Republic of Serbia Ministry of Finance Tax Administration

1. Republic of Serbia Ministry of Finance Tax Administration Belgrade April 2011

2. TAXATION OF SMALL AND MEDIUM-SIZED ENTERPRISES RadaKostic, Assistant Director of Serbian Tax Administration

3. Tax Administration Function The Serbian Tax Administration is responsible for: assessment, oversight and collection of public revenues, and in particular: tax (CIT, PIT, excise tax, VATand other)and contributions (pension insurance, health insurance and unemployment insurance).

4. Tax Return Filing Serbian Tax Administration has electronic communication only with large taxpayers, who are dealt with by the Large Taxpayers Office. Therefore, operations such as filing of tax returns and recording of payments are conducted electronically. Other taxpayers submit paper tax returns and such returns are taken to the files manually.

5. Self-employed Persons The rate of income tax imposed on the self-employed persons is 10% of taxable income as determined in the tax statement by adjusting the income reported in the P&L according to the IAS and the accounting and audit laws.

6. Small and Medium-sized Enterprises The CIT rate is proportional and uniform, and is set at 10% of taxable income as determined in the tax statement by adjusting the income reported in the P&L according to the IAS and the accounting and audit laws.

7. VAT Registration and Removal from the Register Every taxpayer whose total income has exceeded RSD 4,000,000 in the past 12 months must register for VAT. A taxpayer starting a new business who estimates that the total income in the 12 months following the start of operation will exceed RSD 4,000,000 may also register for VAT. Every taxpayer whose total income has not exceeded RSD 2,000,000 in the past calendar year is removed from the VAT register, ex officio.

8. Tax Rates General VAT rate is 18 %. Special VAT rate is 8%. For each tax period, taxpayers pay a VAT which is equal to the positive difference between the total amount of tax liability and the amount of input tax, within the time scale for filing of tax returns.

9. Tax Period and VAT Refund Period For taxpayers whose total income has exceeded RSD 20,000,000 in the past 12 months,the tax period is one month. For taxpayers whose total income has not exceeded RSD 20,000,000,the tax period is one calendar quarter. For taxpayers who are predominantly exporters (i.e. for taxpayers whose exports have exceeded EUR 10,000,000 or 70% of the total turnover in a previous calendar year, VAT is refunded within 15 days upon the expiry of a time limit for filing tax returns. For other taxpayers, VAT is refunded within 45 days.

10. Collection of Due Tax Liabilities in 2010 Tax liabilities in 2010 totalled to RSD 994.9 billion. Of total tax liabilities: RSD 822.9 billion was collected when due (82.7%) RSD 30.9 billion was collected after due date (3.1%) RSD 141.1 billion was not collected (14.2%)

11. Collection Structure Share of certain taxpayer groups in the total revenues: Large taxpayers (Large Taxpayers Office) 40% Self-employed persons 5% Individuals 2% Small and medium-sized enterprises 53%

12. Corporate Strategy The Serbian Tax Administration has passed a Corporate Strategy envisaging a new Serbian Tax Administration, including the following: New organization chart of the Tax Administration, Full electronic communication with all taxpayers –large, medium-sized and small, and self-employed persons; Introducing of new information technologies; Strengthening of the contact centre as a service to taxpayers; Staff education; Taxpayer education; Strategy for tax collection and reduction of tax debt is being prepared; Taxpayer Oversight Strategy is being prepared.

13. THANK YOU