Citizens of the Republic of Serbia who earned a total annual income exceeding RSD 4,874,508 in 2024 are subject to the annual personal income tax for that year (commonly referred to as the “extra income tax”).

Individuals whose total income in 2024 is below this threshold have no tax liability under this provision.

Who is required to pay this tax?

This tax is payable by:

• Residents of the Republic of Serbia, on income earned both in Serbia and abroad, and

• Non-residents, on income earned within the territory of Serbia.

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Which income types are included in the taxable amount?

The following types of income realized during 2024 are included in the taxable base:

1. Salaries, as defined in Articles 13 to 15b of the Law on Personal Income Tax

2. Taxable income from self-employment, as per Article 33(2) and Article 40

3. Taxable income from copyrights, related rights, and industrial property rights, as per Articles 55 and 60

4. Taxable income from real estate, as per Article 65v

5. Taxable income from leasing movable property, under Article 82(3) and (4)

6. Taxable income of athletes and sports professionals, under Article 84a
   6a. Taxable income from hospitality services, under Article 84b

7. Other taxable income, under Article 85

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Special Notes on Income Inclusion

• Salaries and taxable income of lump-sum taxed entrepreneurs, as well as income under items 3, 6, and 7, are reduced by taxes and social security contributions paid on those incomes (borne by the recipient).

• Net income of entrepreneurs keeping books is reduced by the income tax paid.

• For entrepreneurs who opted for a deemed salary, the salary is reduced by the corresponding taxes and social contributions paid.

Dividends (profit shares) received by shareholders are not included in the taxable income base for annual income tax purposes.

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Do lump-sum entrepreneurs (“paušalci”) pay the annual income tax?

Yes, but only under certain conditions:

• The lump-sum income amount determined by the Tax Administration is included in the total annual income.

• If an entrepreneur earns only lump-sum income, they are unlikely to exceed the annual income tax threshold.

• However, if the entrepreneur also earns additional income (from employment, property rental, etc.), they may become liable for this tax.

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How is the taxable base calculated?

The individual must aggregate all net income (e.g., salary, self-employment income, contract work, rental income) as prescribed by law.
From this total, the non-taxable amount of RSD 4,874,508 is subtracted.

The remaining amount is subject to progressive taxation:

• 10% tax on the amount up to RSD 9,749,016

• 15% tax on the amount exceeding RSD 9,749,016

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Personal deductions

Taxpayers may reduce their liability through personal deductions, as follows:

• RSD 649,934 for the taxpayer

• RSD 243,725 for each dependent family member

The total deductions may not exceed 50% of the taxable income.

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Tax relief for persons under the age of 40

Since 2022, individuals who are under 40 years of age on December 31, 2024 are entitled to an additional deduction equal to three average annual salaries in Serbia for 2024 (RSD 4,874,508).
This relief applies only to:

• Salaries

• Income from self-employment

• Copyright and related rights

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Tax credit for investments in alternative investment funds

Taxpayers who invest in alternative investment funds (AIFs) are eligible for a tax credit of up to 50% of the investment amount made during the calendar year for which the tax is assessed.

The credit is granted only for fully paid cash contributions used to acquire shares or units in AIFs.

If the investment is sold within 3 years, the taxpayer loses the right to the credit and must:

• Notify the Tax Administration within 30 days

• Pay the previously saved tax, including statutory interest

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Deadlines for filing and payment

The tax assessment process has changed significantly since 2022.

• Prior to 2022, taxpayers were required to electronically file Form PPDG-2R via the ePorezi portal by May 16 each year.

• From the 2022 tax year onward, the Tax Administration prepares the tax return, based on official data, and posts it on ePorezi by April 1.

The taxpayer must:

• Review the return

• Make any necessary corrections

• Submit the finalized return and make payment by May 15

No official tax assessment decision (“rešenje”) will be issued. The return and payment are self-executed.

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Required documentation

To submit the return personally, the taxpayer must have:

• A qualified electronic certificate

• PPP-PO forms showing income earned in 2024

• Personal documents of dependent family members (if claiming deductions)

Alternatively, a certified accountant may prepare and submit the return, using either:

• The taxpayer’s electronic certificate, or

• An authorized power of attorney for using ePorezi services