Entrepreneurs not to be Feared by VAT
Anyone planning to start a business in manufacturing, with an idea of selling their products in the future on a foreign market, should not refrain from entering the VAT system, as this could hinder their development and their financing through bank loans – this is one of the recommendations from the first educational workshop Start Legally.
After Belgrade, further workshops will be held in Niš (27 October) and Novi Sad (3 November) and new businesses or those planning to start a business can apply at office@naled.rs no later than 25 October / 1 November, respectively.
"NALED organizes these workshops within the project "Supporting the Government of Serbia in Countering Shadow Economy", in cooperation with the German Development Cooperation (GIZ), which serves to support the implementation of the National Program for Countering Shadow Economy. The participants can get acquainted with the legal framework, tax laws and administrative procedures, the basics of finance and funding sources, but also the most common mistakes in the first business steps," said Jelena Bojović, Policy Director in NALED.
The workshop emphasized that now is a good time to start a business because the state has launched the Decade of Entrepreneurship program, with many other incentives available. Prior to starting a business, entrepreneurs should check whether it is necessary to provide special permits (e.g. sanitary) and to postpone the official start date of business operations at the time of registration, to avoid an obligation of paying taxes and generating tax debt, without even formally starting their work.
"Not knowing the legal framework is one of the key problems for entrepreneurs, leading to fears of inspections and giving up on starting a business. Another major problem is the lack of funding sources and, finally, there is a problem of promotion and sale of products or services, and we want to highlight all of these obstacles in the workshops and resolve them" - emphasized Milivoje Jovanović, ENECA’s Program Manager.
In order to stimulate entrepreneurship in Serbia, NALED proposed that beginners should be exempt from taxes in the first year of business, and this measure could first be used by young people who have completed high school or faculty in the last six months, as well as those who have been registered in the National Employment Service records for more than six months.
As a basis for the implementation of this measure, NALED conducted an Analysis of tax and non-tax burden to start-ups, which showed that this measure would require budget allocations of a maximum of 1.9 billion euros, which is eight times less money than is currently being allocated for support programs.
Research performed on the examples of a hairdressing salon and an IT firm showed that starting an entrepreneurial shop requires from 4,610 to as much as 31,610 dinars, while starting a limited liability company calls for between 10,370 and 57,370 dinars. This is accompanied with monthly payment of tax obligations, which range from 145,000 to almost 400,000 dinars a year for entrepreneurs, while this amount reaches up to 180,000 dinars for a LLC.