Unpleasant Surprises For Unsuspecting Serbian Sailors

The Serbian Tax Administration has reportedly produced 8,000 tax judgments for natural people, and a large number of those individuals have already received decisions ordering them to pay tax on income earned in 2017.

The government is cracking down on independent contractors, including sailors. The Serbian Seamen’s Association estimates that there are 2,000 officers, 3,000 ship crew, and up to 10,000 cooks, port employees, and other personnel in Serbia.

In recent days, sailors have reportedly began receiving tax settlements of between one thousand and ten thousand euros, as reported by Mr Mladen Carevic of the Seamen’s Association of the Republic of Serbia.

According to the information we gathered, “everyone who had an inflow of more than one thousand euros into their foreign currency account in 2017 was provided with a solution.” However, seafarers are not independent contractors, as these people mistake us for. Since we spend most of the year working abroad and then remitting our earnings, we rarely set foot in the nation. Twenty-five percent of our salary must now go to the government in the form of taxes and other mandatory payments. He goes on to note that “most of us” do not have health insurance, a pension, or seniority.

On December 14, a decision was issued on his case by the Tax Administration, and on December 21, it was brought to him by the postman.

We have 15 days to file an appeal, and I’ve already missed six of them. A single appeal can be filed, but that won’t stop the execution. We could make a down payment and then pay it off over 120 monthly payments, with interest added on if we didn’t pay the initial payment on time. He describes the unfortunate circumstances they found themselves in, saying, “If we pay it, it means that we accept all obligations and then write complaints for nothing.” He goes on to say that some people who got solutions ended up giving up sailing altogether, and that the Association is now trying to get in touch with people who are out on the world’s oceans and rivers.

The debt is only for 2017, he says, adding that he fully anticipates payment in 2018 and beyond. A PU notice or warning was never issued, he adds.

We do not avoid our duties, but we expect the state to meet its obligations to us as well. To control the immigration of sailors and the process of obtaining certificates that are currently unavailable in the United States, he argues.

In the maritime industry, thousands of Serbs are employed on various types of ocean vessels, including tankers, gas transport ships, cruise ships, and ferries.

Mr Carevic notes that everyone is trying to get tax certifications from their companies, but the difficulty is that most shipping companies are registered in tax havens where taxes are low or not paid at all.

Mr Aleksandar Radic writes on the website of the Union of Seafarers and Boatmen of Serbia that they approached the Ministry of Finance last year with the Croatian model for regulating their status, but they never heard back.

Income tax rates in nations like the Netherlands and Croatia are tiered according to the level of one’s salary on board the ship or the total amount of money one brings in, respectively.

Since sailors bring in “live” foreign currency, several poor countries and maritime powers, like the Philippines and Indonesia, pay no tax at all.

In countries where such contributions are mandated by law, residents are exempt from making payments until they have been physically present in the country for at least 183 days (6 months plus 1).

It has been said that “a seafarer’s profession is one of the most difficult: life aboard a ship entails separation from family and a working day that may run more than 12 hours, without a single day off for 5, 6, or more months… Bread with seven crusts is called that because… In 95% of cases, seafarers are not permanently employed; instead, they work for a set period of time, from one date to the next, are paid in the gross amount, have no entitlement to annual leave or pension insurance (unless they pay from their own earnings), are not eligible for sick leave, and are not allowed to board the ship if they are ill. New agreements are made with each vessel. According to the terms of our contract, we will be operating mostly as independent contractors. Payroll deductions for airline tickets are commonplace. Since our occupation is not recognized, for instance, a seafarer in Serbia cannot get a cash loan of 100, 10,000, or 20,000 euros from any bank.

For more information on this or any other legal, tax, or business topic, feel free to write to us at [email protected] at any time or call us at phone number +381113281914 every working day from 08:30 to 16:30.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your AK STATT representative, or other competent legal counsel.


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