Flat rate-taxation - Entrepreneur - in Serbia

To run a business in Serbia if we exclude corporation (joint-stock company) and other rare forms, you can pretty much choose 2 forms.

You can run the business as Entrepreneur or Limited Liability Company (LLC).

From tax and costs perspective to be Entrepreneur is more cost-effective.

Related article: Entrepreneur vs LLC in Serbia

There are 2 kinds of taxation for Entrepreneurs:

  1. Flat rate taxated by the Tax authority or
  2. Making regular financial report and paying tax according to profit.

Entrepreneurs which are flat rate taxated

Amount of tax and social contributions depends on the city or municipality where they are registered as Entrepreneurs.

Tax authority determines base which multiplies with percentage of tax, and social contributions.

That base, even in New Belgrade where the base is probably highest in whole Serbia, is not more then 85.000,00 RSD for IT engineers.

Percentage of tax is 10%, pension contribution 26%, health insurance 10,3%, unemployment 1,5%.

So, in this example base is 85.000,00 RSD

Tax (10%) = 8.500,00 RSD
Pension con. (26%)= 22.100,00 RSD
Health con. (10,3%) = 8.755,00 RSD
Unemployment con (1,5%) = 1.275,00 RSD
Total (47,8%) = 40.630,00 RSD (around 340,00 EUR)

Entrepreneur can receive up to 6.000.000,00 RSD (around 50.000,00 EUR) in one calendar year with cost of tax and contributions of 340,00 EUR on monthly basic (in this example).

Other costs for Entrepreneur could be cost of accountancy if they use it (which is recommended), bank fees for bank account and exchange of foreign currency and that is pretty much all.

If the person is already employed in some company, he/she also can register him/herself as Entrepreneur, and in that case there is no payment of health and unemployment contribution. Everything else stay the same, and costs are, as you see, even lower.

Hope this is helpful.

Next week will write about self-taxation (paying profit according financial reports).

If you are interested in Serbia as your business destination we can provide 1 place service – temporary residence and work permit in Serbia, establishing of the company or registration of Entrepreneur, legal and tax advising, administrative support and accounting.

So, in this way you will have quality services at 1 place that saves your time, energy and money, and enable you to focus on the core of your business.

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