Tax treatement of farmers in the Republic of Serbia

Abstract

The subject of this paper is the tax treatment of natural persons that perform agricultural activities in the Republic of Serbia. The goal of the paper was to analyse norms related to the most important taxes that burden farmers, to assess their status in the Serbian tax system, as well as to formulate appropriate de lege ferenda propositions. The research showed that in many aspects farmers have privileged tax treatment due to the importance of agriculture in national economy, as well as their number and socialeconomic profile. Apart from the normative method, which was used predominantly, sociological, axiological and comparative methods were also used.

The Taxation of Agriculture in the Republic of Serbia as a Factor of Development of Organic Agriculture

“…From the aforementioned legal solution, it is clear that the majority of farmers in the Republic of Serbia will not be obliged to pay individual income tax, which provides them with a privileged treatment from the aspect of income taxation. Privileged treatment of farmers' income taxation is very common, especially in less developed countries [31]. In this respect, the Republic of Croatia and Bosnia and Herzegovina have given a privileged position to farmers within their tax legal solutions [32,33].…”

“…Exceptionally, revenues from the sale of agricultural and forest products and services, also including revenues from the collection and sale of forest fruits and medicinal herbs, as well as from the growing and sale of mushrooms and raising and sale of bee swarms (bees) and snails, are not taxable if generated by the following natural persons: holders of farms; natural persons who pay contributions for compulsory social insurance according to the decision as the insured based on agricultural activity, following the law governing contributions for compulsory social insurance; and beneficiaries of agricultural pension [40]. The abovementioned exemption does not apply to the following natural persons: members of a family farm and farmers who are not insured based on agricultural activity, and who generate revenues from the sale of agricultural and forest products and services, [31] including also revenues from the collection and sale of forest fruits and medicinal herbs, as well as from growing and sale of mushrooms, bee swarms (bees) and snails; hence, in this sense they are the taxpayers. The tax rate on other revenues is 20%.…”

Taxation of agricultural and forest land: Comparative perspective and practice in Serbia

“…Note: revenue data are in thousands of RSD Property tax is imposed on owners and holders of the usage rights on the land, but not on holders of the leases. In 2012, out of 2,480 million hectares of agricultural land enlisted in the Register of Agricultural Holdings, 773,603 hectares was leased land, out of which 40% is publicly owned agricultural land (Cvjetković et al, 2015). That means that more than 12% of land enlisted in the Register of Agricultural Holdings is tax exempted.…”

Taxation of farmers by the income tax in Serbia

“…Bearing all this in mind, it is clear that the largest number of farmers in the Republic of Serbia will not be obliged to pay personal income tax (Cvjetković et al, 2015). In this way, starting from the economic environment, the state of agricultural production and the economic strength of the holders of agricultural production activity, the Serbian tax authorities try to encourage small entities of agricultural production activity through the taxation system.…”

“…Hence, tax policy measures can either encourage or discourage agricultural production activity. The importance of the issue of taxation of farmers gets more important when we take into account the fact that the number of members and permanent employees of agricultural holdings of Serbia (according to the data for 2013) totals 1.44 million, out of which even 98 percent are the owners of the farm and members of their households (Cvjetković et al, 2015).…”