The Ministry of Finance of the Republic of Serbia recently published a Notification regarding the annual personal income tax for 2024 (link).
The annual personal income tax is regulated by the Personal Income Tax Law (“Law”), with the latest amendments which have been in effect since March 14, 2025. Individuals who have earned an income exceeding three times the average annual salary per employee, paid in the Republic of Serbia during the calendar year are subject to this tax.
What are the key points regarding the 2025 personal income tax?
The annual personal income tax return for 2024 must be submitted the latest on May 15, 2025, exclusively electronically via the Tax Administration’s portal (eTaxes), using the prescribed form PP GPDG.
As of April 1, 2025, the Tax Administration has made pre-filled tax returns available on the portal, and the taxpayer is required to check, supplement, and confirm them.
If the Tax Administration does not provide a draft return, the taxpayer is obligated to complete and submit the return independently.
Non-residents must file the return through a tax representative.
The taxpayers are individuals (residents and non-residents) whose income in 2024 exceeded three times the average annual salary per employee in the Republic of Serbia:
The non-taxable threshold for income earned in 2024 is RSD 4,874.508 (three times the average annual salary per employee in 2024).
The tax base for the annual personal income tax is the taxable income, calculated as the difference between the income subject to tax and personal deductions, in accordance with the Law.
The tax applies to income earned and paid between January 1 and December 31, 2024, regardless of the period to which it relates, including:
Income is reduced by the tax and mandatory social security contributions paid in Serbia by the income earner (for residents), and by tax paid abroad on such income.
Refunds of overpaid contributions (if contributions exceeded the annual cap, which is RSD 6,881,640 for 2024) are included as income in the year the refund is received.
A special deduction is available for taxpayers under 40 years of age as of December 31, 2024. Their total annual salaries and taxable income from self-employment and copyrights (after tax and contributions) are further reduced by RSD 4,874,508 (three average annual salaries). This deduction cannot exceed the total amount of such income.
Taxable income is the difference between total annual income (reduced by tax, contributions, and special deductions) and the non-taxable threshold.
On such determined income, the taxpayer is entitled to personal deductions as follows:
The total amount of personal deductions cannot exceed 50% of the taxable income.
The tax base is the taxable income, i.e., the difference between the income for taxation and personal deductions. The tax rate is 10% on taxable income up to RSD 9,749,016 (six times the average annual salary) and 15% on the portion of taxable income exceeding RSD 9,749,016.
A taxpayer who invests in an alternative investment fund is entitled to a tax credit of up to 50% of the investment amount, but no more than 50% of the total tax liability under the annual personal income tax. This right is lost if the taxpayer transfers the shares or stakes within three years of acquisition. In such cases, the taxpayer must notify the competent tax authority and pay the lost credit amount with interest.
The annual personal income tax is determined and paid under the self-assessment tax system. The taxpayer is responsible for the accuracy of the data and timely submission of the return.
This means that taxpayers must, without a decision from the Tax Administration, pay the tax liability by the tax return deadline, based on the amount determined in the return.
Failure to submit the return or pay the tax may result in misdemeanour or other penalties.
Author:
Tara Govedarović, Associate
Email: tara.govedarovic@prlegal.rs