The Serbian Parliament adopted yesterday a set of tax-related laws which, among other things, stipulate bigger fiscal incentives for micro and small enterprise and smaller fines for citizens who fail to pay their taxes on time.
The aim of the Law on Personal Income Tax is to eliminate the ‘grey zone’ in employment and its legalization through promoting legal employment. This will be done through several stimulative measures including 65%, 70% and 75% salary tax reduction, depending on the number of employees, which validity is now extended by the end of 2017. These measures used to be valid only for the companies with 100 and more employees, but are now extended to include small and micro companies which have up to 2 employees which, ending on 31st December, 2017, can count on 75% reduction in salary tax for new employees. The amendments to the Law on Tax Procedures and Tax Administration stipulate lowering fines for citizens who don’t pay their taxes on time, from the current 50,000 to 5,000 Dinars.
Also, the law promotes creating an environment conducive to proper implementation of regulation and setting deadlines for electronic tax filing which significantly reduces administraton costs, and increases tax discipline and tax base. Also, the law changes the stipulations about unregistered business activities, namely if tax bodies conclude that there is an unregistered business activity, they issue an order of tax payment which should be executed within the 15-day-deadline and give another 30 days to business owners to properly register their businesses.
The amendments to the Law on Capital Market stipulate that the European Bank for Reconstruction and Development (EBRD), the International Bank for Reconstruction and Development (IBRD), AFC and other parts of the World Bank system can help the Serbian market through Dinar bonds, long-term instruments and other means. The amendments to the Law on Profit Tax stipulate introduction of the standard procedure for dealing with non-performing loans for banks and everybody involved in the process.
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