Tax Incentives on Reimbursement of Engaged Individuals

JPM Partner Nikola Djordjevic and Associate Stasa Kneselac examine the tax incentives available to companies hiring new employees in Serbia. They explain the differences between salary tax and tax on other income for contracted workers.

The article underscores the importance for employers, especially new market entrants, to understand Serbia’s complex web of tax incentives in order to optimally organize their resources and capitalize on relief opportunities.

The article provides an in-depth analysis of the various tax reliefs offered by the Serbian government to encourage companies to bring on more permanent employees. These include partial relief for hiring new staff and employees with disabilities, as well as those in research and development roles.

The authors do the math to demonstrate the potential tax savings for companies of different sizes hiring different numbers of new employees. They note ambiguities in certain incentive criteria and offer suggestions to make the system more incremental and streamlined.

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