Lump-sum taxation in Serbia

What is lump-sum taxation?

A lump-sum taxpayer (paušalac) is an entrepreneur who pays tax on a fixed estimated income — a fixed monthly amount of tax and contributions regardless of actual turnover. Instead of keeping detailed books, the Tax Administration issues a decision with a predetermined amount. This allows simpler administration and predictable costs.

Who can be a lump-sum taxpayer?

Allowed activities include services and traditional crafts: IT programming, design, consulting, education, translation, hairdressers, mechanics, taxi drivers, etc.

Prohibited activities: retail and wholesale trade, hospitality (hotels, restaurants), advertising agencies (code 73.11), financial intermediation, real estate activities.

6 million dinar limit

Annual turnover must not exceed 6 million RSD (calendar year). Exceeding this limit means loss of the right to lump-sum taxation — the entrepreneur switches to bookkeeping and tax on actual income.

8 million dinar limit (VAT)

When turnover in the last 12 months exceeds 8 million dinars, the entrepreneur enters the VAT system by law. Lump-sum taxpayers cannot be VAT payers, so entering VAT ends lump-sum status.

Independence test

The Tax Administration checks whether you are truly an independent entrepreneur or work as a substitute for an employee. The test has 9 criteria. If you meet 5 or more criteria in relation to one client, you are considered non-independent. The consequence is taxation of income from that client as "other income" at 20% plus contributions (PIO 25.5%, health 10.3%).

Criteria include: prohibition on working with other clients, client bearing business risk, use of client premises and equipment, client determining working hours, etc.

How to open a lump-sum business — steps

• 1. Verify that your activity is allowed for lump-sum taxation.
• 2. Choose the correct activity code (SRB 2008).
• 3. Obtain a qualified electronic signature for access to ePorezi and eAPR portals.
• 4. Register with APR (Business Registers Agency) — electronically via eAPR or in person.
• 5. Submit the lump-sum taxation application (form PPDG-1R) within 5 days of registration.
• 6. Open a business account with the bank using the APR decision.
• 7. The Tax Administration issues a decision on the monthly tax amount within 30 days.

Registration costs

• E-application to APR: 1,500 RSD
• In-person application: 4,900 RSD
• Stamp (optional): approx. 2,000 RSD
• Total: 1,500–7,000 RSD

Monthly costs

Monthly tax and contributions range from approximately 20,000 to 40,000 RSD, depending on activity, municipality and corrective factors (age, business duration, zone). The amount is determined by the Tax Administration.

Important deadlines

• Lump-sum application: 5 days from establishment
• For 2026: application by 31 October 2025
• Tax payment: by the 15th of the month for the previous month
• Annual tax return: by 15 May

KPO book

Lump-sum taxpayers must keep a Book of Turnover (KPO). All issued invoices are recorded chronologically. This record is essential for monitoring the 6 million dinar limit. It can be kept on paper or electronically.

Fiscalisation

Business with individuals: fiscal cash register is mandatory, except for specific activities (lawyers, taxi drivers, veterinary services, certain crafts). Business with legal entities: fiscal cash register not required.

Electronic invoices (SEF)

Lump-sum taxpayers are not required to use the Electronic Invoice System when dealing with the private sector. The obligation exists when dealing with the public sector (state institutions).