A single word added to Article 18 of the Law on Income Tax could leave most employees in Serbia without the money they get for travel expenses.
If the amendment is adopted, as of January 1st, employers will have to choose whether to buy tickets for their workers to travel to work, or produce tickets themselves and get reimbursed for that, or give their workers money for travel expenses on which the employers will have to pay 10% tax.
At the beginning of the year, the Ministry of Finance gave an official opinion which already indicated that everything related to the workplace should be covered by “documentation” if the employer wanted for the travel expenses to remain tax-free.
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It is clear that the text of the law will have to be adhered to, but it is difficult to understand which will be the most favourable option.
“The third option, i.e. paying a tax on money for travel expenses, would be the most convenient, but requires additional funds. We cannot predict what employers will decide, as we do not know how most of them currently act. We have no information as to whether any checks or sanctions have been carried out. Since this is now incorporated into the law, it will also be the basis for charging fines,” explains Rada Stojanovic, Deputy Editor-in-Chief of Accounting Practice magazine.
The current Law on Income Tax, as well as the future draft, sets a limit of 3,837 dinars for non-taxed travel expenses.
The draft Law on Income Tax also stipulates an increase in the non-taxable segment of salary. Instead of the previous 15,300 dinars, the non-taxable part will amount to 16,300 dinars. Also, according to the draft law, if a company grants a scholarship or a loan to a student that does not exceed 30,000 dinars per month, it is not eligible to pay tax on that. The current limit is 11,741 dinars.
This post is also available in: Italiano