10 year corporate tax holiday
Companies are exempt from corporate profit tax for 10 years, from the first year in which they report taxable profit, provided that they have invested an amount exceeding RSD 1 billion (cca € 8.2 million) in fixed assets, and that they employed at least 100 additional employees on an indefinite contract.
Carrying forward of losses 5 years
Serbian tax law allows the tax loss stated in the tax return to be carried forward and offset against future profits over a period of up to 5 years.
Social insurance and annual Income tax deductions
Salary tax base deduction : In the fixed amount of ca. € 125 /per month for an employee working full-time hours.
Salary tax is not payable on any employee’s receipts based on the following:
- Public transport allowance (to and from the place of work) up to RSD 3,837
- Per diem allowance on business trips in the country (up to RSD 2,236) and per diem allowance on business trips abroad up to 50 EUR
- Accommodation allowance on business trips, against presented bills
- Transport allowance on business trips against public carrier bills and when the use of the employee’s own motorcar for business trips or other business purposes is permitted under laws and regulations up to 30% of the gas cost, and not exceeding RSD 6,716 per month
- Solidarity relief in the event of sickness, medical rehabilitation or disability of an employee or member of his/her family up to RSD 38,370
- New Year & Christmas presents for employees’ children aged up to 15 up to RSD 9,313 per child
- Awards for employees up to RSD 19,183 per year
Reimbursement of Income Tax and Social insurance contributions for New Employees
An employer who employs a new employee is eligible for a partial reimbursement of paid contributions for mandatory social security insurance and paid income tax for each newly employed person (person registered at the National Employment Service as unemployed for at least 6 months uninterruptedly), paid out not later than 31th December 2017.
The employer is eligible for this relief if this employment increases the number of employees in comparison to the period leading up to 31st March 2014. The rates for tax relief are as follows:
|Over 100 employees|
In addition to existing benefits, the Republic of Serbia is offering financial support to investors. The funds may be awarded for financing investment projects in the manufacturing sector and the services sector which may be subject to international trade.
State funds may be awarded for financing investment projects in the manufacturing, service sector object to international trade, hotel accommodation services, agriculture and fishery.
The awarded funds are up to 50 % - 70 %, (depending on the size of the company) of the investment amount, based on the investment value or based on the 2-year gross salary of the employees.
Incentives of AP Vojvodina
Just as it is done on the republic level, the financial incentives within the same sectors and limitations are allocated on the provincial level.
Two distuinguished types of incentives are:
- Subsidizing new employment · 10 - 100 new employees · 3,000 - 5,000 euros per worker
- Co-funding new equipment · up to 50 % of total equipment value
Financial Incentives for Job Creation - National Employment Service
National Employment Service is administering grants for different employment support schemes
1. New Employment
A lump sum financial subsidy for job creation is granted to employers in the private sector that are employing the following categories of unemployed persons registered at the National Employment Service:
- young people under 30 years of age,
- people older than 50 years,
- unemployed due to redundancy,
- members of the Roma Nationality,
- persons with disabilities.
The level of subsidies depends on the level of development of the municipality in which the employer is registered or where the employer has the organizational unit, and can range from RSD 150,000 to RSD 300,000 (cca. EUR 1,250 – 2,500)
2. Apprenticeship Program
The Apprenticeship Program allows employers to hire apprentices without the employment contract for a period of 6 months. For the program duration, the National Employment Service will provide compensation to apprentices from RSD 10,000 to RSD 14,000 (cca. EUR 80 – 115), depending on their educational level.
3. Re-Training Program
The National Employment Service is participating in the financing of the training programs up to RSD 90,000 (cca. EU 750) at the request of the employer – in case there is no workforce with necessary skills registered at the National Employment Service.
The training program can last up to 3 months (i.e. 480 hours) depending on the level of complexity of the program. Upon completion, the employer is required to hire on an indefinite basis those trainees that have successfully completed the training program.
National Employment Service Grant
|EMPLOYMENT SUBSIDIES||APPRENTICE PROGRAM||RE-TRAINING PROGRAM|
|ca. EUR 850 - 1700|
|ca. EUR 170 - 210|
|max ca. EUR 850|