(Official Gazette of RS, no. 18/21)
- INTRODUCTORY PROVISIONS
Scope of the Law
This law shall regulate the conditions, manner, and procedure under which the assets and increase in assets of a natural person are determined and the Special Tax on increase of assets for which a natural person cannot prove were acquired legally, as well as the bodies responsible for implementing this law.
Definitions of terms
The terms used in this Law shall have the following meaning:
1) “assets” shall be understood to mean immovable and movable assets, both registered or unregistered, as well as other property rights in the Republic of Serbia or in foreign countries;
2) “reported income” shall be understood to mean income that an individual has reported to the competent tax authority;
3) “increase in assets” shall be understood to mean any positive difference between an individual’s wealth at the end of a period compared to the beginning of that period;
4) “expenditures for private needs of a natural person” means expenditures that a natural person had for private needs determined in the process of determining of assets and special tax;
5) “assets subject to special tax” is the difference between the sum of increases in assets and expenditures for private needs of individuals on the one hand and reported revenues increased by the amount of non-taxable income in the Republic of Serbia, unencumbered assets, assets acquired by borrowing , i.e property acquired in another lawful manner.
Burden of Proof
The burden of proof for an individual’s increase in assets relative to his/her reported income shall lie on the Tax Administration, while the burden of proof that the increase in assets exceeding the reported income has been obtained from legal sources shall lie on the individual.
TAX ADMINISTRATION UNIT RESPONSIBLE FOR DETERMINING THE ASSETS AND SPECIAL TAX
The Tax Administration shall be responsible for conducting the procedure of determining of assets and Special Tax assessment and collection of Special Tax in accordance with this Law.
A special organizational unit shall be established within the Tax Administration to perform the tasks stipulated by this Law (hereinafter: the Tax Administration Unit).
Head of Tax Administration Unit
The requirement for Head of the Tax Administration Unit shall be minimum ten years of relevant tax procedure work experience.
Head of the Tax Administration Unit shall be appointed by the Government, at the proposal of the Minister of Finance, for a term of five years.
TAX ADMINISTRATION UNIT POWERS AND COOPERATION BETWEEN STATE AUTHORITIES
Tax Administration Unit Powers
During the procedure prescribed by this Law, the Tax Administration Unit shall have the right to access and obtain data from:
1) all types of records and data maintained, i.e. owned, by the competent authorities and other persons and relating to immovable and movable assets, business entities, financial instruments, savings deposits and accounts with commercial banks, as well as other records and data relevant for the assessment of individuals’ assets;
2) business books and documentation of companies and other persons for the purpose of assessing individuals’ assets.
Data Reporting Obligation
All state authorities and organizations, autonomous province authorities and local government units, public authority holders, individuals and legal persons shall provide to the Tax Administration Unit, at their request, their proprietary data within the time limit specified by the Tax Administration Unit and shall assist the Tax Administration Unit staff in the course of the procedure prescribed by this Law.
Liaison Staff and Staff Reassignments
The Ministry of the Interior, the National Bank of Serbia, the Anti-Money Laundering Administration, the Anti-Corruption Agency, the Republic Geodetic Authority, the Business Registry Agency and the Central Securities Depository and Clearing House shall designate one or more liaison staff to ensure more effective cooperation and exchange of the data necessary for the Tax Administration Unit to implement the procedure prescribed by this Law.
If necessary, at the request of the Tax Administration Director General, the liaison staff may be temporarily transferred or reassigned to the Tax Administration Unit.
Such temporary transfer or reassignment shall last for maximum one year and may be extended.
Notifying Police and Public Prosecutor’s Office
If in the procedure prescribed by this Law it is determined that the is reasonable doubt that a criminal offense has been committed, the Tax Administration Unit shall inform the police, the Tax Police, the Public Prosecutor’s Office, and other competent authorities thereof.
IV. DETERMINING OF ASSETS AND SPECIAL TAX ASSESSMENT PROCEDURE
The procedure for determining of assets and Special Tax shall be initiated and conducted ex officio and shall consist of the pre-investigation procedure and the Special Tax investigation and assessment procedure (hereinafter: the audit procedure).
Determination of the value of Assets
Assets value assessment shall take into account the overall assets of an individual, and in particular:
- immovable assets (apartments, houses, commercial buildings and premises, garages, land, etc.);
- financial instruments;
- ownership stakes in legal persons;
- equipment used in self-employment activities;
- motor vehicles, vessels and aircrafts;
- savings deposits and cash balances;
- other property rights.
The Government shall prescribe the terms and procedure for the assessment of individuals’ assets and income.
Initiating Pre-investigation Procedure
The pre-investigation procedure shall be conducted by the Tax Administration, based on risk analysis.
The pre-investigation procedure may also be initiated based on reports received from other authorities or at the initiative of an individual or a legal person.
During the pre-investigation procedure, the Tax Administration Unit shall assess the increase in assets on the basis of the internal data and the data obtained from other authorities and organizations, legal persons or individuals, and shall cross-check such data with the reported income for the relevant period.
The Tax Administration Unit shall initiate the audit procedure, as stipulated by the law governing the tax procedure and tax administration, if it established in the pre-investigation procedure that there is a probability that the individual’s increased assets, i.e. the difference between his/her increase in assets and the reported income, in maximum three consecutive calendar years exceeds the amount of EUR 150,000 in RSD equivalent, calculated at the official National Bank of Serbia middle exchange rate effective on the last day of the calendar year covered by the investigation period.
The audit procedure determined shall be the assets on which Special Tax is levied and the value of the assets.
The individual referred to in paragraph 1 above shall have the right to participate in the investigation procedure and to produce evidence demonstrating that the assets have been obtained legally.
The individual’s failure to participate in the investigation procedure shall not stay the further steps in the procedure.
During the investigation procedure, the Tax Administration Unit shall prepare investigation report, which shall be subject to the law governing the tax procedure and tax administration.
Upon completion of the audit procedure, the Tax Administration Unit shall adopt a decision assessing Special Tax if it has established the existence of illegally acquired assets for which Special Tax is levied.
Special Tax Base
The Special Tax base is determined in the value of the property on which the Special Tax is determined, which consists of the sum of the revalued value of those assets for each audited calendar year that was subject to audit.
The illegally acquired assets shall be revalued by applying the consumer price index effective on the last day of the calendar year for which the illegally acquired assets have been assessed until the date of decision assessing Special Tax.
Revenue from Special Taxes belongs to the Budget of the Republic of Serbia.
Special Tax Rate
The Tax Administration Unit shall assess Special Tax for the entire investigation period, applying the Special Tax rate of 75% on the tax base assessed in accordance with this Law.
Appeals against the Tax Administration Unit’s Decision
An appeal against a decision assessing Special Tax may be filed with the Ministry of Finance. Appeals shall stay the enforcement of the decision.
The decision of the Ministry of Finance shall be considered final and enforceable in the administrative procedure and may be contested in an administrative dispute.
Application of the Law on Tax Procedure and Tax Administration
Unless otherwise provided by this Law, the law governing the tax procedure and tax administration shall apply to the procedure prescribed by this Law, except for the provisions on the statute of limitations for tax assessment and collection.
If the procedure prescribed by this Law has established that the taxpayer has an outstanding tax liability under a separate law (for another tax type) for legal income or assets, the procedure for the assessment and collection of such tax shall be conducted in accordance with the regulations governing that tax type, as well as the regulations governing the tax procedure and tax administration.
V. LINKS WITH CRIMINAL PROCEEDINGS
If a final and enforceable judgement under criminal proceedings has established the existence of criminal proceeds, but the Special Tax has also been paid in accordance with this Law, the court shall count the amount of the Special Tax paid towards the criminal proceeds.
The provision of paragraph 1 of this Article shall also apply in proceedings for confiscation of assets arising from a criminal offense.
Training of staff in the Tax Administration Unit and the Ministry of Finance
The Tax Administration Unit staff and the Ministry of Finance staff reviewing appeals in the second-instance procedure shall undergo continuous training.
The Minister of Finance shall prescribe the continuous training program and delivery method at the proposal of the Tax Administration Director General.
The Administrative Court judges adjudicating appeals against final and enforceable decisions assessing Special Tax shall have previously completed special training required for assessment of illegally acquired assets and Special Tax.
Judicial training shall be delivered by the Judicial Academy.
The Judicial Academy shall prescribe the training program, methodology and the duration of such training.
The Judicial Academy shall issue training completion certificates to judges who have completed the training successfully.
The Judicial Academy shall prescribe the certificate template and the issuance procedure.
VII. ASSETS DECLARATION AND BACKGROUND CHECKS
Prior to commencement of work, the Tax Administration Unit staff shall disclose complete and accurate data relating to their assets to the Anti-Corruption Agency, in writing.
The data relating to declared assets shall be recorded and checked by the Anti-Corruption Agency, in accordance with the law governing its operations.
Staff Background Checks
At a written request of the Tax Administration Director General, indicating the legal basis, purpose and the scope of checks, the Tax Administration Unit staff may be subject to background checks prior to entry into service, during the service in the Tax Administration Unit, and one year after the service in the Tax Administration Unit, without the obligation to inform the person that he/she is subject to such checks.
Background checks shall be conducted by the Ministry of the Interior and the Security Information Agency.
The Ministry of the Interior background checks shall focus on identifying potential impediments from the point of view of safeguarding of the public order, and the Security Information Agency background checks shall focus on identifying potential risks to security of the Republic of Serbia. The background checks shall include the collecting and checking of the data relating to the person subjected to the background check that is relevant for achieving the purpose of background checks. The checks shall include interviews with individuals, obtaining data from legal persons, government authorities or by accessing registries, records, data repositories and data bases maintained in accordance with the law, and by undertaking other actions in accordance with the law and implementing regulations.
After the procedure has been conducted, the background check report shall be prepared and submitted to the Tax Administration Director General. The report shall not include any data that might reveal the methodology or procedures applied to collect data, identify data sources or the Ministry of the Interior and the Security Information Agency officers conducting such background checks.
The data obtained through background checks shall be recorded, stored and protected in accordance with the law governing data confidentiality and the law governing personal data protection, and it shall be used exclusively for the designated purpose.
VIII. DATA SAFEGUARDING
All persons who in the process of determining of assets and Special Tax come across data related to this procedure are obliged to keep this data as secret data in terms of the law governing the tax procedure and tax administration.
IX. PENAL PROVISION
A fine in the amount of RSD 500,000 to RSD 2,000,000 shall be imposed for a misdemeanor on any legal person that has failed to provide any data at their disposal to the Tax Administration Unit at the request of the Unit and within the time limit specified by the Unit (Article 7).
A fine in the amount of RSD 100,000 to RSD 500,000 shall be imposed on any entrepreneur for the misdemeanor referred to in paragraph 1 above.
A fine in the amount of RSD 50,000 to RSD 150,000 shall be imposed on any individual who is a responsible person in a legal person, state authority or organization, autonomous province authority or local government unit or a public authority holder for the misdemeanor referred to in paragraph 1 above.
A fine in the amount of RSD 50,000 to RSD 150,000 shall be imposed for a misdemeanor on any individual who has failed to keep all data obtained in the course of asset and Special Tax assessment procedure confidential (Article 24).
Х. TRANSITIONAL AND FINAL PROVISIONS
Time Limit for Adoption of Bylaws
The bylaws foreseen by this Law shall be adopted within six months from the date of this Law coming into force.
Appointment of Head of Tax Administration Unit
The Head of the Tax Administration Unit shall be appointed within nine months from the date of this Law coming into force.
Designation of Liaison Staff
The Ministry of the Interior, the National Bank of Serbia, the Anti-Money Laundering Administration, the Anti-Corruption Agency, the Republic Geodetic Authority, the Business Registry Agency and the Central Securities Depository and Clearing House shall designate one or several staff members to liaise with the Tax Administration Unit within nine months from the date of this Law coming into force.
Coming into Force and Date of Applicability
This Law shall come into force on the eighth day following its publication in the “Official Gazette of the Republic of Serbia” and shall apply upon the expiry of one year from the date of the Law coming into force.