Overview
The Ministry of Finance opened public consultations on several drafts of tax laws.
The amendments mainly propose to abandon various tax incentives provided in (i) Law on Corporate Income Tax, (ii) Law on Personal Income Tax and (iii) Law on Mandatory Social Security Contributions, with the changes expected to take effect as of 1 January 2027.
Another part of the draft legislation is intended to further align Serbia’s tax framework with EU tax legislation as part of the country’s accession process. The package introduces three new tax laws and harmonises three existing laws with EU requirements. In addition to the package of draft laws aimed at harmonisation with EU legislation.
Public consultations will last until 21 June 2026.
Proposed amendments to the existing legislation
Corporate Income Tax Law
One of the most significant proposed changes, effective from 1 January 2027, is the abolition of a tax incentive related to investment into fixed assets and employment of new employees. As a quick reminder, the incentive was designed to encourage large-scale investments by granting a ten-year corporate income tax exemption to taxpayers that invest, or receive investments, exceeding RSD 1 billion (approximately EUR 8.5 million) in fixed assets in Serbia and create at least 100 new jobs under indefinite-term employment contracts.
By exception, taxpayers who started to apply the incentive by 31 December 2026 and reported the relevant data in their 2026 tax balance sheet and corporate income tax return may continue to apply the tax incentive by the expiration of the ten-year period.
Other proposed amendments, applicable as of 1 January 2027, are set to revoke the tax incentive for the grantor of the concession, capital gains tax incentive for the concessionaire, tax exemption for enterprises engaged in vocational training, professional rehabilitation and employment of persons with disabilities and tax credit for investments in Serbian companies engaged in innovative activities.
Besides the proposed changes to tax incentives, other provisions included in the amendments and supplements will become applicable upon Serbia’s accession to the EU.
Personal Income Tax and Mandatory Social Security Insurance Laws
Effective as of 1 January 2027, the amendments would revoke the personal income tax and social security contribution incentives regarding the employment of newly hired individuals, employment of persons with disabilities, and employment of newly hired individuals by micro and small legal entities and entrepreneurs.
Under the amendments, employers that qualified for the incentive for employing persons with disabilities before the amendments enter into force may continue to claim the relief until the end of the prescribed three-year incentive period.
Introduced EU harmonised tax laws
- Draft Law on Excise Duties;
- Draft Personal Income Tax Law;
- Draft Law on Administrative Cooperation in the Field of Taxation;
- Draft Law on Tax Dispute Resolution Mechanisms in the European Union;
- Draft Law on Global Minimum Corporate Income Tax.
All changes should be applicable upon the accession of Serbia to the EU.
Note: The drafts are currently under public consultation and may be subject to further amendments and supplements.
FAQ
What tax incentives are being abolished as of 1 January 2027?
The following incentives will no longer be available to new applicants: the ten-year CIT exemption for investments exceeding RSD 1 billion in fixed assets with 100+ new hires; capital gains tax relief for concessionaires; CIT exemption for vocational training and disability employment enterprises; tax credit for investments in innovative companies; and PIT and social security contribution reliefs for newly hired employees, persons with disabilities, and new hires by micro and small entities.
Can companies already using these incentives continue to do so?
Yes, with limitations. Companies that activated the RSD 1 billion investment incentive by 31 December 2026 and reported it in their 2026 tax return may continue using it for the remainder of their ten-year period.
What should companies do before the end of 2026?
Companies considering large-scale investments or new hiring programs that would qualify under the current incentives should assess whether activating these incentives before 31 December 2026 is feasible and advantageous.
What new laws are being introduced and when do they apply?
Five laws are being introduced or harmonised with EU standards, including a Global Minimum Corporate Income Tax law and revised excise and personal income tax legislation. These will apply upon Serbia’s EU accession; no fixed date has been set.
How can we provide input on the proposed changes?
Public consultations are open until 21 June 2026. Submissions can be directed to the Ministry of Finance through the official consultation process.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.
