Changes of tax legislation came into effect on January 1st 2021

On January 1st 2021, the Law on Personal Income Tax (Official Gazette of the RS, No. 153/2020), the Law on Corporate Income Tax (Official Gazette of the RS, No. 153/2020) and the Law on Value Added Tax (“Official Gazette of RS”, No. 153/2020) came into effect having been adopted by the National Assembly of the Republic of Serbia at the session held on December 17th 2020.
On the one hand, the Law on Corporate Income Tax and the Law on Personal Income Tax have been amended in order to adapt and harmonize with new regulations related to digital assets and alternative investment funds.
The amendments to the Law on Corporate Income Tax have expanded the definition of capital gain, so that it now implies the realization of capital gain and the sale of a unit of closed-end investment funds, as well as the sale of digital assets.
Income earned by a non-resident legal entity on the basis of membership in an alternative investment fund which does not have the status of a legal entity is considered a dividend, so income tax will be calculated and deducted at a rate of 20% (unless stipulated otherwise by the double taxation agreement).
Tax relief is provided in case of investment of capital gains obtained from the sale of digital assets. Namely, capital gains arising from the sale of digital assets are not included in the tax base, if the funds from that sale were invested in that tax period in the share capital of a resident taxpayer, i.e. investment fund whose business core or investment activities are in the Republic of Serbia.
On the other hand, the Law on Value Added Tax focuses on issues related to: determining the tax debtor in construction, new tax exemptions, issuing electronic invoices, trade in second-hand goods and registration in the VAT system.
Amendments to the Law on Value Added Tax introduced the tax debtor for the supply of goods and services in the field of construction as the recipient of goods and services if the value of the turnover exceeds RSD 500,000. For turnover of goods and services below RSD 500,000, VAT will be calculated and reported by the VAT payer who performs the turnover.
The amendments to the law introduce tax exemption without the right to deduct the previous tax for the transfer of virtual currencies and the exchange of virtual currencies for cash in accordance with the Law on Digital Property.
With regard to registration in the VAT system, the law stipulates that a taxpayer who fails to file a registration return within the prescribed period may file a return after the deadline, but also that the tax authority will file the return ex officio. The taxpayer has the right to deduct the previous tax from the day of submitting the registration return.
Finally, following the changes in regulations in the field of investment funds, the law stipulates that an open-end investment fund, i.e. an alternative investment fund, which does not have the status of a legal entity, and is entered in the appropriate register, is also considered a VAT payer.