Freelancers recently reached an agreement with the state regarding the tax treatment of their earnings. While some point out that they won, others do not share this opinion. In any case, after more than six months of protests by freelancers, an agreement was reached with the Government.
On the other hand, not very similar, but equally interesting, Serbian citizens on temporary work abroad (so-called “gastarbajteri”) open several questions from the tax aspect. We will go through their treatment depending on the country in which they are temporarily working.
States: Belgium, United Kingdom of Great Britain and Northern Ireland, Italy, Cyprus, Germany, France, the Netherlands, Sweden and Sri Lanka
According to the treaties on avoidance of double taxation between Serbia and the above-mentioned countries, Serbian citizens who are tax residents of the Republic of Serbia on the income earned from employment in these countries do not have the obligation to pay taxes in the Republic of Serbia.
If Serbian citizens temporarily working abroad are tax residents of the above-mentioned countries, those countries have the exclusive right to tax them.
States: Azerbaijan, Albania, Austria, Belarus, Bosnia and Herzegovina, Bulgaria, Vietnam, Georgia, Greece, Denmark, Egypt, Estonia, Israel, India, Indonesia, Iran, Ireland, Armenia, Kazakhstan, Canada, Qatar, China, Korea (DPRK), Korea (ROK), Kuwait, Latvia, Libya, Lithuania, Luxembourg, Hungary, Macedonia, Malta, Moldova, Norway, Pakistan, Poland, Romania, Russian Federation, San Marino, Slovakia, Slovenia, Tunisia, Turkey, United Arab Emirates, Ukraine, Finland, Croatia, Montenegro, Czech Republic, Switzerland and Spain
Citizens of the Republic of Serbia on temporary work in the above countries, who are tax residents of the Republic of Serbia, on the salary earned from employment in those countries, in the Republic of Serbia have the obligation to pay payroll tax only if the payroll tax paid in these countries is lower than the payroll tax in the Republic of Serbia. In that case, in the Republic of Serbia, the tax is paid at a tax rate equal to the difference between the Serbian and the tax in that foreign country.
If our citizens on temporary work abroad are tax residents of the above-mentioned countries (Section II), the said countries have the exclusive right to tax them.
This rule also applies to other countries with which Serbia has not concluded a treaty on avoiding double taxation.
In addition, our citizens on temporary work in the above-mentioned countries (Section II) are not obliged to pay contributions for compulsory social insurance in the Republic of Serbia on the earnings they earn on the basis of employment in those countries.