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Considering that employees temporarily working outside the country of origin are entitled to a tax credit, and Serbia also has numerous agreements to avoid double taxation, in practice few are also indebted to Serbian finances.
The right to a tax credit based on the tax paid on the salary you earned, in practice means that the tax in Serbia should be paid only by a worker employed in a country that taxes wages at a lower rate than Serbia. Our regulations specify that the amount of this fee is 10 percent. This means that those in whom this rate is lower are obliged to pay part of the tax in Serbia. The law also stipulates an upper limit, such a loan cannot be higher than the tax that would be paid on such earnings in Serbia. Guest workers working in all countries are entitled to a tax credit.
CONTRIBUTIONS DO NOT HAVE TO BE PAID
INVITED WORKERS receive amnesty from the laws that regulate this area, as well as pension, health and unemployment cases.
– Citizens of Serbia employed abroad with a foreign employer are not insured by compulsory social insurance on the basis of the salary they receive from that foreign employer – they point out at the Ministry of Finance.
– For people who are not insured according to national regulations, there is no obligation to calculate and pay contributions for mandatory social insurance. Consequently, our citizens employed by foreign employers abroad are not required to pay contributions.
– Residents of the Republic of Serbia are subject to income tax based on the income they earn in Serbia and abroad, which is a solution that applies in most modern countries – they explain in the Ministry of Finance.
Photo by M. Anđela
– Consequently, wages earned by residents of Serbia on the basis of work with foreign employers abroad are taxed in Serbia. Regardless of whether Serbia applies a double taxation agreement with the country in which our resident is employed by a foreign employer, our resident is entitled to a tax credit based on the tax paid on the earnings he obtained, as long as said credit is not it may be higher than the tax that would be paid on such income in the Republic of Serbia.
When it comes to double taxation agreements, there are two models. Those signed in recent years generally provide for a tax credit, a solution also in our law, while some older ones guarantee an exemption.
– There are also agreements to avoid double taxation in which the application of the exemption method is contemplated – indicated in the Ministry of Finance.
– According to these agreements, our residents are not required to pay income tax in Serbia on the basis of wages earned by foreign employers in the countries with which such agreements have been concluded.
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