Tax Highlights - October 2020
19 October 2020
ANNOUNCEMENT OF THE TAX ADMINISTRATION ON THE CONTROL OF INCOME FROM ABROAD
The Tax Administration of the Republic of Serbia on October 13, 2020 has published a statement on its website alerting the individual taxpayers to voluntarily declare income earned from abroad and pay undeclared taxes and other obligations arising on that basis in order to avoid misdemeanor liability. Namely, the Tax Administration, based on available data on payments from abroad, determined that there is a large number of individuals who did not report income and fulfilled tax obligations, and according to the announcement given, those individuals are identified.
The purpose of the statement is to encourage individuals to, in accordance with the Article 182b of the Law on Tax Procedure and Tax Administration, voluntarily report and pay tax and other liabilities arising from foreign income, before initiating the tax control or misdemeanor proceedings that may entail misdemeanor penalties or criminal liability.
The tax return that is submitted in case of income from abroad is submitted on the PP OPO Form and can be submitted physically - in person or by mail and electronically (with a qualified electronic certificate). The legal deadline for filing a tax return and paying the tax and contributions liability is 30 days from the day of earning income.
Depending on the type of income and individual’s social insurance status, the taxpayer is obliged to pay tax or taxes and contributions for mandatory social insurance based on the income received.
In the event that, on the basis of income earned in/from another country, the tax on that basis is paid in that other country, the tax residents of the Republic of Serbia, in accordance with the Law on Personal Income Tax, have the right to use the tax paid in another country as a tax credit, i.e. they can reduce their tax liability determined in the Republic of Serbia by the amount of tax paid in that other country. In order to exercise the right to a tax credit, the taxpayer must have a confirmation from the competent tax authority of the other country that the tax has been paid with stated amount.
BDO Serbia provides service of analysis of the specific tax situation, definition of tax treatment and accordingly, preparation and submitting of the tax return PP OPO for individuals. The contact details of Tax Department are given below.