All resident natural persons whose annual worldwide income exceeds three times the average annual salary paid in the Republic of Serbia in the previous year must pay the annual personal income tax. All non-resident natural persons have the same obligation for their annual income earned in the territory of the Republic of Serbia in the previous year.
The income of natural persons
According to the Personal Income Tax Law, natural persons’ income includes the total annual amount earned from wages, self-employment taxable income, copyright and related rights and industrial property rights, movable and immovable property leasing income, as any other income specified in Article 85.
The income subject to taxation amounts to the difference between the previously defined income and the non-taxable amount of 3,719,376 dinars. In contrast, the taxation basis is the taxable income deducted by personal deductions.
Personal deductions for the taxpayer amount to 40% of the average annual salary per employee paid in the Republic, i.e. 495,917 dinars. In contrast, for dependent family members, it amounts to 15% of the yearly average wage per employee paid in the Republic, i.e. 185,969 dinars. It is important to note that the total personal deductions amount cannot exceed 50% of the taxable income.
The annual personal income tax rate
The annual personal income tax rate is progressive and amounts to:
- 10% on taxable income up to six times the average yearly salary, i.e. up to 7,438,752 dinars),
- 15% on taxable income that exceeds six times the annual average wage.
Individuals pay a tax of 10% on the amount up to six times the average annual salary and a surcharge of 15% on the amount exceeding six times the average yearly wage.
The deadline for reporting and paying
Taxpayers must report and pay their annual personal income tax for income earned in 2022 electronically using the PPDG-2R form by May 15, 2023.
