An Entrepreneur in Serbia (in Serbian: preduzetnik) is a registered individual as a legal entity offering their services to local and international clients for a limited or unlimited time. This setup is the best option for individuals with expected income below cca 50k EUR, due to flat tax rate, but it’s important to understand the difference between the types of entrepreneurs you can set up in Serbia. Only one person can register as an entrepreneur in Serbia and only one entrepreneur can be registered in Serbia by one person. From the Tax perspective, there are two common types of Entrepreneurs in Serbia (there is also a third type, but is rarely used):
- Lump-sum entrepreneurs with max. income of 6 mil. RSD (cca. 50k EUR), pay the same amount of money for tax and contributions purposes each month, free use of received funds, can’t be in the VAT system, they cannot choose business activity in the field of trade, real estate, hospitality and other prescribed activities, less work for accountants. This monthly amount of money for tax and contributions depends on various factors, such as: registered location, age, registered business activity…
- Entrepreneurs who keep books according to the double-bookkeeping system don’t pay flat-rate taxes but calculate the amount they have to pay at the end of the fiscal year. These entrepreneurs pay taxes at a rate of 10% on total profit and have to enter the VAT system after they go over the limit of 8 million RSD in 12 months (date to date), have to prepare financial and tax reports, more work for accountants. This type is better for entrepreneurs who expect to have turnover grater the 6 mil. RSD, possibly a subject of annual income tax if they achieve income larger then prescribed limits.