Unless otherwise provided by an international treaty on the avoidance of double taxation, the corporate withholding tax shall be charged and paid at the rate of 20% on the income earned by a non-resident legal person from a resident legal person on the basis of the following:
1) Dividends and shares in income of a legal person, including also the dividend referred to in Article 35 of this Act;
2) Fees based on copyright and related rights and industrial property rights (hereinafter: the royalties);
3) Interest;
4) Fees based on the lease and sublease of real estate and movable property in the territory of the Republic of Serbia;
5) Fees from services of market research, accounting and auditing services and other services in the field of legal and business consulting, irrelevant of the location of their provision or use, i.e. the location where such services shall be provided or used.
Revenue realized by a non-resident legal person on the basis of membership in an alternative investment fund that does not have the status of a legal person, shall be considered a dividend in the sense of paragraph 1 of this Article.
The withholding tax referred to in paragraph 1 of this Article shall be charged and paid also on the revenues of a non-resident legal person on the basis of performing a staging show, entertainment, artistic, sporting or similar program in the Republic, which are not taxed as income of a natural person (of a performer. musician, athlete, etc.), in line with the regulations governing the taxation of citizens' income.
Notwithstanding paragraphs 1 and 3 of this Article, the withholding tax at the rate of 25% shall be charged and paid on the income earned by a non-resident legal person from the jurisdiction with preferential tax system based on the royalties, interest, fees based on the leasing and subleasing of real estate and movable property in the territory of the Republic, as well as on fees based on services, regardless of the location of their rendering or using, i.e. location where they will be rendered or used.
The withholding tax referred to in paragraphs 1 and 4 of this Article shall not be paid on the revenues earned by a non-resident legal person, i.e. a non-resident legal person from the jurisdiction with preferential tax system, from interest based on debt securities issued, in line with the law, by the Republic, autonomous province, local self-government unit or the National Bank of Serbia.
A resident legal person, including an alternative investment fund management company not having the capacity of a legal person, shall submit a tax declaration within three days from the date of payment of the revenue referred to in paragraphs 1, 3 and 4 of this Article.
Unless otherwise provided by an international treaty on the avoidance of double taxation, tax shall be charged and paid according to a decision at the rate of 20% on the revenues made by a non-resident legal person from transactions with a resident legal person, another non-resident legal person, non-resident or resident natural person or from transactions with an investment fund, in the territory of the Republic, on the basis of capital gains generated in accordance with the provisions of Articles 27 through 29 of this Act.
Notwithstanding the paragraph 1 of this Article, the revenues referred to in item 4) of the same paragraph generated by a non-resident legal person from transactions with a payer who is not required to calculate, withhold and pay the withholding tax, shall be subject to charging and payment of the tax under the decision referred to in paragraph 7 of this Article.
The tax stated in the decision referred to in paragraph 7 of this Article shall be charged and paid on revenues referred to in paragraph 1, items 2), 3), 4) and 5) of this Article, generated by a non- resident legal person based on settlement of receivables in the enforcement procedure, i.e. in any other procedure for settlement of receivables in line with law.
Within 30 days from the day of generating revenues, a non-resident legal person – receiver of revenues referred to in paragraphs 7, 8 and 9 of this Article, shall file a tax declaration through a tax representative appointed in accordance with the regulations governing tax procedure and tax administration, to a competent tax office, namely in the municipality in whose territory is located the real estate, the seat of a company in which the non-resident legal person owns a stake or securities that are the subject of sale, i.e. seat or domicile of the payer of revenues, i.e. of the tax representative, based on a lease or sublease of movable property, as well as the seat or domicile of the tax representative in case of generating income referred to in paragraph 9 of this Article, based on which the tax office shall render a decision.
The content of the tax declaration referred to in paragraph 10 of this Article shall be set in greater detail by the Minister of Finance.
The withholding tax referred to in paragraphs 1 and 3 of this Article and the tax stated in the decision referred to in paragraphs 7, 8 and 9 of this Article shall not be charged and paid if the revenue referred to in paragraphs 1, 3, 7, 8 and 9 of this Article is being paid to a permanent operating unit of a non-resident taxpayer from Article 4 of this Act.
If a resident legal person is paying out revenues to a permanent operating unit of a non-resident legal person from a jurisdiction with a preferential tax system, it shall charge and pay the withholding tax in accordance with the provisions of paragraph 1, item 1) and paragraph 4 of this Article.
In the case of application of paragraph 13 of this Article, the revenues to which the provisions of paragraph 1, item 1) and paragraph 4 of this Article apply, as well as the expenditures associated with them, shall not be taken into account for the purpose of determining the tax base for a permanent operating units of a non-resident legal person from a jurisdiction with a preferential tax system.
A resident legal person which redeems recyclable materials and waste from a resident, i.e. non-resident legal person, shall, at the moment of payment of the reimbursement amount to those persons, withhold and pay to the prescribed account the withholding tax at the rate of 1% of the reimbursement amount, as well as file a tax declaration with the competent tax office within the time limit prescribed by this Act.
The reimbursement amount referred to in paragraph 15 of this Article shall not include the value added tax.
Types of services from paragraph 1, item 5) of this Article shall be set in greater detail by the Minister of Finance.
The content of the tax declaration referred to in paragraphs 6 and 15 of this Article shall be set in greater detail by the Minister of Finance.
Article 40a
When calculating the withholding tax on the revenues of a non-resident, the payer of revenues shall apply the provisions of the treaty on the avoidance of double taxation, on condition that the non-resident proves its status of a resident of the state with which the Republic has concluded a treaty on the avoidance of double taxation and that the non-resident is the actual owner of the revenues.
The status of a resident of a state with which a treaty on the avoidance of double taxation in terms of paragraph 1 of this Article has been concluded, the non-resident shall prove by presenting a certificate of residency in keeping with the law that governs the tax procedure and tax administration.
If the payer of revenues applies the provisions of the treaty on the avoidance of double taxation and the requirements referred to in paragraphs 1 and 2 of this Article have not been satisfied, in consequence of which the tax is underpaid, he shall pay the difference between the tax paid and the tax owed under this Act.
At the request of a non-resident, the competent tax office shall issue a certificate of the payment of tax in the Republic.
The provisions of the treaty on avoidance of double taxation shall apply to a non-resident legal person - receiver of the revenues referred to in Article 40, paragraphs 7, 8, 9 and 15 of this Act, in keeping with the provisions of paragraphs 1 through 3 of this Article.
If at the moment of payment of revenues to a non-resident the payer of revenues does not have the certificate referred to in paragraph 2 of this Article, he shall apply the provisions of this Act when paying the revenues.
If a non-resident legal person presents to the competent tax office the certificate referred to in paragraph 2 of this Article, the difference between the paid amount of the tax referred to in paragraph 6 of this Article and the amount of tax for which an obligation of payment would exist if the taxpayer had the certificate referred to in paragraph 2 of this Article at the moment of payment of revenues, shall be regarded as tax paid in excess.
TAX INCENTIVES
Article 41
Taxpayers shall be granted tax incentives for the purpose of achieving economic policy aims relating to the fostering of economic growth.
This Act only shall determine the tax incentives relating to corporate income tax.
Articles 42 and 43
(Deleted)
Article 44
A non-profit organization shall be exempted from corporate income tax payment for the tax period in which the realized surplus of revenues over expenditures did not exceed RSD 400,000, provided that:
1) It does not distribute the generated surplus to its founders, members, executives, employees or persons associated with them;
2) The annual amount of salaries paid by it to its employees, executives and persons associated with them is not higher than twice the amount of the average annual salary per employee in the Republic in the year for which the right to tax exemption is being determined, as per the data of the competent republic’s authority in charge of statistics;
3) It does not distribute assets in favor of its founders, members, executives, employees or persons associated with them.
4) It does not enjoy a monopolistic or dominate position on the market in terms of the law governing the protection of competition.
The associated persons referred to in paragraph 1, items 1) to 3) of this Article shall mean the persons referred to in Article 59 of this Act.
The non-profit organization shall keep records of revenues and expenditures, as well as file a tax balance sheet and a tax declaration.
Article 45
(Deleted)
Article 46
An enterprise engaged in vocational training, professional rehabilitation and employment of disabled persons shall be exempt from payment of corporate income tax, in proportion to the share of such persons in the total number of employees.
Articles 46a-50
(Deleted)
Article 50a
A taxpayer who invests more than a billion dinars in its fixed assets i.e. such amount is invested in its fixed assets by another person, and if that taxpayer uses such assets in the conduct of its main line of business and lines of business entered in its memorandum of association, i.e. in some other taxpayer’s document identifying the lines of business conducted by the taxpayer and additionally employs during the investment period at least 100 persons for an indefinite period of time, shall be exempt from payment of corporate income tax for a period of ten years, in proportion to that investment.
The investing in fixed assets by another person pursuant to paragraph 1 of this Article shall also mean investing in fixed assets and increasing the capital in keeping with law.
In a case referred to in paragraph 2 of this Article, fixed assets shall be evaluated according to market (fair) value.
Following the fulfilment of the requirements referred to in paragraph 1 of this Article, the tax exemption shall apply from the first year in which income is made.
The newly employed persons, in terms of paragraph 1 of this Article, shall mean the persons that the taxpayer employed during the investment period, so that in the moment of fulfilment of the conditions for use of such tax exemption the taxpayer has at least 100 additional employees for an indefinite period of time compared to the number of employed for an indefinite period of time on the last day of the period preceding the period in which the investment from paragraph 1 of this Article was initiated.
In terms of paragraph 1 of this Article, the newly employed persons shall not be understood to mean the persons who, starting from the last day of the tax period preceding the investment period, have been employed indirectly or directly by an associated person in terms of Article 59 of this Act, as well as the persons who are not directly engaged in work at the taxpayer.
Article 50b
(Deleted)
Article 50c
If a taxpayer, during the utilization of the tax exemption referred to in Article 50a of this Act, reduces the number of employees employed for an indefinite period of time to a number which is lower than total number of employees employed for an indefinite period of time it had in the tax period in which it met the requirements for the tax exemption, so that the average total number of employees employed for an indefinite period of time, determined on the last date of the period for which the tax declaration is submitted, is lower than the total number of employees employed for an indefinite period of time it had in the tax period in which it met the requirements for the tax exemption, it shall forfeit the right to tax exemption for the whole period in which he enjoyed the tax exemption and it shall declare in the tax declaration for the tax period in which it decreased the number of employees, as well as pay the tax it would have paid had it not utilized this incentive, valorized from the date of submission of the tax declaration for the tax period in which it had acquired the right to tax exemption, to the date of submission of the tax declaration for the tax period in which it decreased the number of employees, with the retail price index according to data of the republic’s authority in charge of statistics.
Average number of employees referred to in paragraph 1 of this Article shall be determined by the taxpayer by adding the number of employees at the end of each month of the tax period and dividing such sum by the number of months in the tax period.
Article 50d
If before expiration of the period of exemption from tax, a taxpayer referred to in Article 50a of this Act goes out of business, stops using or transfers the assets referred to in Article 50a, paragraph 1 of this Act, and does not invest in new fixed assets during the same tax period a sum that is equal to the market price of alienated assets, at the minimum in the value which secures that the total amount of investments does not fall below the amounts laid down in Article 50a of this Act, it shall forfeit the right to tax exemption and shall, in the tax declaration for the tax period in which it alienated the fixed assets, declare and pay the tax it would have paid had it not utilized this incentive, valorized from the date of submission of the tax declaration for the tax period in which it had acquired the right to tax exemption, to the date of submission of the tax declaration for the tax period in which it alienated the fixed assets, with the retail price index according to the data of the republic’s authority in charge of statistics.
Articles 50e and 50f
(Deleted)
Article 50g
The proportion referred to in Article 50a of this Act shall be determined in the way which shall be regulated in greater detail by the Minister of Finance.
The proportion of investments referred to in paragraph 1 of this Article shall be determined for each tax period for the duration of tax exemption.
Article 50h
The Minister of Finance shall regulate in greater detail the manner of keeping of accounting records on the business operations of beneficiaries of tax incentives referred to in Article 50a of this Act.
Article 50i
Competent organizational unit of the Tax Administration shall determine fulfillment of the requirements for usage of tax incentives referred to in Article 50a of this Act.
Article 50j
The right to a tax incentive for investments referred to in Article 50a of this Act shall not be possible for procurement of equipment already used in the Republic.
The tax incentive referred to in paragraph 1 of this Article cannot be transferred to another legal person, which has not acquired the right to use such incentive in terms of this Act, not even in the case of other legal person participating in a status change with the taxpayer who uses the tax incentive referred to above.
The right to a tax incentive referred to in paragraph 1 of this Article shall not be realized for the following fixed assets: aircrafts and watercrafts that are not used for business activity; passenger cars, except cars for taxi transportation, rent-a-car, driver training and special passenger cars with incorporated devices for patients; furniture, except furniture for furnishing of hotels, motels, restaurants, youth, children's and workers' resorts; carpets; works of fine and applied art and decorative items for interior decorating; mobile phones; air conditioners; video surveillance equipment; advertising equipment, as well as tools and inventory for calculated write-off.
Article 50k
A taxpayer which cannot be considered as newly established company that carries out an innovative business activity, but which executes an investment into the capital of a newly established company that carries out an innovative business activity, shall be recognized a right to a tax credit in the amount of 30% of the investment made.
The right to the tax credit referred to in paragraph 1 of this Article shall belong to a taxpayer which, prior to the investment, either independently or jointly with all associated persons from Article 59 of this Act, held no more than 25% of shares or stakes, i.e. votes in the management bodies of the newly established company that carries out the innovative business activity, into whose capital the investment is made.
The right to the tax credit from paragraph 1 of this Article may be exercised solely based on the fully paid in pecuniary contributions that increase the capital of the newly established company which carries out an innovative business activity.
A taxpayer shall exercise the right to the tax credit from paragraph 1 of this Article under the condition that it has not decreased its investment, within a continuous period of three years from the date of investment.
A taxpayer may use the tax credit from paragraph 1 of this Article during the first subsequent tax period which follows the period in which the condition from paragraph 4 of this Article has been fulfilled.
The unused part of the tax credit may be transferred to the account of the corporate income tax in the future accounting periods, but not longer than five years.
The highest amount of the tax credit from paragraph 1 of this Article that may be recognized to an individual taxpayer based on investment into capital of a newly established company which carries out an innovative business activity, shall amount to 100,000,000 RSD.
The highest amount of the tax credit from paragraph 1 of this Article, regardless of the number of investments based on which the right to a tax credit from paragraph 1 of this Article is exercised, which may be used to the account of the corporate income tax in one tax year, shall amount to 50,000,000 RSD.
Notwithstanding paragraph 7 of this Article, the highest amount of the tax credit from paragraph 1 of this Article for a taxpayer which has associated persons in terms of Article 59 of this Act, shall be the positive difference between the highest amount of the tax credit from paragraph 7 of this Article and the tax credit from paragraph 1 of this Article based on the investment made into the same newly established company which carries out an innovative business activity, to which its associated persons are entitled to, up to the amount from paragraph 7 of this Article.
A newly established company that carries out an innovative business activity, in terms of this Article, shall be understood to mean a company from whose incorporation no more than three years have passed, and which predominantly performs an innovative activity in terms of a law that governs the innovative activity (activities undertaken for the purpose of creation of new products, technologies, processes and services or significant modifications thereof, in line with the needs of the market) and which meet the following conditions:
1) The annual revenue, according to the latest financial statements available at the time of investments from paragraph 3 of this Article, does not exceed 500,000,000 RSD;
2) No dividends, i.e. no shares in income, have been distributed from incorporation, nor shall they be distributed in the period of three years from the date the investment from paragraph 3 of this Article was made;
3) The centre of the business activities is located in the territory of the Republic;
4) It was not incorporated due to a status change in line with the law governing companies;
5) In each tax period, starting from the first subsequent period from the period in which it was incorporated and final with the fulfilment of the conditions from paragraph 3 of this Article:
- The research and development costs comprise less than 15% of the total expenditures, or
- The highly-qualified employees comprise more than 80% of all of the employees, or
- It is the owner, i.e. the user of the deposited work of authorship or patent which is directly in relation to the innovative activity that it performs.
The minister of finance shall in greater detail define the conditions and the manner of exercising the rights to the tax credit from paragraph 1 of this Article.
Article 50l
A taxpayer - bank shall be recognized a right to a tax credit in the amount of 2% of the remaining debt determined in accordance with Article 4, paragraph 2 of the Law on the Conversion of Housing Loans Indexed to Swiss Francs ("Official Herald of the RS", No. 31/19).
The tax credit referred to in paragraph 1 of this Article shall be used by the taxpayer in two consecutive tax periods, namely in the amount of 50% of the tax credit thus calculated.
In case the taxpayer cannot use the tax credit in the manner prescribed by paragraph 2 of this Article, the unused amount of the tax credit may be transferred to the account of the corporate income tax in future accounting periods, but not longer than ten years.
The Minister of Finance shall in greater detail define the manner of exercising the right to the tax credit referred to in paragraph 1 of this Article.
ELIMINATION OF DOUBLE TAXATION OF THE INCOME EARNED IN ANOTHER STATE
Income of a Resident Taxpayer's
Permanent Operating Unit
Article 51
If a resident taxpayer makes income by doing business through a permanent operating unit in another state and tax was paid on that income in that state, such taxpayer shall be granted a tax credit on the account of the corporate income tax determined in conformity with the provisions of this Act, amounting to the corporate income tax paid in that other state.
The tax credit referred to in paragraph 1 of this Article may not be higher than the amount that would be charged by applying the provisions of this Act to the income earned abroad.
Article 52
A parent legal person - resident taxpayer in the Republic may decrease the charged corporate income tax by the amount of tax paid by its non-resident affiliate in another state on the income from which dividends have been paid out, that are included into the revenue of the parent legal person, as well as by the amount of the withholding tax the non-resident affiliate has paid in another state for the dividends paid out.
The income from dividends coming from a non-resident affiliate shall be included in the revenues of the resident legal person in the amount augmented by the paid corporate income tax and the withholding tax paid on the dividends referred to in paragraph 1 of this Article.
The duty referred to in paragraph 2 of this Article shall exist only in a case of application of the tax credit referred to in paragraph 1 of this Article.
The tax credit referred to in paragraph 1 of this Article may be used for reduction of the parent legal person’s calculated tax in the amount of the tax paid in another state, but not exceeding the amount of tax that would be, at the rate provided by Article 39, paragraph 2, of this Act, charged for the revenues from dividends from the non-resident affiliate in the amount increased by the tax its non-resident affiliate had paid in the other state on the income from which dividends have been paid out.
The non-utilized portion of the tax credit referred to in paragraph 4 of this Article may be carried over to the tax of the parent legal person in the future accounting periods, but not longer than five years.
In terms of this Act, a parent legal person shall be understood to mean a legal person that owns shares or stakes in other legal persons under conditions determined by this Act.
In terms of this Act, an affiliate shall be understood to mean a legal person in whose capital a parent legal person participates under conditions determined by this Act.
Article 53
A parent legal person that has possessed 10% or more shares i.e. stakes in a non-resident affiliate in a continuous period of at least the a year which precedes the submission of the balance sheet shall have the right to a tax credit referred to in Article 52 of this Act.
The taxpayer referred to in paragraph 1 of this Article shall present to the competent tax office appropriate evidence of the size of its participation in the capital of its non-resident affiliate, duration of the participation and tax paid by the affiliate in another state, together with its profit-and-loss statement and tax balance sheet.
The provisions of paragraphs 1 and 2 of this Article shall apply mutatis mutandis also in a case where a parent legal person exercises indirect control over the non-resident affiliate through possession of 10% or more shares i.e. stake in another non-resident affiliate.
Article 53a
A resident taxpayer who earns revenues from another state from interest, royalties, renting of real estate and movable property, dividends which do not meet the requirements for application of the provisions of Article 52 of this Act, as well as services, on which revenues the withholding tax has been paid in that other state, may reduce the calculated corporate income tax in the Republic by the amount of the withholding tax paid in that other state.
If a resident taxpayer exercises the right to a tax credit referred to in paragraph 1 of this Article, the revenues from interest, royalties, renting of real estate and movable property, dividends which do not meet the requirements for application of the provisions of Article 52 of this Act, as well as services, earned in another state, and on the basis of which such taxpayer uses the right to a tax credit referred to in paragraph 1 of this Article, shall be included in the revenues of the resident legal person in the amount increased by the paid withholding tax on interest, royalties, renting of real estate and movable property, dividends which do not meet the requirements for the application of provisions of Article 52 of this Act, as well as services.
The tax credit referred to in paragraph 1 of this Article may be used for reduction of the calculated tax of a resident legal person by the amount of tax paid in another state, but not more than by the amount that would be obtained by applying the tax rate referred to in Article 39, paragraph 2 of this Act to the base corresponding to the amount of 40% of the earned revenues from paragraph 1 of this Article on which the withholding tax has been paid in another state and which, according to paragraph 2 of this Article, is included in the resident taxpayer’s revenues.
In case the taxpayer exercises the right from Article 25b of this Act, the provisions of this Article shall be applied mutatis mutandis only in relation to the revenues from authorship fees included in the tax base, i.e. only in relation to that part of the paid withholding tax in another state which is proportionate to the revenues included in the tax base.
Article 53b
A resident taxpayer which makes a capital gain in another state from sale of property from Article 27, paragraph 1 of this Act, to which gain tax was paid in that other state, may reduce the calculated corporate income tax in the Republic by the amount of the tax paid in that other state.
The tax credit from paragraph 1 of this Article may not exceed the amount of the tax which would, at the rate set forth by the provision of Article 39, paragraph 2 of this Act, be charged for the capital gain determined in line with the provisions of this Act.
The tax credit from paragraph 1 of this Article shall not be recognized based on the tax paid in another state if, under an international treaty on avoidance of double taxation, the right to tax the capital gain belongs exclusively to the Republic.
Article 54
The Minister of Finance shall regulate in greater detail the manner of exercising the right to the tax credit referred to in Articles 52, 53, 53а and 53b of this Act.
The Minister of Finance shall regulate in greater detail the procedure for exercising the rights to eliminate double taxation as provided by the international treaties on the avoidance of double taxation.
GROUP TAXATION AND TRANSFER PRICES
Article 55
In terms of this Act, a parent legal person and subsidiary legal persons make up a group of associated legal persons, if direct or indirect control over at least 75% of shares or stakes exists among them.
Associated legal persons shall have the right to apply for tax consolidation on condition that all of the associated legal persons are residents of the Republic.
A parent legal person shall file an application for tax consolidation with the competent tax office at the earliest by expiration of the tax period in which the requirements referred to in paragraphs 1 and 2 of this Article are met, from the beginning to the end of that tax period.
If the requirements referred to in paragraphs 1 through 3 of this Article have been met, the competent tax office shall, within 30 days from date of filing date of the request, issue a decision approving the tax consolidation, starting from the tax period in which the requirements referred to in paragraphs 1-3 of this Article were met.
Article 56
Each member of a group of associated legal persons shall file its own tax declaration and tax balance sheet, while the parent legal person shall also file a consolidated tax balance sheet for the group of associated legal persons.
The tax period losses of one or several associated legal persons shall be offset with the income of other associated legal entities in the group the consolidated tax balance sheet, in that tax period.
The taxable income made by a member of a group of associated legal persons, which is declared in the consolidated fiscal balance sheet, shall not be reduced by the amount of losses in that member’s tax balance sheets of the previous years, i.e. previous tax periods.
Individual associated legal persons from a group shall be due to pay the tax calculated in the consolidated tax balance sheet, in proportion to the taxable income declared in individual tax balance sheets.
The Minister of Finance shall regulate in greater detail the manner of avoiding double exemption or double taxation of individual items in the consolidated tax balance sheet.
Article 57
Once approved, a tax consolidation shall be applied for at least five years, i.e. tax periods.
If prior to the expiration of the time limit referred to in paragraph 1 of this Article, the conditions referred to in Article 55, paragraphs 1 and 2 of this Act change or if one legal person, several associated legal persons or all associated legal persons in a group subsequently opt for individual taxation prior to the expiration of the time limit referred to in paragraph 1 of this Article, all associated legal persons shall, in the tax declaration which is submitted for the tax period in which the conditions for tax consolidation have ceased to exist, determine and proportionally pay the difference at the account of the tax benefit they had used.
Article 58
(Deleted)
Article 59
A transfer price shall be understood to mean a price that comes into being in connection with transactions involving assets or making commitments among associated persons.
A person associated with a taxpayer shall be understood to mean a natural or legal person in whose relations with the taxpayer, there is a possibility of exercising control over or exerting considerable influence on business decisions.
In the case of indirect or direct possession of at least 25% of shares or stakes, the possibility of exercising control over the taxpayer shall be deemed existent.
In addition to the case referred to in paragraph 3 of this Article, the possibility of exerting a considerable influence on business decisions shall also be deemed existent when the person possesses, indirectly or directly, at least 25% of votes in the taxpayer’s managing bodies.
A person associated with a taxpayer shall also be understood to mean a legal person in which, like in the taxpayer, the same natural or legal persons directly or indirectly participate in management, supervision or capital, in the way prescribed by paragraphs 3 and 4 of this Article.
Persons associated with a taxpayer shall be understood to mean a spouse or extramarital partner, descendants, adoptees and their descendants, parents, adopters, brothers and sisters and their descendants, grandfathers and grandmothers and their descendants, as well as brothers and sisters and parents of the spouse or extramarital partner, of a person associated with the taxpayer in the way prescribed by paragraphs 3 and 4 of this Article.
Notwithstanding the provisions of paragraphs 2 through 6 of this Article, a person associated with a taxpayer shall also mean every non-resident legal person from a jurisdiction with a preferential tax system.
Article 60
A taxpayer shall separately declare in its tax balance sheet the transactions referred to in Article 59, paragraph 1, of this Act.
A taxpayer shall separately declare in its tax balance sheet, in terms of paragraph 1 of this Article, the interest stemming from deposit, as well as interest stemming from loan i.e. credit, up to the level prescribed by the provisions of Article 62 of this Act.
A taxpayer shall attach to the tax balance sheet the documentation within which and in the manner prescribed by the Minister of Finance, together with the transactions referred to in Article 59, paragraph 1 of this Act and paragraphs 1 and 2 of this Article, it shall separately declare the value of such transactions at the prices which could have been gotten on the market for such or similar transactions, if associated persons were not involved (the "arm's length" principle).
Notwithstanding paragraph 3 of this Article, in case the transaction with associated person is one-time-only and that its value does not exceed the value of trade for which the law governing the value added tax prescribes the obligation of applying for value added tax, i.e. in case the aggregate value of the transactions with one associated person during the tax period does not exceed the value of trade for which the law governing the value added tax prescribes the obligation of applying for value added tax, the taxpayer shall, accompanying the tax balance sheet, submit documentation in the form of an abbreviated report, where it shall not be obligated to separately present the value of the same transactions established according to "arm's length" principle.
Interest from loans i.e. credits, provided or received advance payments, as well as the value added tax shall not be included in the value of the transaction, i.e. aggregate value of transactions from paragraph 4 of this Article.
Notwithstanding paragraphs 3 and 4 of this Article, based on the sale of property from Article 27 of this Act to an associated person, the taxpayer shall not be obligated to establish the price of that property according to the "arm's length" principle, i.e. it shall not be obligated to submit the documentation from paragraphs 3 and 4 of this Article.
In terms of paragraph 3 of this Article, for the purpose of presenting the value of a transaction with an associated person at the transfer price and its price established in accordance with the "arm's length" principle, it shall be permissible, when so is in keeping with the case circumstances, to apply the unified approach for a larger number of individual transactions, i.e. the explicated approach in the case of complex transactions, where one transaction comprises a larger number of individual transactions.
In case that the taxpayer’s transfer price based on a transaction with an individual associated person differs from the price of that transaction established by applying the "arm's length" principle, such taxpayer shall include the following in the tax base:
1) Amount of the positive difference between the revenues based on a transaction made at a price established by applying the "arm's length" principle and the revenues based on that transaction at the transfer price, or
2) Amount of the positive difference between the expenditures based on that transaction at the transfer price and expenditures based on that transaction at the price fixed by applying the "arm's length" principle.
In a case in which the range of price is determined when establishing the price of a transaction in accordance with the "arm's length" principle, it shall be taken that the transfer price of that transaction does not differ from its price according to the "arm's length" principle, if the value of the transfer price is within that range.
In a case where the range of the price is determined when establishing the price in accordance with the "arm's length" principle, but the value of the transaction transfer price is outside that range, the price according to the "arm's length" principle for the purposes of application of paragraph 8 of this Article shall be equal to the median value of the determined range.
The Minister of Finance may prescribe the cases in which it is permissible to reduce the amount which is, in keeping with paragraph 8 of this Article, included in the tax base on the basis of a transaction between a taxpayer and a certain associated person, provided that such reduction may not lead to reduction of the taxpayer’s tax base below the amount that would have been established on the basis of its transfer price.
A taxpayer may reduce the tax base on the basis of transactions with associated persons only in the case of application of the corresponding provisions of international treaties on the avoidance of double taxation.
The provisions of paragraphs 1 through 12 of this Article shall also apply to transactions between a permanent operating unit from Article 4 of this Act and its non-resident head office.
Article 61
The following methods shall be applied in determining the transaction price in accordance with the "arm's length" principle:
1) Comparative market price method;
2) Method of cost price augmented by usual income (cost plus gross margin method);
3) Resale price method;
4) Transaction net margin method;
5) Income sharing method;
6) Any other method which makes it possible to determine the transaction price in accordance with the "arm's length" principle, provided that it is not possible to apply the methods so far referred to in this paragraph or if that other method is more appropriate to the case circumstances than the methods referred to in this paragraph.
The method best suited to the case circumstances shall be applied in determining the transaction price in accordance with the "arm's length" principle, while it shall also be permissible to apply a combination of several methods where necessary.
For the purpose of determining the amount of interest to be charged on loans i.e. credits between associated persons in accordance with the "arm's length" principle, the Minister of Finance may prescribe the amounts of interest rates which are to be regarded as being in line with the "arm's length" principle.
Instead of applying the amount of interest rate referred to in paragraph 3 of this Article for the purpose of determining the interest rate which would be charged on a loan i.e. a credit with associated persons in accordance with the "arm's length" principle, a taxpayer shall be entitled to apply the general rules of determining the transaction price in accordance with the "arm's length" principle from Articles 60 and 61, paragraphs 1 and 2 of this Act.
A taxpayer who decides to exercise the right referred to in paragraph 4 of this Article shall apply the general rules of determining the transaction price in accordance with the "arm's length" principle as referred to in Articles 60 and 61, paragraphs 1 and 2 of this Act to all loans i.e. credits with associated persons.
Should a taxpayer decide to exercise the right referred to in paragraph 4 of this Article, the Tax Administration shall not be tied to the amounts of interest rates referred to in paragraph 3 of this Article for the purpose of determining the amount interest which would be charged for loans i.e. credits between that tax payer and its associated persons in accordance with the "arm's length" principle.
Article 61a
The Minister of Finance shall regulate in greater detail with application of the provisions of Article 10a and Articles 59 through 61 of this Act, with reliance on the sources related to the taxation of transactions between associated persons of the Organization for Economic Cooperation and Development (OECD), as well as other international organizations.
Article 61b
The Republic, autonomous province, i.e. a local self-government unit shall not be considered legal persons for the purposes of application of Articles 59 through 61a of this Act.
Article 61c
A resident taxpayer considered as an ultimate parent legal person of an international group of associated legal persons, in terms of the provisions of this Article, shall submit to a competent tax office an annual report on the controlled transactions of the international group of associated legal persons (hereinafter: an annual report), in the manner prescribed by the Minister of Finance.
In terms of paragraph 1 of this Article, the international group of associated legal persons (hereinafter: the international group) shall mean a group of entities which are interconnected on the basis of ownership or control in terms of the IAS, i.e. IFRS, and whose overall consolidated revenue, expressed in consolidated financial reports for the period which precedes the period for which a reporting obligation exists in terms of this Article, is at least EUR 750 million in RSD equivalent at mid-exchange rate of the National Bank of Serbia on the date of adoption of consolidated financial reports, and:
1) Whose one or more members has the obligation to compose, present, submit and disclose consolidated financial reports in accordance with the IAS, i.e. IFRS, or would have such an obligation if it were a legal person whose shares were traded on a regulated market in the Republic or outside the Republic, and
2) In which at least one legal person is a resident of another tax jurisdiction in relation to other members of the international group, or at least one legal person is a resident of one tax jurisdiction, and is subject to taxation in another tax jurisdiction on the basis of its business operations carried out through its permanent operating unit.
In terms of paragraph 1 of this Article, a legal person, member of the international group, shall be considered an ultimate parent legal person of an international group (hereinafter: the ultimate parent legal person) provided that:
1) It, directly or indirectly, has ownership or control over one or more legal persons, members of the international group, which results in the obligation to prepare, compose, present, submit and disclose consolidated financial reports in accordance with the requirements of the IAS, i.e. IFRS, i.e. which would have such an obligation if it were a legal person whose shares are traded on the regulated market in the Republic or outside the Republic, and
2) There is no other legal person within the international group which has direct or indirect ownership or control over such person, and which has an obligation referred to in item 1) of this paragraph.
The annual report shall be submitted for the financial year of the ultimate parent legal person, for which such person has an obligation to prepare a financial report.
Notwithstanding paragraph 4 of this Article, in case that the financial year of one or more members of the international group differs from the financial year of the ultimate parent legal person, the ultimate parent legal person shall, for all such members of the international group and in the same manner, enter the following in the annual report:
1) Data for the financial year of that member which ended in the 12-month period before the last day of the period for which the annual report is submitted, or
2) Data for the period corresponding to the period referred to in paragraph 4 of this Article.
A resident taxpayer, the ultimate parent legal person, shall submit the annual report to the competent tax office at the latest within a time limit of 12 months from the expiry of the financial year for which the annual report is submitted.
For the purpose of this Article, the tax jurisdiction shall be understood to mean any territory that applies separate tax legislation that is independent of the regulations of some other territory, irrespective of whether it is considered a separate state or part of the territory of another state.
Relying on the sources related to good practice regarding the reporting on controlled transactions of the Organization for Economic Cooperation and Development, the Minister of Finance shall regulate in greater detail the conditions and the manner of submitting the annual report.
"Arm's Length" Interest and Prevention of Thin Capitalization
Article 62
In the case of a debt to a creditor which has a status of an associated person referred to in Article 59 of this Act, a taxpayer, other than a bank and a company that performs the activity of financial leasing in accordance with the regulations governing the financial leasing (hereinafter: the provider of financial leasing), shall have a benefit to have recognized as expenditure in the tax balance sheet the amount of interest and costs stemming from loan, i.e. credit up to the amount of four times the value of the taxpayer’s own capital.
In the case of banks and providers of financial leasing, the limit referred to in paragraph 1 of this Article shall be the tenfold amount of taxpayer’s own capital.
In terms of this Act, the own capital shall be equal to the difference between the assets on the basis of which the taxpayer is earning revenue and the debts associated with them, where the assets and debts are averaged with the balance on the date of 1 January and 31 December of the current year.
The Minister of Finance shall regulate in greater detail with the way of preventing the thin capitalization.
DETERMINATION AND COLLECTION OF COPRORATE INCOME TAX
Article 63
A taxpayer shall file with the competent tax office a tax declaration in which the tax is calculated for the period for which the tax is determined.
With the tax declaration, the taxpayer shall file a tax balance sheet for the period referred to in paragraph 1 of this Article.
The tax declaration shall be filed within 180 days from the date of expiry of the period for which the tax is determined.
In addition the tax declaration referred to in paragraph 3 of this Article, the taxpayer referred to in Article 34, paragraph 1 of this Act shall also file a tax declaration within the time limit prescribed by paragraph 2 of that Article of this Act.
The taxpayer referred to in Article 34, paragraph 4 of this Act shall file exclusively the tax declarations within the time limits prescribed by paragraph 5 of that Article of this Act.
Notwithstanding paragraph 3 of this Article, in the event of a status change resulting in dissolution of a company, the tax declaration shall be filed within 60 days from the date of the status change.
If a taxpayer fails to include a tax balance sheet with the tax declaration, the tax declaration shall not be considered filed.
The provisions of paragraphs 1 through 3 of this Article shall apply mutatis mutandis to a non-resident taxpayer referred to in Article 5 of this Act.
The Minister of Finance shall prescribe in greater detail the contents of the tax declaration and the tax balance sheet filed by the taxpayer referred to in Article 1, paragraphs 1 through 3 and Article 5 of this Act.
Article 64
A taxpayer who starts up a business in the course of a year shall file a tax declaration within 15 days from the date of entry into the register of a competent authority.
A taxpayer shall include in the tax declaration referred to in paragraph 1 of this Article an estimate of revenues, expenditures and income for the tax period which begins, in case of a taxpayer registered up to the 15th day of the month, as of the month in which it was registered, while in the case of a taxpayer registered from the 16th day to the end of the month, as of the first day of the next month. The taxpayer shall also calculate in the tax declaration the monthly amount of advance payment for corporate income tax.
A taxpayer - bankruptcy debtor, whose bankruptcy proceedings were terminated during a year due to the sale of the bankruptcy debtor as a legal person, shall submit a tax declaration within 15 days from the date of finality of the decision on bankruptcy proceedings termination.
In the tax declaration from paragraph 3 of this Article the taxpayer shall provide the evaluation of revenues, expenditures and income for the tax period which starts on the following day in relation to the date of finality of the decision on bankruptcy procedure termination. In the tax declaration the taxpayer shall also calculate the monthly amount of advance payment of the corporate income tax.
The provisions of paragraphs 3 and 4 of this Article shall be applied mutatis mutandis also in the case of liquidation proceedings termination in the course of a year.
Article 65
(Deleted)
Calculation and Payment of Tax
Article 66
In a tax declaration, a taxpayer shall calculate the corporate income tax for the tax period for which the declaration is being filed.
If a taxpayer has paid in advance less tax than it was bound to pay according to the obligation calculated in the tax declaration, it shall pay the difference at the latest until filing of the tax declaration.
If a taxpayer has paid in advance more tax than it was bound to pay according to the obligation calculated in the tax declaration, the excessive amount paid in shall be regarded as an advance payment for the following tax period or it shall be reimbursed to the taxpayer at his request.
Article 67
A taxpayer, other than a non-profit organization and the taxpayer referred to in Article 34 of this Act, with the exception of the taxpayer in the process of reorganization, shall pay the corporate income tax in the course of a year in monthly advance payments, the amount of which shall be determined on the basis of taxable income which does not include capital gains and losses, and which is declared in the tax declaration for the previous year i.e. previous tax period, and in which the data of importance for setting the amount of advance payment in the current year are also declared.
The monthly advance payment of the corporate income tax shall be paid by the 15th day of the current month for the previous month.
The payment of monthly advance payments in accordance with the tax declaration referred to in paragraph 1 of this Article shall be effected for the month in which the declaration was filed, starting from the first day of the following month in relation to the month in which the declaration was filed.
Pending the payment of the monthly advance payment pursuant to paragraph 3 of this Article, the taxpayer shall pay in the current year a monthly advance payment in the amount corresponding to the monthly advance payment from the last month of the previous tax period, and with the beginning of payment of the monthly advance pursuant to paragraph 3 of this Article, the amount of such advance payments shall be adjusted up or down, so that the total advance payments made from the beginning of the current year i.e. the beginning of the tax period are brought to an amount which would be obtained if advance payments were made in accordance with the tax declaration referred to in paragraph 3 of this Article.
The taxpayer shall calculate and pay interest on the amount of monthly advance payments which were not paid within the time limit set by paragraph 2 of this Article, in conformity with the law governing the taxation procedure and taxation administration.
Article 68
If in the course of current year significant changes occur in a taxpayer’s business operations, changes to tax instruments or other circumstances which substantially affect the amount of monthly advance payment, the taxpayer may, upon submitting the tax declaration referred to in Article 63, paragraph 1 of this Act, file the tax declaration together with the tax balance sheet, in which he shall show the data of importance for the change of the monthly advance payment and calculate its amount, at the latest within 30 days from the expiration of the period for which the tax balance sheet is drawn up.
The taxpayer may start paying the advance payment in accordance with the tax declaration referred to in paragraph 1 of this Article for the month in which the declaration was filed, namely starting from the first day of the next month in relation to the month in which the declaration was filed.
Article 68a
A taxpayer that is not required to pay the corporate income tax in the shape of monthly advance payments in accordance with this Act shall pay the corporate income tax for a tax period within the time limit specified for the filing of the tax declaration and the tax balance sheet for that period.
Article 69
If a taxpayer fails to file the tax declaration or if it is found in the tax control procedure that the tax declaration is incomplete, that it contains false data or that it is deficient and irregular in some other way of importance for the determination of tax liability, the Tax Administration shall determine the tax liability for the tax period i.e. the monthly advance payment for the current year, in conformity with the law governing the taxation procedure and taxation administration.
Article 70
(Deleted)
Article 70a
The competent tax office shall render a decision on a submitted tax declaration referred to in Article 40, paragraph 10 of this Act within 15 days from the date of receipt of the declaration.
The tax levied by decision of the competent tax office referred to in paragraph 1 of this Article, shall be paid by the taxpayer within 15 days from serving of the decision.
Article 71
The withholding tax for the revenues referred to in Article 40, paragraphs 1, 3, 4 and 15 of this Act for each taxpayer, and for each individual earned i.e. paid out revenue, shall be calculated, withheld and paid by the payer, in the prescribed accounts within three days from the date of earning, i.e. paying out of the revenue.
The revenue referred to in paragraph 1 of this Article shall mean the gross revenue which would have been earned, i.e. collected by a non-resident legal person i.e. the resident taxpayer had the tax not been withheld from the earned i.e. paid out revenue.
The tax declaration for withholding tax referred to in paragraph 1 of this Article shall be filed within three days from the date of payment of revenue for which the withholding tax is calculated and paid in accordance with this Act.
The withholding tax referred to in paragraph 1 of this Article shall be calculated and paid in conformity with the regulations valid on the date of earning i.e. paying out of revenues.
Article 71a
If a tax declaration contains deficiencies with respect to formal correctness and mathematical accuracy, the Tax Administration shall electronically notify the tax declaration applicant of such deficiencies.
The re-filing of the tax declaration with the deficiencies referred to in paragraph 1 of this Article remedied shall not be considered filing of an amended tax declaration.
The tax declaration shall be considered filed when the Tax Administration confirms the formal correctness and the mathematical accuracy of the declared data, assigns an application number, a number of an approval for payment of the total amount of liability on that basis and delivers electronically such information to the tax declaration applicant tax.
Articles 72 and 73*
(Repealed)
Application of the Law Governing the Taxation Procedure
Article 74
With regard to the determination, collection and refunding of tax, legal remedies, penal provisions and other matters not regulated by this Act, the provisions of the law governing the taxation procedure and taxation administration shall apply.
Articles 75 and 76
(Deleted)
Articles 77-110*
(Repealed)
Article 111
The payer of revenue shall guarantee the payment of withholding tax.
All partners in a legal person set up as a general partnership shall be jointly and severally liable for that general partnership's outstanding tax liabilities to the extent of their property, and without limits.
The general partner in a legal person set up as a limited partnership shall be jointly and severally liable, and without limits, for outstanding tax liabilities of that limited partnership.
A shareholder, i.e. member of a limited liability company owning 50% or more shares i.e. stakes shall be jointly and severally liable, and without limits, for the outstanding tax liabilities of a subsidiary company.
The tax liabilities referred to in paragraphs 2 through 4 of this Article shall also include the enforced collection costs, interest and fines, as well as the costs of tax misdemeanor proceedings.
PENAL PROVISIONS
Article 112**
(Repealed)
Article 112a
In case a taxpayer fails to attach to the tax balance sheet the documentation referred to in Article 60, paragraph 3 of this Act, i.e. attaches it incompletely, the competent tax office shall issue a warning and instruct him to do so or supplement it within a time limit which may not be shorter than 30 or longer than 90 days from the date of serving of the warning.
Article 113**
(Repealed)
Article 114*
(Repealed)
TRANSITIONAL AND CONCLUDING PROVISIONS
Article 115
A taxpayer who acquired the right to the tax exemption and benefits referred to in Articles 42 and 46 of the Enterprise Income Tax Act ("Official Herald of the RS", Nos. 43/94, 53/95, 52/96, 54/96, 42/98, 48/99 and 54/99) shall have the right to use such exemption until the end of the time limit it has been set for.
Article 116
A procedure for the determination and collection of the enterprise income tax for the year 2001, commenced with pursuant to Articles 43 and 60a of the Enterprise Income Tax Act ("Official Herald of the RS", Nos. 43/94, 53/95, 52/96, 54/96, 42/98, 48/99 and 54/99) shall be finalized in conformity with that act.
Article 117
The tax balance sheet for the period from 1 January to 30 June 2001 shall be compiled in conformity with the regulations in force until the date this Act became applicable.
The tax balance sheet referred to in paragraph 1 of this Article shall be filed within eight days from the expiry of the time limit set for filing of the half-yearly statement of account.
Article 118
As of the date this Act becomes applicable, the Enterprise Income Tax Act ("Official Herald of the RS", Nos. 43/94, 53/95, 52/96, 54/96, 42/98, 48/99 and 54/99) shall be repealed.
Pending the adoption of regulations pursuant to the provisions of this Act, the regulations adopted pursuant to the act referred to in paragraph 1 of this Article shall apply.
Article 119
This Act shall enter into force on the eighth day following the date of its publication in the "Official Herald of the Republic of Serbia", and shall be applicable as of 1 July 2001, except for Article 107 which shall be applicable as of the date of entry into force of the Act.
Independent Article of the Act Amending and Supplementing the Enterprise Income Tax Act
("Off. Herald of the RS", No. 88/2002)
Article 9
This Act shall enter into force on the eighth day following the date of its publication in the "Official Herald of the Republic of Serbia", and shall be applicable as of 1 January 2003, except for Article 1 which shall be applicable as of the date of this Act’s entry into force.
Independent Articles of the Act Amending and Supplementing the Enterprise Income Tax Act
("Off. Herald of the RS", No. 43/2003)
Article 5
Banks and other financial organizations shall compile the tax balance sheet for 2003 and subsequent years in conformity with Article 2 of this Act.
Article 6
This Act shall enter into force on the day that follows the date of its publication in the "Official Herald of the Republic of Serbia".
Independent Articles of the Act Amending and Supplementing the Enterprise Income Tax Act
("Off. Herald of the RS", No. 84/2004)
Article 50
The impacts of harmonizing the initial status in business ledgers from 1 January 2004, for the purpose of applying the IAS in conformity with the regulations governing the accounting, and Article 16 of this Act, shall have no effect on the taxpayers’ established tax liability for the year 2003 and the amount of established advance payment for the year 2004.
Article 51
The Government of the Republic of Serbia shall set the way of determining and paying the monthly advance payments of the income tax for the year 2004 after this Act enters into force.
Article 52
A taxpayer may enjoy the tax credit referred to in Article 30 of this Act in the year 2004 on the basis of investments in fixed assets, made in conformity with the provisions of that Article, as of the date this Act enters into force.
Article 53
A taxpayer who had acquired the right to and started enjoying the tax benefits pursuant to Article 49 of the Enterprise Income Tax Act ("Official Herald of the RS", Nos. 25/2001, 80/2002 and 43/2003), shall carry on enjoying such benefits until the expiration of their validity period, under the conditions that were prescribed by the provisions of that Article.
Article 54
The taxpayers who acquire the right to tax incentives under this Act may not be brought into a less favorable position with regard to the conditions and time limits for the exercise of such rights due to subsequent changes in laws and regulations.
Article 55
The tax balance sheet for the year 2004 shall be drawn up in conformity with the provisions of this Act.
Article 56
The provisions of Articles 1 through 14 and Articles 16 through 19 of this Act shall be applicable as of 1 January 2004.
Article 57
This Act shall enter into force on the eighth day upon the day of its publication in the "Official Herald of the Republic of Serbia".
Independent Articles of the Act Amending and Supplementing the Enterprise Income Tax Act
("Off. Herald of the RS", No. 18/2010)
Article 71
A taxpayer which had not exercised the right to the tax incentive referred to in Articles 50a and 50b of the Enterprise Income Tax Act ("Official Herald of the RS", Nos. 25/01, 80/02, 80/02 - other law, 43/03 and 84/04) by 31 December 2009 may use the mentioned tax incentives on conditions provided by the regulations which are effective as of 1 January 2010.
Article 72
A taxpayer which, by 31 December 2009 had exercised the right to transfer of capital loss and transfer of the loss referred to in Article 30, paragraph 3, and Article 32, as well as to the transfer of the non-utilized part of the tax credit referred to in Article 52, paragraph 4 of the Enterprise Income Tax Act ("Official Herald of the RS", Nos. 25/01, 80/02, 80/02 - other law, 43/03 and 84/04) and declared the data in the tax balance sheet and the tax declaration for the year 2009, may exercise such right until expiration of the time limit and in the way provided by that act.
Article 73
The Minister of Finance shall issue the regulations referred to in Articles 3, 18, 30, 53 and 59 of this Act within 12 months from the date of entry into force of this Act.
Article 74
The tax balance sheet for the year 2009 shall be drawn up in accordance with the regulations which were valid on 31 December 2009.
Article 75
Tax liability shall be determined, calculated, and paid according to the provisions of this Act as of 1 January 2010, in keeping with the provisions of Articles 3, 6, 8, 9, 10, 11, 15, 16, 18, 20, 21, 29, 33, 34, 39, 40, 41, 47, 52, 58, and 59 of this Act.
Article 76
This Act shall enter into force on the day that follows its publication in the "Official Herald of the Republic of Serbia".
Independent Articles of the Act Amending and Supplementing the Corporate Income Tax Act
("Off. Herald of the RS", No. 101/2011)
Article 13
The provisions of this Act shall apply to determination, calculation and payment of tax liability as of the year 2012.
Article 14
This Act shall enter into force on the eighth day following the date of its publication in the "Official Herald of the Republic of Serbia", and the provision of Article 1, paragraph 1 of this Act shall be applicable as of 1 February 2012.
Independent Articles of the Act Amending and Supplementing the Corporate Income Tax Act
("Off. Herald of the RS", No. 119/2012)
Article 53
A taxpayer who had exercised the right to the tax incentives referred to in Articles 45, 48a, 50a and 50b of the Corporate Income Tax Act ("Official Herald of the RS", Nos. 25/01, 80/02, 80/02 - other law, 43/03, 84/04, 18/10 and 101/11) by 31 December 2012 and declared the data in the tax balance sheet and tax declaration for the year 2012, may exercise that right until expiry of the time limit and in the way provided by that act.
Article 54
A taxpayer who, by 31 December 2012 fails to fulfill the requirements for exercising the right to the tax incentive referred to in Article 50a of the Corporate Income Tax Act ("Official Herald of the RS", Nos. 25/01, 80/02, 80/02 - other law, 43/03, 84/04, 18/10 and 101/11), shall exercise the mentioned tax incentive on the conditions set in the regulations the validity of which runs from 1 January 2013.
Article 55
The Minister of Finance shall enact the regulations referred to in Articles 1, 15, 38 and 42 of this Act at the latest within six months from the day of entry into force of this Act.
Article 56
The provisions of this Act shall apply to the determination, calculation and payment of tax liability starting from the year 2013, while the provisions of Articles 1, 6, 7, 15, 18, 19, 22, 47 and 48 of this Act shall be applicable from the day that follows the date of entry into force of this Act.
The corporate income tax advance payment for the year 2013, which is set in the tax declaration for the year 2012, shall be set and paid by the taxpayer by applying the rate referred to in Article 17 of this Act.
Up to the start of payment of the monthly advance payment in accordance with paragraph 2 of this Article, the taxpayer shall pay the advance payment, starting from January 2013 to beginning of payment of the advance payment set in the tax declaration for the year 2012, in the amount which corresponds to the amount of the advance payment calculated for the month of December 2012, increased by 50%.
Article 57
A taxpayer who is determining the tax for a tax period which differs from the calendar year shall increase the advance payment for January 2013 and all following months in 2013, until expiry of the tax period in the year 2013, by 50%.
For the tax period which started in 2012 and is to expire in 2013, a taxpayer referred to in paragraph 1 of this Article shall file the tax balance sheet in accordance with the provisions of this Act, while the final tax liability shall be calculated by him by applying the tax rate representing the weighted average of the 10% and 15% tax rates.
The weighted average tax rate referred to in paragraph 2 of this Article shall be calculated by adding the amount obtained by multiplying number 10 by the number of the tax period months in the 2012 calendar year to the amount obtained by multiplying number 15 by the number of the tax period months in the 2013 calendar year, and dividing the thus obtained amount by 12 and adding the % indication.
Article 58
This Act shall enter into force on the eighth day upon the day of its publication in the "Official Herald of the Republic of Serbia".
Independent Articles of the Act Amending and Supplementing the Corporate Income Tax Act
("Off. Herald of the RS", No. 47/2013)
Article 20
The provisions of this Act shall apply to the determination, calculation and payment of tax liability as of year 2013, while the provisions of Articles 9, 10 and 18 of this Act shall apply as of the day following the day of the entry into force of this Act.
The provision of Article 1, paragraph 4 of this Act shall become applicable as of the day of entry into force of a law governing taxation by a special tax applied according to ship tonnage.
Article 21
This Act shall enter into force on the day that follows the day of its publication in the "Official Herald of the Republic of Serbia".
Independent Articles of the Act Amending and Supplementing the Corporate Income Tax Act
("Off. Herald of the RS", No. 108/2013)
Article 3
A taxpayer who has, by 31 December 2013, gained the right to a tax incentive referred to in Article 48 of the Corporate Income Tax Act ("Official Herald of the RS", Nos. 25/01, 80/02, 80/02 - other law, 43/03, 84/04, 18/10, 101/11, 119/12 and 47/13), and declared data in the tax balance sheet and tax declaration for 2013, may exercise such right until the expiry of the time limit and in a way prescribed by that act.
Article 4
This Act shall enter into force on the following day of the day of its publication in the "Official Herald of the Republic of Serbia", and shall apply as of 1 January 2014.
Independent Articles of the Act Amending and Supplementing the Corporate Income Tax Act
("Off. Herald of the RS", No. 142/2014)
Article 20
The provisions of the Corporate Income Tax Act ("Official Herald of the Republic of Serbia", Nos. 25/01, 80/02, 80/02 - other law, 43/03, 84/04, 18/10, 101/11, 119/12, 47/13, 108/13 and 68/14 - other law) shall apply to the determination, calculation and payment of a tax liability of taxpayers for which the proceedings that are conducted in accordance with the law governing liquidation i.e. in accordance with the law governing bankruptcy have not been completed by the date of entry into force of this Act.
Article 21
The provisions of Articles 3 and 12 of this Act shall apply in the determination, calculation and payment of a tax liability for the year 2014.
The provisions of Article 9, paragraphs 7 through 9, Article 18, paragraph 1 and Article 19 of this Act shall apply from the date specified by the law governing tax procedure and tax administration as the date starting from which the tax declarations are filed only electronically.
Article 22
This Act shall enter into force on the following day from the date of publication in the "Official Herald of the Republic of Serbia".
Independent Articles of the Act Amending and Supplementing the Corporate Income Tax Act
("Off. Herald of the RS", No. 112/2015)
Article 27
The provisions of Articles 18, 19, 25 and 26 of this Act shall apply as of 1 March 2016.
Article 28
This Act shall enter into force on 1 January 2016.
Independent Articles of the Act Amending and Supplementing the Corporate Income Tax Act
("Off. Herald of the RS", No. 113/2017)
Article 18
A taxpayer that has not met the conditions for acquiring the right to tax exemption referred to in Article 50a of the Corporate Income Tax Act ("Official Herald of the Republic of Serbia", Nos. 25/01, 80/02, 80/02 - other law, 43/03, 84/04, 18/10, 101/11, 119/12, 47/13, 108/13, 68/14 - other law, 142/14, 91/15 - authentic interpretation and 112/15) by 31 December 2017, shall use the stated tax incentive under the conditions prescribed by this Act.
Article 19
The provisions of Articles 2, 3 and 4 of this Act shall apply to the determination, calculation and payment of the tax liability for the year 2017.
The provisions of Articles 9 and 17 of this Act shall apply as of 1 April 2018.
The provisions of Articles 7 and 16 of this Act shall apply as of 1 August 2018.
Article 20
This Act shall enter into force on 1 January 2018.
Independent Articles of the Act Amending and Supplementing the Corporate Income Tax Act
("Off. Herald of the RS", No. 95/2018)
Article 14
The provisions of Article 10 of the Corporate Income Tax Act ("Official Herald of the RS", Nos. 25/01, 80/02, 80/02 - other law, 43/03, 84/04, 18/10, 101/11, 119/12, 47/13, 108/13, 68/14 - other law, 142/14, 91/15 - authentic interpretation, 112/15 and 113/17) shall be applied to the calculation of depreciation of the fixed assets acquired final and inclusive of 31 December 2018, i.e. on the last day of the tax period starting in the year 2018, while for the fixed assets classified in groups II-V, at the latest to the calculation of depreciation of these assets final and inclusive of 31 December 2028, i.e. the last day of the tax period starting in 2028.
If, by applying paragraph 1 of this Article, the final balance for: group II is less than 10%; for group III less than 15%; for group IV less than 20% and for group V less than 30%, compared to the balance determined on 31 December 2018, i.e. on the last day of the tax period starting in the year 2018, the entire balance of the group shall be recognized as the depreciation expenditure.
The calculation of the depreciation, in line with the provisions of Article 1 of this Act, shall be applied to fixed assets, acquired starting from 1 January 2019 i.e. from the first day of the tax period which begins in the year 2019.
Article 15
The provisions of this Act shall apply to determining, calculation and payment of the tax liability, starting from the year 2019, i.e. for tax period which starts in the year 2019, while the provisions of Article 4 of this Act shall apply from the day of entry into force of this Act, i.e. to determining, calculating and paying the tax liability, starting from the year 2018.
The provisions of Article 5 of this Act shall apply to the revenues generated on the basis of fees for the use of a work of authorship or a subject of a similar right, which have been deposited in the registry of the competent authority, starting from 1 January 2019.
The provision of paragraph 2 of this Article shall be applied mutatis mutandis also to the revenues generated by the holder of the right or the applicant, in relation to an invention, based on the law governing patents.
Article 16
This Act shall enter into force on the day following the date of publication in the "Official Herald of the Republic of Serbia".
Independent Articles of the Act Amending and Supplementing the Corporate Income Tax Act
("Off. Herald of the RS", No. 86/2019)
Article 9
The provisions of this Act shall apply to the determination, calculation and payment of a tax liability starting for the year 2020, i.e. for the tax period which starts in the year 2020, while the provisions of Article 1 of this Act shall apply to the determination, calculation and payment of a tax liability starting for the year 2019.
Article 10
This Act shall enter into force on the eighth day following the date of its publication in the "Official Herald of the Republic of Serbia".
Independent Articles of the Act Amending and Supplementing the Corporate Income Tax Act
("Off. Herald of the RS", No. 153/2020)
Article 10
The provisions of this Act shall be applied to determining, calculating and paying the tax liability, starting with the year 2021, i.e. for the tax period which begins in the year 2021.
The provisions of Article 1, paragraph 2, Article 2, paragraph 5 and Article 3 of this Act shall be applied as of the date of entry into force of the law governing digital assets.
Article 11
This Act shall enter into force on the eighth day following the date of its publication in the "Official Herald of the Republic of Serbia".
Independent Articles of the Act Amending and Supplementing the Corporate Income Tax Act
("Off. Herald of the RS", No. 118/2021)
Article 2
The provisions of this Act shall apply to the determination, calculation and payment of tax liabilities starting for the year 2022, i.e. for the tax period starting in the year 2022.
Article 3
This Act shall enter into force on the eighth day following the date of its publication in the "Official Herald of the Republic of Serbia".
PUBLISHER’S NOTE
* On the date of commencement of application of the Tax Procedure and Tax Administration Act ("Off. Herald of the RS", No. 80/2002), i.e. January 1, 2003, Articles 72, 73, 77-110 and 114 have ceased to be valid.
** Articles 112 and 113 of the Corporate Income Tax Act ("Off. Herald of the RS", Nos. 25/2001, 80/2002, 80/2002 - other law, 43/2003, 84/2004, 18/2010, 101 /2011, 119/2012, 47/2013 and 108/2013) have ceased to be valid on July 4th, 2014, on the day of entry into force of the Act Amending and Supplementing the Tax Procedure and Tax Administration Act ("Off. Herald of the RS", No. 68/2014).
AUTHENTIC INTERPRETATION
OF THE PROVISIONS OF ART. 27, 28, 40, AND 71 OF THE CORPORATE INCOME TAX ACT ("OFFICIAL HERALD OF THE RS", NO. 25/01, 80/02, 80/02 - OTH. ACT, 43/03, 84/04 AND 18/10) AND ARTICLE 41, PARAGRAPH 3 OF THE TAX PROCEDURE AND TAX ADMINISTRATION ACT ("OFFICIAL HERALD OF THE RS", NO. 80/02, 84/02 - CORRECTION, 23/03 - CORRECTION, 70/03, 55/04, 61/05, 85/05 - OTH. ACT, 62/06 - OTH. ACT AND 61/07)
("Off. Herald of the RS", No. 91/2015)
According to the Corporate Income Tax Act ("Official Herald of the RS", No. 25/01, 80/02, 84/02 - other Act, 43/03, 84/04, 18/10 - hereinafter: the Act) Art. 27, 28, 40, and 71, a capital gain is considered to be the revenue that the taxpayer realizes from the sale i.e. other transfer for a fee of: immovable property; industrial property rights; stakes in the capital of legal persons and shares and other securities, which, in accordance with IAS and IFRS, represent long-term financial placements, except for bonds issued in accordance with the regulations governing the settlement of the Republic's obligations on the basis of a loan for economic development, foreign currency savings of citizens, and debt securities whose issuer, in accordance with the law, is the Republic, an autonomous province, a local self-government unit or the National Bank of Serbia.
Capital gain is also considered to be the revenue earned by a non-resident taxpayer from the sale of property from paragraph 1, item 1), 3) and 4) of Article 27 of the Act, as well as from the sale of immovable property in the territory of the Republic that he did not use for the performance of his activities.
Capital gain represents the difference between the sale price of the property and its purchase price (paragraphs 1 and 2 of Article 27 of the Act).
In the case of securities traded on the organized market, in the sense of the law governing the market of securities and other financial instruments, the purchase price is the price that the taxpayer documents as actually paid, and if he does not have the appropriate documentation - the lowest market price realized on the organized market in the period of a year preceding the sale of that security or in the trading period, if it was traded for less than one year.
In the case of securities acquired through a founding stake or by increasing the founding stake, the purchase price is the market price that was valid on the organized market on the day of entry of stakes or, if such a price was not formed, the nominal value of the securities on the day of entry of stakes.
The purchase price of stakes in the capital of legal persons and industrial property rights is the price that the taxpayer documents as actually paid. The purchase price of stakes in the capital of legal persons and industrial property rights, acquired through the founding stake or by increasing the founding stake, is the market price on the day of entry of the stake.
Capital gain is included in taxable income in the amount determined in the manner referred to in Articles 27 to 29 of the Act.
On revenues earned by a non-resident legal person from a resident legal person, another non-resident legal person, natural person, non-resident or resident or from an open investment fund, in the territory of the Republic, based on capital gains arising in accordance with the provisions of Art. 27 to 29 of the Act, tax is calculated and paid according to the decision at a rate of 20%, unless otherwise regulated by an international treaty on the avoidance of double taxation.
When calculating the withholding tax on the revenues of a non-resident, the payer of the revenue applies the provisions of the treaty on the avoidance of double taxation, provided that the non-resident proves the status of a resident of the state with which the Republic has concluded a treaty on the avoidance of double taxation and that the non-resident is the actual owner of the revenues.
Withholding tax on revenues from Article 40, para. 1, 2, 3 and 12 of the Act for each taxpayer and for each individually realized i.e. paid revenue, the payer calculates, withholds and pays to the prescribed accounts on the day when the revenue is realized i.e. paid.
When a legal person (resident i.e. non-resident) enters the assets as a non-monetary contribution (e.g. shares) and increases the basic capital in its dependent resident legal person and increases the value of its stake in that legal person, the provisions of Article 27 of the Act should be understood as the assets were transferred for a fee. If there is a difference between the value at which the taxpayer acquired the assets in question and the value at which such assets were recorded in the business ledgers of the dependent legal person, it is considered that there has been a capital gain in the sense of Article 27 of the Act.
The taxpayer of the withholding tax, in accordance with Article 40, paragraph 1 of the Act, is a non-resident legal person, while in terms of the provisions of Article 71, paragraph 1 of the Act, a resident legal person is obliged to calculate and pay the relevant tax (on behalf and for the account of the non-resident taxpayer) at a rate of 20%, unless otherwise regulated by an international treaty on the avoidance of double taxation (a foreign non-resident legal entity is registered as a private company with limited liability in the Netherlands Antilles).
This authentic interpretation shall be published in the "Official Herald of the Republic of Serbia".