Taxation of Wages of Foreign Natural Persons  Assigned to Work in Serbia Cover Image

Опорезивање зарада страних физичких лица упућених на рад у Србију
Taxation of Wages of Foreign Natural Persons Assigned to Work in Serbia

Author(s): Gordana Ilić-Popov
Subject(s): Law, Constitution, Jurisprudence, Law on Economics, Fiscal Politics / Budgeting
Published by: Правни факултет Универзитета у Источном Сарајеву
Keywords: Employment; Foreign natural persons; Permanent establishment; Secondment; Salary; Tax Treaty; Wages tax;
Summary/Abstract: In this paper the author analyzes the collision rules in the international tax law regulating the taxation of salaries of the foreign natural persons employed by a foreign employer seconded to perform work for the needs of a Serbian legal entity at the territory of Serbia. Which state is entitled to raise a tax claim – a country of source (Serbia) and / or a country of residence of that worker depends on whether the conditions of the tax treaty provided for the labor relations are met. The author points out some dilemmas about these conditions. Assigned workers often have the right to reimburse certain costs incurred during their stay in Serbia (e.g., accommodation, transportation, food, etc.), thus the issue of the tax treatment of such other income is also raised. Tax implications of the situation when seconded worker is a resident of a state with which Serbia does not have a tax treaty are also analyzed. The main aim of this research is to determine from the tax aspects, on one hand, secondment of foreign workers and the international labor force hiring, on the other hand. As well, from the aspect of taxation of salaries and other benefits, the author focused on the situation when foreign natural per- sons are sent to work in a permanent establishment of a non-resident legal entity located at the territory of Serbia.