Overview of Serbia’s 2023 Income Tax Regulations and Non-Taxable Thresholds

As of February 26, 2024, the Ministry of Finance in Serbia has released crucial information regarding the non-taxable amounts applicable to the annual tax return for incomes earned in 2023. This update aims to provide individuals with clarity on taxation thresholds, deductions, and the legal deadline for filing their annual tax returns.

Non-Taxable Income Threshold

For the 2023 income tax, the non-taxable income threshold has been set at 4,269,564 RSD, equivalent to approximately EUR 36,500. This threshold reflects three times the average annual salary per employee paid in Serbia during the year 2023 (1,423,188 x 3).

Taxation Scope for Residents and Non-Residents

Residents in Serbia are required to include all income, whether earned within the country or abroad, in their taxable income. Non-residents, on the other hand, are only subject to taxation on income earned within the territorial boundaries of the Republic.

Special Consideration for Individuals Under 40

Individuals below the age of 40 are eligible for an additional reduction in taxable income for the annual personal income tax, as outlined in Article 87, paragraph 4 of the Law. This reduction is equivalent to the non-taxable amount of annual personal income tax, which is set at 4,269,564 dinars.

Personal Deductions

According to Article 88 of the Income Tax Law, taxpayers can benefit from personal deductions, including:

  • 40% of the average annual salary per employee, totaling 569,275 RSD (approx. EUR 4,860) (1,423,188 x 40%)
  • 15% of the average annual salary per employee for each dependent family member, amounting to 213,478 RSD (approx. EUR 1,825) (1,423,188 x 15%).

Income Tax Rates

Serbia maintains a progressive personal income tax rate structure. Incomes up to double the threshold (up to EUR 73,000) are subject to a 10% tax rate, while the incomes above the double threshold face a 15% tax rate.

Legal Deadline for Tax Return Submission

Taxpayers are reminded that the legal deadline for submitting and paying the 2023 annual tax return is May 15, 2024.

To conclude, understanding the non-taxable thresholds, deductions, and legal timelines for the 2023 income tax in Serbia is essential for individuals navigating the tax landscape. With clear guidelines on taxation scope, deductions, and deadlines, individuals can ensure compliance while optimizing their financial positions.

For inquiries, contact Eurofast Serbia at the provided Belgrade office at belgrade@eurofast.eu.

Aleksandar Maljkovic
Tax Advisor
Eurofast Belgrade