"Significant incentives for beginners in business"

"Significant incentives for beginners in business"

In this way, the government will continue to work on creating a dynamic and competitive economy by further strengthening and developing the sector of small and medium-sized enterprises, it announce on its website.

The introduction of incentives for beginners in business is a key novelty and one of the most important measures of the National Program for the Suppression of the Gray Economy.

It refers to persons who have completed high school, faculty, or, as unemployed, are for over a period of more than six months on the records of the National Employment Service.

By adopting amendments to the Law on Personal Income Tax and the Law on Contributions for Obligatory Social Insurance, those who start performing their own activities will receive additional incentives because they will be exempted from payroll taxes and contributions for compulsory social security in the year of establishment of the company in the next year.

According to a decision made by a working group of the Ministry of Finance, the Tax Administration and NALED, this novelty refers to the earnings of the founder of an entrepreneurial activity and earning up to nine newly employed persons.

The implementation of the measure starts in October 2018 and is valid for entrepreneurs in the regime of paying personal earnings.

An analysis of the tax and non-tax burden of beginners in the business, carried out by NALED, shows that the savings that will be made on this basis by entrepreneurs go up to RSD 250,000 per per person when paying the minimum wage.

In the continuation of the fight to reduce unemployment, the recruitment allowance of new workers will remain in effect until the end of 2019, by making entrepreneurs entitled to the return of paid taxes and contributions from 65% to 75%.

The Law amending the Law on Payment Terms for Settlement of Financial Obligations in Commercial Transactions has been adopted, which will enable greater financial discipline, transparency and more successful planning and management of liquid assets, both in business entities and in the public sector.

In order to further offset the business by amending the Law on Income Tax, it was specified that the non-taxable part of the salaries of employees instead of the current RSD 11,790 from 1 January 2018 will be increased by more than RSD 3,000 to RSD 15,000.

The biggest effect of this change will be reflected in about 350,000 workers in Serbia who receive minimum wages.

This tax relief will bring about progressive taxation and will relieve the economy of about RSD 11.6 billion.

In this way, the government of Serbia creates space for new employment in the private sector, with the intention of being the true engine for the development of the Serbian economy.