• Tax Highlights - July 2018
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Tax Highlights - July 2018

05 July 2018

DRAFT VERSION OF LAW ON AMENDMENTS TO THE PROPERTY TAX LAW

Ministry of Finance, Republic of Serbia has published Draft version of Law on amandments to the property tax law. It is expected that the Law would be passed to the Serbian Parliament for adoption. Planned changes to the law should be applied for the purpose of determining property tax for 2019. Below are presented some of the important proposed amendments:

  • Introduction of taxation of right to use water land in the public property which has area over 10,000 m2;
  • It is more precisely defined what is considered to be land for the purpose of property tax, so the land is considered to be also trails, open spaces for parking, fences, supporting walls, playgrounds, monuments, etc.
  • It is clarified how to determine the area of 10,000 m2 to which property tax is not paid when taxing land whose parts are classified into different types or zones;
  • It is precisely what is considered as integral part of the building;
  • Taxpayers which keep business books (companies), as well as those not keeping business books, can reduce the value of building, as a basis for property tax, for depreciation;
  • The value of sports facilities, fairgrounds, basements, roofs over 10 square meters is reduced by 40% and thus determines the tax base for calculating property tax;
  • For the purpose of classifying the immovable property for the purpose of determining the tax base, unfinished construction land used for cultivation of plants is classified as agricultural land, while the unfinished construction land used for cultivation of forests is classified as forest land;
  • More precise definitions for all groups of immovable properties for determining the tax base for property tax;
  • Taxpayers who keeps business books do not have more possibility of using the fair value of immovable property as a basis for property tax;
  • The tax rate for taxpayers who do not keep books for immovable property (except for land) up to RSD 50,000,000 can be up to 0.4%, and for a immovable property value over RSD 50,000,000 can be increased up to 0.5%;
  • More precise is definition what is considered as a land under the building;
  • For buildings that by decision of the competent authority approved reconstruction, the established tax is reduced by 50%;
  • It is more prescribed that the gift and inheritance tax is paid for the inheritance and gift of the right on a used motor vehicle, vessel or aircraft;
  • It is now precisely prescribed what is considered to be used motor vehicle, vessel or aircraft;
  • Prescribed exempts of taxation of inheritance and gift are unused motor vehicles, vessels and aircrafts,  body parts and human organs, transfer of inheritance and gift of the industrial property rights which is, according to VAT Law, considered to be performed outside the Republic of Serbia;
  • It is more precise that the tax on the transfer of absolute rights is paid when transferring ownership rights for a fee on used motor vehicles, vessels or aircraft;
  • Prescribed payment the tax on the transfer of absolute rights for rent water land in the public property.
  • Prescribed exemption from taxation by transfer tax for transfer of industrial property rights which are, according to the Law on VAT, considered to be performed outside of Serbia;
  • It is prescribed that an entity which buys or sells immovable property through document compiled and certified by a notary, submits transfer tax return through notary;
  • Taxpayers for tax on gift and inheretance and transfer of absolute rights submit tax returns  throug the notary, who compiled and certified or made an executive decision based on the transfer of the right to inheritance or gift, or the transfer of absolute rights to immovable property.
  • The Law will prescribe obligation of competent authorities to verify signatures (other than notary) to provide contracts and other documents (inheritance decision, decision on acquisition, termination or transfer of property right to immovable property) to tax authorities and local administration within 10 days from date of the certification signatures;
  • Monetary fine is introduced for responsible persons in competent authorities, if they do not provide or do not provide within the prescribed deadline prescribed documents to competent authorities;
  • Monetary fine is introduced for individuals and legal entities who have used tax exemption, and than do not report to tax authorities change of circumstances in which they have lost right to tax exemptions;
  • Monetary fine is introduced for notary who does not inform the taxpayer about obligation to submit tax return and does not submit to competent authorities tax return and other documents.

From 1 July 2018 in applying a new Rulebook on the manner of submitting tax returns for property tax, transfer tax on absolute rights and inheritance and gift tax through Notary.

Also, from 1 July 2018 forms of tax returns PPI-1, PPI-2, PPI-3 i PPI-4, are changed where is inter alia, enabled to be marked if the tax return is submitted through a Notary.

 

RULEBOOK ON THE MANNER OF SUBMITTING TAX RETURNS FOR PROPERTY TAX THROUGH NOTARY

From 1 July 2018 in applying a new Rulebook on the manner of submitting tax returns for property tax, transfer tax on absolute rights and inheritance and gift tax through Notary.

Also, from 1 July 2018 forms of tax returns PPI-1, PPI-2, PPI-3 i PPI-4, are changed where is inter alia, enabled to be marked if the tax return is submitted through a Notary.