As of 13 June 2025, the Regulation on the Criteria for Granting Incentives to Employers Hiring Newly-Resident Individuals (“Official Gazette of the Republic of Serbia”, no. 49/2025) ceased to apply, thereby abolishing the previous subsidy scheme in this area.
Under the previous rules, employers were entitled to significant benefits – a refund of 70% of payroll tax and 100% of pension and disability insurance contributions, for a period of up to five years. These measures were primarily aimed at attracting qualified professionals from abroad and returnees with specific expertise.
The stated reason for the abolition was a sharp increase in the number of beneficiaries and employer applications, which made it difficult to plan budget funds for the coming fiscal years.
It is important to emphasize that, although entitlement to the refund of tax and contributions no longer exists, employers can still use the tax reliefs provided by the Personal Income Tax Law (“Official Gazette of the RS”, no. 24/2001…19/2025). Specifically, the taxable base for salary tax may still be reduced by 70% for newly-resident taxpayers, provided that the individual has not predominantly resided in Serbia during the previous two years or was abroad for education or professional training.
This tax relief applies for a period of five years from the date of signing the employment contract and remains in force unchanged.
The cessation of the Regulation particularly affects employers who planned to hire personnel with high net salaries, given that a significant part of the incentives is no longer available.
For any questions regarding the application of current reliefs and assessment of the legal and financial implications for your business, the Injac Attorneys team remains at your disposal.
The information provided in this document does not constitute legal advice on any specific matter and is provided for general informational purposes only.
