Good news for lump-sum taxpayers: Tax growth limit extended by the end of 2025

The Government of the Republic of Serbia has extended the limit on the increase of tax base for lump sums of no more than 10% per year, until the end of 2025. This measure was introduced by amending the Regulation on lump-sum taxation, which enters into force tomorrow, October 28. For many of the approximately 120,000 lump-sum taxpayers in Serbia, this is a relief for further business, says Irena Đorđević Šušić, head of Entrepreneurship and Innovation Unit in NALED.

- We welcome the efforts of the Ministry of Finance for the fiscal relief of lump sum entrepreneurs because they represent a significant part of our economy. The goal of this restriction is to ensure the predictability of their business and stimulate the continuation of work in legal streams, which is especially significant at the time of the current crisis and high inflation - explains Đorđević Šušić, adding that the potential consequences of the abolition of this restriction would be the deregistration of entrepreneurs or the flight of lump-sum entrepreneurs into the gray zone.

Another important novelty is the reduction of the base for business beginners, by 50%, compared to previous 20%. According to Đorđević Šušić, this is a significant support given to beginners in business.

For NALED members, supporting entrepreneurship is one of the strategic priorities, given that our association gathers almost 350 companies, local governments and non-governmental organizations, and together with membership from the civil sector and local associations, we represent another 22,000 entrepreneurs and small businesses in Serbia, says Đorđević Šušić. She notes that the 10% growth limit will not apply if the lump-sum entrepreneur changes the activity code, the municipality or the place where he is registered, except in the case of changing municipalities within the same city.

- There is room for additional improvement in these areas through the introduction of consolidated payment of taxes and contributions to one instead of four payment accounts, enabling lump-sum entrepreneurs who exceed the limit of six million to opt for the regime of payment of personal earnings through the application of the Tax Administration, increasing the income limit that a flat-rate taxpayer can achieve and remain in the flat-rate taxation regime, as well as other initiatives that are worth discussing - she concludes.

As a reminder, the flat rate reform was started in 2019, when a transparent formula for calculating tax obligations was introduced on the initiative and with the support of NALED. By using the flat-rate tax and contribution calculator, which is available on the website of the Tax Administration, lump-sum entrepreneurs can find out the amount of obligations in advance. Then the delivery of final tax rulings at the beginning of the year was introduced, which means that lump-sum taxpayers no longer have to pay advance amounts during the year and fear how much they will have to pay additionally after receiving the final rulings. From 2020, tax rulings are delivered exclusively in electronic form through the tax mailbox on the portal eTaxes, which can be accesses using a qualified electronic certificate.

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