Tax reliefs on salaries for new employees - Which amendments to Individual Income Tax Law can we expect

The Draft of amendments to the Individual Income Tax Law stipulates tax reliefs on the salaries that employers in the private sector pay to their new workers.

According to this proposal that has recently been adopted by the Serbian government, the employer will have a right to a 65% tax return if minimum one and maximum ten new workers are hired, a 70% tax return if the number of new employees is between 10 and 99, and a 75% tax return if minimum 100 new workers are hired.

As it was explained, the proposed tax relief will make it possible for employers to cut the costs of their operations and encourage legal employment.

Amendments to the Individual Income Tax Law will be in effect as of 1 July 2014.

The Draft stipulates that any employer, that is, entrepreneur, who hires a new worker has a right to a tax return for all salaries paid by 30 June 2016.

The Serbian government expects the effect of these tax reliefs and all the reliefs stipulated by the Draft Law on Amendments and Supplements to the Law on Mandatory Social Insurance Taxes will be the inflow of about RSD 0.5 billion per every 10,000 new employees.

Amendments to the Individual Income Tax Law have been forwarded to the National Assembly for urgent adoption, and will take effect eight days after they're published in the Official Gazette.

To view the complete Draft of amendments to the Individual Income Tax Law