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Capital Gains Tax and Tax Exemptions

The latest amendments to the Law on Personal Income Tax, in the part that refers to tax exemptions for tax on capital gains of natural persons, have expanded the scope of exceptions to the taxation of capital gains. However, it does not seem to be done in a coherent and comprehensive way.

Capital gains tax is one of the personal income taxes that existed in the basic version of the Law on Personal Income Tax from 2001. Since then, it has been the most basic form of tax exemption – whoever invests the funds obtained from the sale of real estate in solving his housing issue, that is, the housing issue of his family/household members, had the possibility to be exempt from capital gains tax or to have it reduced.

In this article JPM’s Partner Nikola Đorđević and Senior Associate Marija Vukčević are providing detailed information on recent problematic practices in its application.

 

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