Taking into account the reactions of current tax administration agencies and the taxation of income from abroad, we hereby draw attention to the “legal framework for foreign tax revenue” to explain the procedure itself, the law.
I) Who is a “freelancer”?
In our country, the existence of “freelancers” is nothing new, but recently more and more people are focusing on them, especially when taxing their income, which mainly comes from abroad. .
What do “freelancers” actually do? That is, “freelancers” are usually self-employed, or hired under specific projects, employment contracts, etc., usually in the IT department, but they can also be translators, designers, marketing experts, creative content authors, etc. The so-called “blog” provides various services to customers. They can provide software development services, foreign language courses, promotions, graphic design, game development and development services, and can find jobs on many Internet platforms for professional networking and training.
“Freelancers” have the opportunity to stipulate their working hours, the time, method and amount of time to work on the project, and to determine the compensation, which is the cost of the time they spend at work. On the other hand, in addition to many advantages, this way of generating income also comes with some obligations and responsibilities. Perhaps one of the most important issues is the subject of our legal analysis, which is the payment of income tax. According to the law, this tax forces all individuals to pay personal income tax, which is paid for income from all sources (except those sources). . Exemptions clearly stipulated by law.
II) Legal framework
First of all, we emphasize that the currently effective “Personal Income Tax Law” (hereinafter referred to as “LPIT”) has been effective since 2001. LPIT 6. stipulates that taxpayers are natural persons and are obliged to pay taxes under this law.
LPIT further defines the terms “residents of the Republic of Serbia” and “non-residents” in the art. 7. Provisions that the individual income taxpayer is a resident of the Republic of Serbia, earning income in the Republic of Serbia and in other countries/regions.
On the other hand, Article 8 of the LPIT defines income taxpayers as citizens and non-resident natural persons, used for income earned on the territory of the Republic of Serbia. In particular, income is considered to be the income of a natural person based on the work performed in the Republic of Serbia and the right to use or dispose of it in the Republic of Serbia.
Based on the above, it is indisputable that there is a legal obligation to pay income tax for residents and non-residents, and this obligation has been fulfilled both in the Republic of Serbia and in another state.
Regarding the determination and taxation of “freelancers” in Serbia, LPIT in Art. 100a defines income that is determined and paid for income tax based on the principle of self-taxation. In this case, the taxpayer is obliged to obtain salary and other income from another country or from another country in the diplomatic or consular mission of a foreign or international organization or the representatives and officials of the mission or organization. If the tax is not calculated and paid by the payer of the income, the tax deduction shall be calculated and paid in accordance with the provisions of this law. The above means that “freelancers” are obliged to submit tax returns to the competent tax authorities to report income taxes, which will be explained in detail in the legal analysis below.
III) Regulations on Limitation of Tax Liability
As we further analyze and set the legal framework for taxation from abroad, we must first explain one of the most important institutions in our legal order.
The concept and formulation of the statute of limitations
As one of the most important institutions in our legal order, the Statute of Limitation Research Institute exists in various branches of law, and in fact represents obsolescence, that is, the disappearance or inalienability of certain rights due to not using a certain right in name. . .
According to the “Contract and Tort Law”, the general concept of the “Statute of Limitation Law” is Art. 360, which stipulates that statutes of limitation will occur when the creditor may require the performance of obligations after the time prescribed by the law has passed.
Term of tax liability-termination of tax liability
In summary, according to the current effective “Tax Procedures and Tax Collection and Administration Law” (hereinafter referred to as “LTPTA”), one way to terminate tax debt is to restrict the right to determine and collect taxes. Supplementary tax. This is conceived in Art. 114. It also stipulates that the competent tax authority’s right to collect tax receivables expires within five years from the date of the statute of limitations, that is, from the first day of the second year of the taxpayer’s second year.
On the other hand, apart from this relative statute of limitations, this is in Art. Article 114 and Article 11 of LTPTA. 114§ Paragraph 1 also envisages a 10-year general absolute statute of limitations, which stipulates that the right to determine, collect, refund, tax credits, refunds, refunds, and repay dues shall always be determined by the transfer of taxes. Expires within ten years, unless otherwise stipulated in this law, it shall be determined or taxed at the end of the year, that is, the subscription shall be made.
Interruptions and delays in the statute of limitations
However, in order to better understand the moment when the statute of limitations begins, it is necessary to distinguish between interruption and delay of the statute of limitations, which is stipulated in Article 5 of the United States Code. 114d and Art. 114z of LTPTA. We emphasize the importance of this point, because interruptions and delays have different legal consequences for outdated institutions. More precisely, they provide us with a question about whether or not the statute of limitations should be included in the statute. limitation.
That is, after the interruption, the statute of limitations restarts operation, and the time elapsed before the interruption is not counted before the interruption of the limitation period. On the other hand, in terms of delaying tax liability statute of limitations, LTPTA defines in detail the situation where the tax authority’s right to determine and collect taxes and ancillary taxes has not expired and the validity period does not last long. The statute of limitations is not calculated in the absolute statute of limitations.
In this regard, we have noticed that the competent tax authority controls and determines the factual circumstances of the payment in each case, determines whether there is more or incorrect taxation, and whether the taxation has been interrupted at some point. Whether the statute of limitations and related taxable obligations are out of date.
Based on the above, the conclusion of this section can be concluded that due to legal restrictions, if within 5 years from the first day of the second year of the second year of the year, the tax liability will be terminated. Determining the statute of limitations for taxes or due debts will not interrupt the statute of limitations.
However, if the statute of limitation period is interrupted within five years, the statute of limitation shall be re-executed within the general absolute limitation period of ten years.
IV) Submit tax return
Now that we have laid the foundation for legal analysis, we can turn to the issue of submitting tax returns in front of the tax administration authorities. That is, the tax return for the calculated tax amount that has determined the self-taxation obligation under the LPIT shall be submitted within 30 days from the date of realization of the income, and the payment of taxes and related donations shall not be later than the deadline for submitting the return.
According to LPIT, tax returns are submitted in electronic form (with electronic signature), or in written form by mail or directly to the competent tax authority determined by the taxpayer’s residence.
However, the public knows very little about the procedures of tax returns, and rash understanding of these behaviors may lead to very serious consequences, because in addition to initiating tax determination procedures, the tax bureau must initiate misdemeanor or criminal proceedings. art. LPIT’s 180. defines cases where taxpayers-natural persons are regarded as tax crimes and imposes fines on them, which can be fined from 5,000.00 to 150,000.00 RSD. However, if the undeclared tax amount exceeds 150,000.00 RSD, a criminal prosecution will be instituted, which can be sentenced to imprisonment based on the seriousness of the crime, that is, the amount of tax.
However, for all questions that taxpayers may have when submitting tax returns, taxpayers under LPIT have the right to obtain free tax legal information about their tax obligations from the tax bureau. If there is ignorance and basic legal assistance, this will Enable him to comply with regulations and Art. All other rights required to report and pay taxes, and to calculate and pay auxiliary taxes. LPIT’s 24.
In summary, there is no doubt that “freelancers” are obliged to report, determine and pay income tax at home and abroad, and during the application process, they can rely on the services of the tax authorities if they have any doubts or questions .
In addition, we emphasize that the Constitution of the Republic of Serbia prohibits retrospectiveness, and tax authorities are obliged to determine the amount of tax payable in accordance with the current regulations at the time of its establishment, unless the provisions of the law are intended to have retrospective effect, as in the Constitution and laws, and Behaviors in the taxation process are subject to regulations, which are already in force when they come into force.
Considering that the amendment to the LPIT Law that “freelancers” must pay taxes has been in force for five years, it is certain that a considerable number of people who fail to fulfill their tax obligations on time, and in this case, may bring misdemeanors and Criminal proceedings to compulsory income tax.