Category: Serbia

At the end of last year, the Ministry of Finance announced the improvement of the Electronic Invoicing System (known as SEF), which will consist of various modules. Certainly, the most significant module will still be the E-Invoice, which has already been in use by business entities since January 1, 2023. Along with it, new modules such as the E-Delivery note, E-Excise, and E-Customs will also be integrated.

Following the announcement of the new system, as a result of the work of the Working Group within the Ministry of Finance, the Draft Law on Electronic Delivery Notes (“Draft Law“) was prepared, for which a public consultation is being conducted.

Below, we discuss the innovations that the adoption of the Draft Law would bring, as well as the potential benefits of its application to everyday commercial relations.

Law on Trade 

Although no regulation explicitly defines the term “delivery note,” it is undoubtedly a type of document of goods.

The provision of Article 29 of the Law on Trade (“Law“) defines the term “document of goods,” which implies documents related to the production, procurement, and sale of goods.

In addition, the Law stipulates that goods in transit must be accompanied by documents directly related to their transportation, as well as the mandatory content of these documents.

It is important to note that the mentioned documents may be in their original form or as copies, and they may also take the form of electronic documents.

What novelties would the Law on Electronic Delivery Notes bring

Considering that the E-Delivery note system will be an integral part of the new, integrated system alongside the existing E-Invoice system, the Draft Law has been drafted based on the Law on Electronic Invoicing. Moreover, some issues are regulated in the same way and adapted to the new E-Delivery note system.

• According to the Draft Law, the term electronic delivery note (“E-Delivery note“) refers to a document that accompanies goods being sent for the purpose of recording the movement of goods and is transmitted and received via a system in a structured format that allows for fully automated electronic data processing. Additionally, the law specifies the basic elements and content of the E-Delivery note.
• Furthermore, the law defines the term electronic receipt (“E-Receipt“) as a document on the qualitative and quantitative acceptance of goods, which is created based on the received electronic delivery note.

Who is obligated to send the E-Delivery note?

The obligation to send the E-Delivery note applies to both private and public sector entities for every movement of goods over which they have disposal rights. Depending on the circumstances, either entity may serve as the sender or recipient of the E-Delivery note.

In accordance with this obligation, entities are also required to use the system through which the sending, receiving, recording, processing, and storage of E-Delivery note and E-Receipts are carried out.

When is there no obligation to send an E-Delivery note?

Exceptions to the above include cases where there is no obligation to send an E-Delivery note for the movement of goods:

• which are delivered through transmission, transport, and distribution networks, including particularly water, electricity, natural gas, heating, cooling, and similar services;
• which are considered retail sales in accordance with the law regulating fiscalization;
• in the context of fulfilling contractual obligations directed towards users of funds from international framework agreements;
• in the context of procurement, modernization, and repair of military and/or security-sensitive goods, as well as related movements of goods;;
• which involves relocation from one place to another within a single public sector entity.

Procedure with the e-Delivery Note

• The sender is obligated to send the E-Delivery note no later than before the start of the movement of goods;
• The carrier must retrieve the E-Delivery note through the system for presentation during inspection supervision;
• The recipient of the E-Delivery note must confirm the physical receipt of the goods on the day of receipt or no later than two working days after the start of receiving the goods;
• The E-Delivery note for which physical receipt confirmation has not been made will expire three working days after the start of the movement of goods;
• The E-Delivery note is considered received at the moment it is sent to the recipient. The sender also has the option to cancel the sent E-Delivery note, providing a reason for such action;
• The recipient of the E-Delivery note then checks the received E-Delivery note and either accept or reject it, in whole or in part, within 8 days from the date of receipt, by sending an E-Receipt;
• If a private sector entity does not send the E-Receipt within the prescribed period, it will be considered as having rejected the delivery note in its entirety, whereas if a public sector entity does not send it, it will be considered as having accepted it in full;
• If the recipient partially accepts or partially rejects the E-Delivery note, the sender may agree to this within 30 days from the receipt of the receipt, otherwise, it will be considered as having fully rejected the E-Receipt.

Other matters concerning inspection supervision, voluntary users, central information intermediaries, as well as data protection and the storage of E-Delivery notes, are regulated in a similar or identical manner as in the Law on Electronic Invoicing.

Penalty provisions

In case of non-compliance with legal provisions, that is failure to adhere to prescribed obligations, the legislator provides for monetary fines ranging from 200,000 to 2,000,000 dinars.

Commencement of application

The obligation for a private sector entity to receive an E-Delivery note in the case of goods movement, as well as the obligation to send an E-Delivery note when both the sender and recipient are private sector entities, and the obligation for the carrier to present the E-Delivery note sent during goods movements for inspection supervision, according to the Draft Law, would apply from October 1, 2027.

Regarding the obligations for public sector entities to receive, send, and present the E-Delivery note, as well as the obligations for private sector entities dealing with goods that are excise products to receive on any basis, send, and present the E-Delivery note, and the obligations for private sector entities to send, receive, and present the E-Delivery note in business relationships with public sector entities, according to the Draft Law, would apply from January 1, 2026.

The adoption of the law could occur by the end of 2024, and it remains to be seen whether the Draft Law will be amended and/or supplemented during the parliamentary debate.

This article is for informational purposes only and does not constitute legal advice. If you need further information, feel free to contact us.

By Minja Mucic, Junior Associate, PR Legal

NKO Partners has advised Igepa Cartacell and Deus System on their merger. The new entity will operate under the name Igepa Deus.

Igepa Cartacell and Deus System are paper distribution companies.

According to NKO Partners, “this merger not only strengthens the companies’ market position but also enhances their ability to serve clients across the region with a broader range of products and services and makes a new chapter in the paper merchant business landscape.”

The NKO Partners team included Partners Djordje Nikolic, Branko Jankovic, and Djuro Otasevic and Senior Associate Benjamin Graca.

The Social and Economic Council of the Republic of Serbia passed the Decision on the amount of the minimum salary for the year 2025. The Decision was published in the Official Gazette of the Republic of Serbia No. 74/2024 on September 4, 2024.

Unlike previous years, when the Government made decisions on the minimum wage due to the inability of social partners to reach an agreement, this time the decision was made by the tripartite council, in accordance with the Labor Law.

According to the Labor Law, the minimum salary is determined by a decision of the Social and Economic Council, taking into account, in particular, the existential and social needs of employees and their families as reflected through the value of the minimum consumer basket, employment trends in the labor market, the growth rate of Gross Domestic Product, consumer price trends, productivity changes, and average wage trends in the Republic of Serbia.

The minimum salary is set per working hour, excluding taxes and contributions, for the calendar year, and must be determined by September 15 of the current year at the latest. It is effective from January 1 of the following year.

Net Amount of the Minimum Salary for 2025

The Decision establishes that the minimum salary, excluding taxes and mandatory social security contributions, for the period from January to December 2025, is set at 308 dinars net per working hour. This represents an increase of 13.7% compared to this year’s minimum salary of 271 dinars.

For all payments of the minimum salary up to December 31, 2024, the minimum wage rate established for 2024, which is 271 dinars net per working hour, will apply. For payments made from January 1, 2025, the minimum wage rate of 308 dinars net per working hour will be applicable.

The total monthly amount of the minimum salary will vary throughout the year depending on the number of working hours in the month:

• For a month with 160 working hours (February and November) – 49,280.00 dinars;
• For a month with 168 working hours (March, June, and August) – 51,744.00 dinars;
• For a month with 176 working hours (April, May, and September) – 54,208.00 dinars;
• For a month with 184 working hours (January, July, October, and December) – 56,672.00 dinars.

Gross Amount of the Minimum Salary for 2025

The gross amount of the minimum salary for 2024 depends on the non-taxable portion of the salary, as defined by the Personal Income Tax Law, as well as the rates at which income tax and contributions for mandatory social security are calculated for the employee.

In this regard, it has been announced that starting from January 1, 2025, the non-taxable portion of the salary will be increased by the same percentage as the minimum salary, which is 13.7%. This means that the amount of 25,000 dinars will be raised to 28,423 dinars.

This article is to be considered as exclusively informative, with no intention to provide legal advice. If you should need additional information, please contact us directly.

By Anja Stanojevic, Junior Associate, PR Legal

AI is developing rapidly in Serbia and numerous initiatives are emerging daily. Therefore, a working group, which includes our Schoenherr expert Marija Vlajković, is already in the process of drafting a new Law on Artificial Intelligence. The final draft is expected by spring 2025.

Serbia is making significant strides in AI regulation, with preparations underway for a new AI development strategy for 2024–2030, followed by an action plan. This complements the existing Strategy for AI Development (2020–2025), which aligns with the European Commission’s AI policies. The public consultation phase for the new strategy has been completed, and upcoming amendments, voting and adoption are expected by the end of 2024 or early 2025. Both the current and upcoming strategies lay the foundation for the widespread application of AI in education, the economy, public sector services and other areas. The primary goal is to ensure the development and safe application of AI, while also achieving sustainable development objectives.

In 2023, Serbia introduced Ethical Guidelines for the Development, Application and Use of Responsible AI, aimed at preventing and mitigating risks and harm to human work potentially caused by AI technology, as well as preserving individual freedom of action and decision-making when interacting with AI. Although non-binding, these guidelines, along with the strategies, clearly indicate Serbia’s strong commitment to regulating AI.

Meanwhile, the Council for Artificial Intelligence has been established to coordinate activities for implementing the strategic framework, with its first meeting already held. In addition to its advisory role, the Council is tasked with defining and monitoring the implementation of the action plan in line with the AI Development Strategy, making amendments to that strategy, and working on the upcoming one. The Council will also oversee the drafting of the new AI Law.

Serbia’s AI ecosystem

Serbia ranks 57th out of 193 countries in the AI Readiness Index (Oxford Insights, 2023), making it a leading country in the field of AI within the Western Balkans. As a member of the Global Partnership on AI (GPAI), an initiative that aims to establish global standards and rules for AI development and accelerate AI progress worldwide, Serbia has joined global leaders like the US, UK and Israel in shaping AI governance. Over the next three years, Serbia will play a key role in GPAI, serving as first and third assistant chair in the first and third years, and main chair in the second year.

The National AI Platform, within the scope of the Data Centre, is a supercomputer designed to support AI-related tasks, providing the AI community in Serbia with easier access to advanced computing resources. Additionally, the Institute for AI Research and Development of Serbia plays a crucial role in advancing AI solutions, collaborating with both academia and industry to implement AI in sectors such as healthcare, manufacturing and public administration.

Serbia also hosts prominent AI-related events, such as the Data Science Conference (DSC), one of Europe’s largest conference in the domain of AI. Other major events, like Splet Tech, further highlight Serbia’s growing focus on AI, positioning the country as an emerging player in the global start-up scene.

Promoting AI development

Serbia fosters AI innovation through grants, tax incentives and start-up support. Companies involved in R&D benefit from salary tax exemptions and corporate tax incentives, making Serbia an attractive destination for AI-related investments.

Numerous public sector companies, educational institutions and local businesses are actively promoting AI by developing AI products, including state-of-the-art AI-powered hardware systems, as well as advancing AI applications through study programmes, conferences and corporate solutions. Early adopters are at the forefront, experimenting with AI, hosting free training sessions, and contributing to the ecosystem.

Future prospects

As a signatory to the Stabilisation and Association Agreement, Serbia has one of two key obligations: regulatory alignment with EU law. With some negotiation chapters already opened, the question remains whether Serbia’s new Law on AI will mirror the EU AI Act in the same manner as the Serbian Data Protection Act, which was modelled against the GDPR.

Serbia’s regulatory advancements, robust AI infrastructure and support for innovation point to a promising future for AI in the country. With the upcoming AI law and strategy, Serbia is well-positioned to solidify its role as a leader in AI within the region and beyond.

By Andrea Radonjanin and Marija Vlajkovic, Partners, and Andrej Zoric and Marija Lukic, Associates, Schoenherr

In the Official Gazette of the Republic of Serbia no. 71, dated August 16, 2024, a new Rulebook on Tax Exemption on Capital Gains Realized from the Transfer of Copyright, Related Rights, and Industrial Property Rights (“Rulebook“) was published.

This Rulebook more closely prescribes the conditions for exercising the right to tax exemption on capital gains realized from the transfer of copyright, related rights, as well as industrial property rights, which rights the taxpayer fully contributes as a non-monetary investment into the capital of a business entity that is a resident of the Republic of Serbia, as well as the loss of the right to tax exemption.

1. Law on Personal Income Tax

Capital gain

Law on Personal Income Tax (“Law”) defines capital gain, in terms of the transfer of copyrights and related rights and industrial property rights, as the difference between the selling price and the purchase price realized through the transfer of these rights.

The taxpayer of this tax is any natural person, including entrepreneurs, who has transferred the rights.

According that, if an natural person contributes intellectual property as a non-monetary investment into the capital of a legal entity, they acquire shares in that legal entity and, at the same time, realize a capital gain (or loss), which in fact represents the difference between the appraised value of the asset at the time of its contribution to the capital of the legal entity and the purchase value of the asset.

Tax exemption

The Law provides for a tax exemption on capital gains in the case of the full contribution of non-monetary investment, i.e., copyrights and related rights and industrial property rights, into the capital of a business entity resident in the Republic of Serbia.

The market value of these rights, for the purpose of contribution to the company’s capital, is determined by an appraisal conducted by a certified appraiser.

Also, the Law stipulates that the taxpayer is exempt from the determination of capital gains and losses if they have held the aforementioned rights in their assets continuously for at least 10 years. 

Loss of the right to tax exemption

In addition to the conditions for tax exemption, the Law stipulates that the transferor, the person who has obtained the right to tax exemption, loses that right if:

• The acquirer of copyrights and related rights and industrial property rights transfers such rights in its entirety within 2 years from the date of acquisition, or
• Within the same period (2 years), the right is transferred for use in whole or in part at a price lower than the price in accordance with the ‘Arm’s length’ principle, provided that the transfer is made to a related party or to a party whose owner is its related party.

In such case, the legislator requires the transferor, as the person who has obtained the right to tax exemption, to notify the competent tax authority of the loss of the right within 30 days.

2. Novelty of the Rulebook

• The Rulebook stipulates what constitutes copyright and related rights, as well as industrial property rights, in terms of exemption from capital gains tax.
• The Rulebook specifies what is considered an entry into the capital of a resident business entity, emphasizing that it concerns the contribution of non-monetary investment based on which the capital of the domestic company is increased.
• It also stipulates that the capital increase is expressed in terms of the monetary value of the contributed property rights, as assessed by an authorized appraiser, and not older than 12 months from the day before the non-monetary investment. The authorized appraiser can be a court expert in the economic-financial field or an auditor/audit firm.
• Regarding the procedure with the Tax Administration, in order to be exempted from tax, the taxpayer must submit a tax return and evidence for exemption from tax. If all prescribed conditions are met, the Tax Administration will issue a decision on tax exemption, or otherwise, a decision on the established capital gains tax.
• If the conditions for losing the right to tax exemption are met, the Rulebook prescribes the obligation of the domestic legal entity (asset acquirer) to notify the transferor about the asset transactions that lead to the loss of the right to tax exemption, within 8 days from the date of disposal. The taxpayer who has obtained the right to tax exemption has a legal obligation to notify the Tax Administration of the loss of this right, either upon receipt of the notification or no later than 30 days from the date of the right’s disposal.

This article is to be considered as exclusively informative, with no intention to provide legal advice. If you should need additional information, please contact us directly.

By Minja Mucic, Junior Associate, PR Legal

Serbia is quickly becoming a favored destination for foreign couples seeking marriage and new opportunities according to Stojkovic Attorneys Head of Labor and Immigration Mina Radojevic Vlacic.

Radojevic Vlacic begins by highlighting that there is a skyrocketing demand for marriage and immigration services in Serbia. “The surge is primarily driven by the current global immigration landscape,” she says. “Serbia has become a convenient destination because citizens of several countries. Notably Russians can enter Serbia visa-free for up to 30 days and Ukrainians can enter Serbia visa-free for up to 90 days. Many couples, especially those with one Serbian partner, find it advantageous to get married here,” she explains. “Once married, they can use their properly legalized Serbian marriage certificate in their home country.”

Radojevic Vlacic goes on to say that the process for these couples, while fairly straightforward, can still vary slightly depending on the couple’s circumstances. “Foreign couples need to verify their visa requirements first, which involves either entering Serbia on a tourist visa or in a visa-free regime. Once here, they need to register their stay with the competent police station and obtain a ‘white card,’ regardless if they’re staying in a hotel or in another accommodation (with a friend, AirBnB, etc.),” she shares. “Additionally, they need to provide legalized birth certificates and proof that they are not currently married. The specifics can vary based on their country of origin, but overall, the process is accessible.”

Specifically, according to Radojevic Vlacic, “marriage to a Serbian citizen can significantly streamline the immigration process. Foreign spouses are eligible for permanent residency and, eventually, citizenship. Moreover, they can work in Serbia without needing a separate work permit.” According to her, “it’s an appealing route for many as it eases the path to settling down and starting a life here.” However, there are also challenges, primarily involving “navigating visa requirements, especially if the initial entry was on a tourist visa. After that, they need to secure a Visa D before obtaining their temporary residence permit. The process involves physical presence in Serbia, as the individual must be present to provide fingerprints and pick up their ID card,” Radojevic Vlacic explains. “Depending on their country of origin and other factors, securing this permit can take anywhere from one to three years. However, once acquired, it opens many doors to living and working in Serbia.”

These changes to the overall immigration framework of Serbia have left a mark on lawyers’ practices as well, Radojevic Vlacic reports. “The recent changes have had a significant impact. Earlier this year, Serbia introduced a unified permit that combines work and residence permits into one, simplifying the entire process. Before this, obtaining separate permits was a lengthy and complicated procedure,” she explains. Now, foreign nationals can acquire a single permit that acts like a personal ID card, allowing them to live and work in Serbia. “This change has made Serbia much more attractive, especially for entrepreneurs and businesspeople seeking to relocate. The country offers lower taxes compared to the EU, and Belgrade, in particular, is becoming a sought-after hub for real estate, tech, and various service-oriented businesses.” 

As for the businesses being established, Radojevic Vlacic says that their office has seen quite a diverse range. “A significant portion of new businesses are in the tech sector, with many foreign nationals setting up as entrepreneurs or freelancers, particularly in programming and IT. Some are employed directly by Serbian companies, while others work remotely for clients abroad. Additionally, we’ve seen interest in hospitality, like coffee shops and restaurants, and more substantial investments in tourism and real estate, including large complexes in Serbia’s mountainous regions,” she says in conclusion.

Cvjeticanin & Partners has advised Tetra Pak Serbia on the development and implementation of the Eco Challenge award contest.

Tetra Pak Serbia is part of Tetra Pak, a Swedish multinational food packaging and processing company headquartered in Switzerland. According to Cvjeticanin & Partners, “the Eco Challenge contest underlines Tetra Pak’s commitment to sustainability and innovation.”

The Cvjeticanin & Partners team included Managing Partner Nenad Cvjeticanin, Senior Associate Milan Vulic, and Junior Associate Djordje Miljkovic.

In a crucial legal victory for the European Commission, the European Court of Justice (ECJ) has upheld the Commission’s decision that Apple must repay up to €13 billion in back taxes to Ireland. This ruling, issued in September 2024, reaffirms the Commission’s original 2016 judgment, marking a significant step in the European Union‘s effort to crack down on favorable tax arrangements for multinational corporations. 

The full ECJ statement can be accessed here.

Background: The legal battle, one of the highest-profile state aid cases in Europe, stems from a 2014 investigation into Apple’s tax deals with Ireland. The European Commission concluded that Ireland had granted the tech giant unlawful tax benefits over two decades, allowing Apple to substantially reduce its effective tax rate. In 2016, the Commission ordered Apple to repay €13 billion in unpaid taxes, asserting that the arrangement violated EU state aid rules, which prohibit unfair advantages that distort competition within the bloc.

Both Apple and the Irish government challenged the ruling, and in 2020, the EU General Court annulled the Commission’s decision, siding with Apple. However, following the Commission’s appeal, the ECJ has now overturned that verdict, reinstating the requirement for Apple to repay the substantial tax sum.

Implications: The ECJ’s judgment sends a strong signal to multinational corporations operating within the EU: favorable tax deals that could undermine fair competition will not be tolerated. This decision underscores the EU’s determination to enforce tax compliance and maintain a level playing field in the Single Market, particularly for powerful tech giants that have benefited from complex cross-border tax arrangements.

The ruling may also set an example for future cases, encouraging the European Commission in its ongoing efforts to challenge tax avoidance and state aid violations across member states. Businesses operating in the EU, especially those leveraging preferential tax regimes, will need to reassess their strategies and ensure that their arrangements comply with EU competition law.

For Ireland, the decision reignites a politically sensitive issue. While the government has stated it will begin the process of transferring the disputed funds from escrow, it remains steadfast in its position that Apple was not granted preferential treatment. The broader implications for Ireland’s tax policies—historically a cornerstone of its appeal to global corporations—are still unfolding, but the ruling could lead to increased scrutiny of similar tax arrangements.

At Gecić Law, our competition team is exceptionally equipped to guide multinational corporations through the complexities of state aid and competition law in the EU. With extensive expertise in Southeast Europe and beyond, we offer strategic legal solutions that ensure compliance with both local and EU regulations, positioning our clients to navigate this increasingly stringent regulatory environment with confidence.

By Veljko Milutinovic, Of Counsel, Gecic Law

Under which circumstances are controllers and processors not required to maintain records of personal data processing activities? The Personal Data Protection Law, modeled on the GDPR, sets out exceptions to the obligation for organizations with fewer than 250 employees to keep processing records. While this acknowledges the characteristics of small and medium-sized enterprises, ensuring they are not unnecessarily burdened with additional costs, the number of employees is not the sole criterion for exemption from the record-keeping obligation.

Organizations are still required to maintain records if they engage in processing activities that (a) pose a high risk to the rights and freedoms of data subjects, (b) are continuous rather than occasional, and/or (c) involve special categories of personal data or data related to criminal convictions and offenses. This is applicable even if the organization has fewer than 250 employees.
Considering that the management of employment relationships involves the continuous processing of employees’ personal data, any business entity with at least one employee is required to keep records of processing activities related to HR administration, regardless of the total number of employees. This requirement also applies to any business entity with no employees that engages in continuous data processing activities, such as video surveillance for ensuring the safety of people and property within business premises. For those processing activities that are occasional, a business entity is not obliged to document formal records.

Records of personal data processing activities must be kept up to date in real time and must be amended with each change in the scope, purpose, basis, and method of processing, as well as personal data protection measures. These records serve as a kind of “table of contents” for the controller/processor regarding the personal data processing activities carried out within their organization. Unlike previous regulations, these records are not submitted in advance to the Commissioner for Information of Public Importance and Personal Data Protection. Instead, the controller/processor must make the records available to the Commissioner’s officials only upon request, a step that is typically the first request during an inspection.

Failure to maintain records of processing activities results in a fine of 100,000 dinars for obligated legal entities and 20,000 dinars for the responsible individual within the legal entity.

By Miodrag Klancnik, Partner, MMD Advokati

Gecic Law has appointed Miodrag Jevtic to Partner.

Former Counsel Jevtic has been with Gecic Law since 2020 as part of the firm’s Banking & Finance and Dispute Resolution practices. Earlier, Jevtic worked for Spasic & Partners between 2008 and 2020. 

“Being a part of Gecic Law has been an immensely rewarding journey,” Jevtic commented. “I am deeply honored to step into the role of Partner, where I will continue to support our firm’s dedication to excellence, innovation, and client success. My heartfelt thanks go to my colleagues and clients, whose trust and collaboration have been vital in every achievement.”

“Miodrag’s election to Partner is a natural progression, reflecting his immense dedication to our clients, values, and the legal profession,” added Founding Partner Bogdan Gecic. “His exceptional expertise, outstanding leadership, and mentoring qualities make him an invaluable asset to our team. We are confident that Miodrag will continue to drive the firm’s growth and success in his new role.”