The Ministry of Finance published an official explanation relating to annual individual income tax for 2019.

The legal framework remained unchanged compared to previous years and there will be no postponing of deadline for filing the application as a result of current COVID-19 crisis – the application shall be filed no later than 15 May 2020.

In the following text you can see whether you are obliged to file the application this year and if so, in what manner.

Non-taxable amount for 2019

Annual individual income tax is payable by natural persons whose income in a calendar year was greater than three times the average annual salary per employee paid out in the Republic in the year for which the tax is being charged.

According to the official records, the average annual salary per employee in the Republic of Serbia for 2019 was RSD 909,768.00, hence the non-taxable income for 2019 is RSD 2,729,304.00.

Taxable income

Taxable income is the difference between income reduced by taxes and contributions for mandatory social insurance paid for the income earned in the calendar year concerned and the non-taxable amount of RSD 2,729,304.00.

Tax base

Tax base for annual individual income tax is the difference between taxable income and personal deductions amounting to:

• For taxpayer – 40% of average annual income per employee, which is RSD 363,907.00;
• For dependant family member – 15% of average annual income per employee, per member, which is RSD 136,465.00.

Tax rates

If the taxpayer earned taxable income in the amount of:

• Up to six times the average annual earnings (which is for 2019 RSD 5,458,608.00) – 10% rate shall apply;
• Over six times the average annual earnings – 10% rate shall be applied to the amount up to RSD 5,458,608.00 and 15% rate to the amount above RSD 5,458,608.

Filing tax application

Tax application is filed in Form PPDG-2R as prescribed by the Rulebook on forms of tax applications for establishing individual income tax payable upon decision.

The tax application can be filed by taxpayer in electronic or printed form.

In electronic form, the tax application shall be filed via e-services of Tax Administration, and the applicant is obliged to electronically sign the application using qualified electronic certificate.

In printed form, the application may be filed by:

• resident taxpayer directly or via regular mail, to the organisational unit of Tax Administration responsible for the territory where they reside/stay;
• non-resident taxpayer through authorised representative in written form, to the organisational unit of Tax Administration responsible for the territory where they realised income i.e. place of stay or residence of the taxpayer or seat of the authorised representative.

Tax payment

Taxes shall be payable upon receipt of the decision from Tax Administration, in accordance with the instructions contained therein.

Deadline for payment is 15 days upon receipt of the decision, while possible appeal against the decision shall not delay the enforcement i.e. tax payment obligation.

This article is to be considered as exclusively informative, with no intention to provide legal advice.
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