According to the law on personal income tax and the Rulebook on the conditions and manner of exercising the right to a tax credit for investing in startup companies – this type of tax relief is defined as the tax relief aimed at natural persons who invest money in startup companies – which are defined as new companies that use innovative technologies.

The tax credit allows investors to reduce their personal income tax by deducting part of the money they have invested in the startup company from their tax base. This was done to encourage more investment in startups, considering that one of the main problems for them is the lack of funding.

The conditions

The text also states that the investor must meet certain conditions to be able to use this benefit, such as:

  • Must not own more than 25% stake in the startup before investing.
  • They must pay the money that increases the capital of the startup.
  • They must not reduce their investment for three years from the date of investment.
  • They can use this benefit in the next tax year after fulfilling all the conditions.

Therefore, we state that several limitations apply to this tax relief, such as:

  • The maximum amount of tax credit that an investor can obtain is 30% of the investment, but no more than RSD 100,000,000.
  • Also, regardless of how many investments have been made, the maximum amount of tax credit that can be used in one tax year is 50,000,000 dinars.
  • If the investor has related persons who also invest in the same startup, the total tax credit for all of them cannot exceed RSD 100,000,000.

Finally, a startup company must meet the following conditions to be considered a startup for this tax benefit, such as:

  • It must have been in existence for less than three years.
  • Most of its activities must be directed towards innovation, which means that they create new products, technologies or services that are needed by the market.
  • In addition, the startup must meet additional requirements, such as restrictions on annual income and profit distribution.
  • The text is informative and useful for all those who want to learn more about the possibilities and benefits of investing in startup companies in Serbia. The text is intended for the public who want to get acquainted with this tax measure.