New incentives for employers

The Republic of Serbia has introduced additional incentives when it comes to employers. Namely, in addition to the previous incentives that we wrote about here, incentives have been introduced that concern employers who employ newly settled individuals.

On 16 June 2022 a Decree on the Criteria for Granting Incentives to the Employers who employ newly settled individuals in the Republic of Serbia is adopted and entered into force on 18 June 2022.

The new incentive includes the possibility of refunding 70% of the calculated and paid salary tax and 100% of the calculated and paid pension and disability social contribution.

A newly settled person is a person for whom there is a need that cannot be easily satisfied on the domestic labor market and who has not resided in the territory of the Republic of Serbia in the period of 24 months, preceding the day of concluding the employment agreement with the employer more than 180 days and with whom the employer concluded a full-time permanent employment agreement and has an agreed monthly basic salary in accordance with the regulation regulating work of at least RSD 300,000.00 .

Incentives will be refunded in the amount of 70% of the calculated and paid income tax for one or more employed newly settled persons and 100% of the calculated and paid contributions for mandatory pension and disability insurance, for payments made for an employed newly settled person in a period of no more than 60 months, starting from 1 July 2022 and ending on 31 December 2028.

To apply for incentive the following conditions must be met:

1) in the period from the submission of the first application and ending with the end of the calendar year in which he received the last incentive payment, the employer should not pay out the dividends, except for dividends that are paid out of the part of profit higher than the refunded amount;

2) Employer is not a beneficiary of state assistance in connection with which he has an obligation to employ individuals, except for obligees who have already fulfilled this obligation as of 1 July 2022;

3) Employer does not use the other tax incentive for newly settled person;

4) Newly settled individuals must remain employed with employer in the period between the day application for refund is submitted and 31 December of the year the application is submitted.

This is another incentive introduced by the Republic of Serbia in order to equalize market conditions and enable different categories of workers to be employed.