The Regulation prescribes criteria for awarding incentives to employers who employ new residents in the Republic of Serbia for whom there is a need that cannot be efficiently fulfilled in the domestic labour market.
By virtue of the Regulation, the employer is a domestic or foreign natural person or legal entity, or an entrepreneur registered for performing its business activity in the Republic of Serbia, as well as a branch or a representative office of a foreign employer registered in the Republic of Serbia, while the new resident (for whom there is a need that cannot be efficiently fulfilled in the domestic labour market) is a natural person who did not stay in the territory of the Republic of Serbia for more than 180 days during 24 months prior to the conclusion of the employment agreement, and which established a full-time employment with the employer for indefinite time, with the base salary amounting to at least RSD 300.000,00 per month.
Conditions for awarding incentives
The right to incentives shall be enjoyed by the employer whose number of full-time employees engaged for indefinite time on the day of filing the application for incentives is equal or larger than the number of full-time employees engaged for indefinite time on the day of entry into force of the Regulation, increased by the number of employed new residents included in the application. This right shall be exercised at most for the number of employed new residents which, together with the number of full-time employees engaged for indefinite time who cannot be considered employed new residents on the day of filing the application, is higher than the number of full-time employees engaged for indefinite time on the day of entry into force of the Regulation.
The right to incentives for employed new resident shall be exercised provided that the new resident is continuously employed with the employer for the period between the day of filing the application and December 31 of the year in which the application was filed, whereby this right shall only be exercised for new residents employed up and until December 31, 2023.
Additionally, the Regulation prescribes special requirements regarding the employers registered for performing their business activity in the Republic of Serbia following the entry into force of the Regulation, as well as with respect to applications filed starting from 2024.
However, the right to incentives shall not be granted to the employer who:
1) in the period from the submission of the initial application and up and until the end of the calendar year in which the final incentives payment is received, pays dividend or acquired profit, except for dividend/profit paid from the part out of the part of the profit that is higher than the amount received on behalf of incentives;
2) is a state aid beneficiary in relation to which it is obliged to employ, except for the subjects who already fulfilled such obligation until July 1, 2022; and
3) uses or used the right to reduce the base for the employed new resident with respect to whom it exercises the incentives under the Regulation, in accordance with Article 15v of the Law on Personal Income Tax and Article 15a of the Law on Contributions for Mandatory Social Insurance.
Incentives
Incentives are paid in the amount of 70% of the calculated and paid income tax for one or several employed new residents, in terms of the regulations on personal income tax, and 100% of the calculated and paid contributions for mandatory pension and disability insurance, in terms of the regulations governing the mandatory social insurance, for the payments made with respect to the employed new resident in the period of maximum 60 months, starting from July 1, 2022 until December 31, 2028.
Registration
In order to exercise the right to incentives, the employer is obliged to apply to the Ministry of Economy once a year, i.e., up to eight times at most, in the period from September 15 and September 30, for the payment of incentives referring to the salaries of new residents paid from July 1, 2022 to December 31, 2028, whereby each application is filed for the salaries paid in the period preceding the submission of the application for a maximum of 12 months. The application is filed on a form which is given as an integral part of the Regulation.
Provision of temporary protection to persons displaced from Ukraine
In the context of current situation, according to the Decision on Provision of Temporary Protection in the Republic of Serbia for Displaced Persons from Ukraine (Official Gazette of the RS no. 36/2022), which was enacted by the Government of the Republic of Serbia and which has been in force since March 19, 2022 (until 19 March 2023) (“the Decision”), temporary protection in the Republic of Serbia is granted to displaced persons from Ukraine, i.e., to the persons who were forced to leave Ukraine as their country of origin or residence, or were evacuated in Ukraine and may not return to permanent and safe living conditions due to the current situation in that country.
Displaced persons, in terms of the Decision, are:
1) citizens of Ukraine and members of their families who stayed in Ukraine;
2) asylum-seekers, persons without citizenship and foreign citizens, who were granted asylum in Ukraine or equivalent national protection and members of their families who were granted residence in Ukraine; and
3) foreign citizens who were granted permanent or temporary residence in Ukraine and who cannot return to their country of origin under permanent and long-lasting circumstances.
The temporary protection is also granted to the citizens of Ukraine and members of their families who legally stayed in the Republic of Serbia at the time of adoption of the Decision, but whose right to stay expired before the cancellation of the decision on temporary protection, whereby the family members are considered family members as defined by the Law on Asylum and Temporary Protection (Official Gazette of the RS no. 24/2018) (“the Law”).
The Decision further stipulates that the Ministry of Interior shall, according to the provisions of the Law, register the persons granted temporary protection, i.e., for each such person individually pass a decision on granting temporary protection, while the persons granted temporary protection shall be entitled to all rights under Article 76 of the Law, the enforcement whereof shall be ensured by the relevant authorities. The person granted temporary protection shall be entitled to:
1) residence for the period of validity of the temporary protection;
2) document proving their status and right to the residence;
3) health protection (pursuant to the regulations on health protection of foreign citizens);
4) access to the labour market (in accordance with the regulations on employment of foreign citizens);
5) free elementary and secondary education in public schools (according to the special regulations);
6) legal aid under the terms prescribed with respect to the asylum-seekers;
7) freedom of religion (under the same conditions as the citizens of the Republic of Serbia);
8) collective accommodation in facilities designated for such purposes;
9) relevant accommodation in cases of persons that require special acceptance guarantees (in accordance with Article 17 of the Law); and
10) right to claim the asylum.
As previously mentioned, the temporary protection lasts for one year from the date of entry into force of the Decision.