Personal taxes are a key segment of the tax system in Serbia and directly affect the financial situation of citizens. Personal income tax in Serbia is paid on income earned not only in the country, but also worldwide, which means that residents of Serbia are obliged to declare and tax foreign income. At the same time, international agreements on the avoidance of double taxation are applied, which allow citizens to avoid double payment of taxes on the same income. This obligation particularly applies to athletes, engineers, seafarers and persons temporarily working abroad, especially in cases where it is unclear at first glance whether they still have the status of tax residents of Serbia.

Proper understanding of tax obligations and available reliefs can significantly contribute to the optimization of expenses and planning of personal finances, while failure to declare income is a criminal offense that carries serious sanctions. Understanding personal taxes allows citizens not only to avoid potential penalties, but also to take advantage of available tax reliefs that can reduce their overall tax burden. Below, we will take a closer look at key aspects of personal taxes in Serbia, as well as ways in which citizens can effectively manage their tax obligations.

The following types of income are subject to personal income tax:
• salary,
• income from self-employment,
• income from copyright and related rights and industrial property rights,
• income from capital,
• income from real estate,
• capital gains,
• other income.
The taxpayer of personal income tax is a resident of the Republic of Serbia, for income earned on the
territory of the Republic of Serbia and in another country.
A resident of the Republic is a natural person who:
1. has a residence or center of business and life interests on the territory of the Republic, or
2. resides in Serbia, continuously or intermittently, for 183 days or more in a period of 12 months
beginning or ending in relation to that tax year.

EARNINGS

The taxpayer of income tax is a natural person who earns income.
Earnings, within the meaning of this law, are considered to be:
1. Salary earned on the basis of an employment relationship, defined by the law regulating
employment relationships, as well as other employee income.
2. Contracted remuneration and other income earned by performing temporary and occasional
work based on a contract concluded directly with the employer, as well as based on a contract
concluded through a youth or student cooperative, except for a person under the age of 26, if he or
she is studying at secondary, high or higher educational institutions.
3. Personal earnings of entrepreneurs and agricultural entrepreneurs, which are paid and
determined in accordance with this law.
4. Remuneration received by an employee from a related party in connection with work for a
domestic employer, where, within the meaning of the law governing corporate income tax, the
person is considered related to the employer.
5. Benefits based on employment rights that are realized upon termination of employment.

INCOME FROM SELF-EMPLOYMENT

A taxpayer for self-employment income is a natural person who generates income by performing an
activity registered with the competent authority, and pays self-employment income tax on taxable profit

(entrepreneur), or on a lump-sum income (flat-rate entrepreneur). Taxable income from self-employment is taxable profit, and for a lump-sum entrepreneur it is a lump-sum income.

INCOME FROM COPYRIGHT AND RELATED RIGHTS AND INCOME FROM INDUSTRIAL
PROPERTY RIGHTS

Income from copyright: written works (literary, scientific, professional, and other), spoken
works, dramatic and musical works, pantomime and choreographic works, musical works with or
without words, cinematographic works, works of fine art, cartographic works, conceptual projects,
sketches, drawings, comics, crossword puzzles, editorial works, translations, proofreading and
other adaptations, awards at competitions, performances of works, use of musical materials,
creation of prototypes of artistic objects, works of applied art, other works of authorship.
Income from related rights: interpreter’s rights, phonogram producer’s rights, videogram
producer’s rights, broadcast producer’s rights, database producer’s rights.
Income from industrial property rights: patents, petty patents, trademarks, models and designs,
technical improvements.
The taxpayer of income tax from copyright and related rights and industrial property rights is a natural
person who, as an author, holder of related rights or owner of industrial property rights, receives
remuneration on these grounds.
The taxpayer is also the heir of property rights, as well as any other natural person who receives
compensation on these grounds.

INVESTMENT AND DIVIDEND INCOME

Also worth noting are the taxes on the following so-called investment income that individuals must
pay:
1. interest on savings and other deposits (time and demand), as well as on debt and similar securities
2. dividends and profit distribution
3. income from an investment unit of an open-end investment fund
– income from owning an investment unit of an alternative investment fund, excluding the transfer
fee for that investment unit
4. seizure of property and use of services of a commercial organization by the owner for his personal
needs and consumption

INCOME FROM REAL ESTATE

By income from real estate is considered to be income that the taxpayer earns by leasing or subleasing
real estate. Real estate income is the rent earned, which also includes the value of all obligations performed and services to which the tenant has committed, except for obligations to pay costs incurred during the lease, which depend on the tenant’s consumption volume (e.g. electricity, telephone, etc.).
Real estate includes:
1. land;

2. residential, commercial and other buildings, apartments, business premises, garages and other
(above-ground and underground) construction objects, or their parts.
The taxpayer of real estate income tax is a natural person who, by leasing or subleasing real estate,
generates income on that basis.

CAPITAL GAINS

Capital gain or loss represents the difference between the selling price of rights, shares and
securities and their purchase price, realized through the transfer of:
1. real rights to real estate;
2. copyright and related rights and industrial property rights;
3. shares in the capital of legal entities, shares and other securities;
4. investment units, except for investment units of voluntary pension funds, which are purchased by
an open-ended investment fund, in accordance with the law governing open-ended investment
funds;
5. investment units of an alternative investment fund, in accordance with the law governing
alternative investment funds;
6. digital assets.
A transfer is considered a sale or other transfer for monetary or non-monetary consideration.
The taxpayer of capital gains tax is any natural person, including an entrepreneur, who has transferred
rights, shares and securities referred to in this article.

OTHER INCOME

Other income is considered to be: income earned by the taxpayer by leasing equipment, means of
transport and other movable property, winnings from games of chance, income from personal insurance,
income from athletes and sports experts, income from providing catering services in accordance with the
laws regulating tourism and catering, and other income.
Given that personal income tax is paid on different types of income, each type of income has its own tax
rates, benefits and requirements for filing a tax declaration. Given the complexity and variety of tax
obligations, we recommend that you contact our specialists. Our team will help you correctly understand
all aspects of the tax system, take advantage of available benefits and optimize your tax obligations.
Contact us and ensure effective and safe management of your finances.