Law on the tax on greenhouse gas (GHG) emissions.

This Law introduces a tax on greenhouse gas emissions. Greenhouse gases (GHG) are carbon dioxide (CO2), nitrous oxide (N2O) and perfluorocarbons (PFCs). The tax is calculated and paid on the taxable amount of GHG emitted by the taxpayer during the tax period, in accordance with this Law. A taxpayer is a legal entity or entrepreneur who, in accordance with the regulations governing climate change, is required to hold a GHG emission permit, as the operator of a facility, or part of a facility for which it is required to obtain the aforementioned permit, carries out one or more of the following activities within the meaning of the regulations governing the classification of activities: 1) production of artificial fertilizers and nitrogen compounds; 2) production of cement; 3) production of pig iron, steel and ferroalloys; 4) production of aluminum; 5) production of electricity. Tax base, tax period and amount of tax liability are defined in article 3 (the tax base is determined as the amount of GHG emitted by the taxpayer during the tax period from all individual installations reduced by the amount of emissions that is the reference for a certain production process, i.e. activity; the total emissions are determined on the basis of verified reports that the taxpayer submits to the competent authority in accordance with the regulations governing climate change, i.e. on the basis of an assessment of GHG emissions by that competent authority, which, in cases provided for by the aforementioned regulations, replaces that report; the reference emission is determined as the product of the amount of reference emission values determined for a specific production process, i.e. activity as unavoidable despite the use of the most advanced available technology and the quantity of the product produced, i.e. the scope of the activity undertaken during the tax period). A taxpayer whose registered main activity is electricity production within the meaning of article 2 of this Law and who in the previous tax period earned at least 80% of his total income from that activity shall be granted the right to a tax credit in the amount of 20% of the amount of financial resources invested in prescribed measures and activities leading to a reduction in carbon dioxide equivalent (CO2eq) emissions during the tax period for which the tax return is submitted.
The taxpayer may exercise the right to incentives allocated from the budget of the Republic of Serbia to finance climate and energy transformation by investing in the development of renewable energy sources and energy efficiency, innovative low-carbon technologies, decarbonization of industry, energy transition projects including energy infrastructure, green construction in accordance with the regulations governing planning and construction, as well as support for a just transition and protection of vulnerable households.