Accounting for flat-rate sole proprietors

What is flat-rate taxation?

Flat-rate tax (paušalno oporezivanje) is the simplest way to run a business in Serbia: the Tax Administration issues a decision setting a fixed monthly amount of tax and social contributions, based on your activity code, municipality and other criteria — regardless of how much you actually earn. There are no business ledgers and no tax balance; the only required record is the KPO book (a simple record of revenue collected).

For a foreign founder this is often the cheapest and least bureaucratic way to invoice clients from Serbia. You can check the approximate monthly amount for your activity in our flat-rate tax calculator.

Who can be a flat-rate taxpayer?

• Sole proprietors with revenue up to RSD 6,000,000 per year — above that threshold you must switch to full bookkeeping.
• Activities excluded from the flat-rate regime: wholesale and retail trade, hospitality (hotels and restaurants), marketing and advertising agencies (advertising and market research), real estate and financial intermediation, as well as accounting and audit services.
• You are not VAT-registered — entering the VAT system means leaving the flat-rate regime.

What we do for you

• Registration at the APR — from choosing the right activity code to receiving the decision, we run the whole procedure.
• Filing with the Tax Administration and monitoring the decision that sets your flat-rate liability.
• KPO records — we keep the revenue book, including foreign-currency inflows from clients abroad.
• Tracking the RSD 6,000,000 limit — we warn you in time and prepare the move to bookkeeping or an LLC before you outgrow the regime.
• Deadlines and payments — we remind you of every obligation, so nothing slips through.

Flat-rate clients are our simplest and most affordable package — see how we build a quote on the pricing page.

Frequently asked questions

What is the revenue limit for flat-rate taxpayers?

RSD 6,000,000 of revenue in a calendar year. Once you cross it you lose the right to the flat-rate regime and must move to full bookkeeping. We track your revenue and warn you in good time — before it becomes a problem. In detail: the RSD 6 million limit explained.

Does a flat-rate taxpayer have to keep business ledgers?

No. The only mandatory record is the KPO book (a record of revenue collected). Tax and contributions are paid as a fixed monthly amount set by a decision of the Tax Administration.

What is the independence test?

A set of nine criteria the Tax Administration uses to check whether a sole proprietor is in substance an employee of a single client — who sets the working hours, who provides the equipment and premises, and so on. Failing the test means significantly less favourable taxation. The test applies to all sole proprietors, both flat-rate and personal-salary; only an LLC is outside its scope. In detail: a guide to all nine criteria.

What happens when I exceed RSD 6 million?

You move to full bookkeeping — most often as a sole proprietor on a personal salary (10% tax on actual profit) or by founding an LLC. We manage the whole transition without interrupting your business.

Can a foreign citizen register as a flat-rate sole proprietor?

Yes. Foreign nationals can register a sole proprietorship in Serbia; a passport is required and, depending on your situation, certified translations. We regularly work with founders living abroad and the whole process can be handled remotely, in English.

Note: this page is informational and does not constitute tax advice. The exact flat-rate liability is set by a decision of the Tax Administration.