Good News for Flat-Rate Entrepreneurs: 10% Cap on Tax Base Growth Extended Until the End of 2027
The Government of the Republic of Serbia has decided to extend the application of the cap under which the tax base for flat-rate (lump-sum) entrepreneurs may increase by no more than 10% annually until the end of 2027. This measure is one of the recommendations actively advocated by NALED’s Small Business Council in its dialogue with the Ministry of Finance. The extension was confirmed through amendments to the Regulation on Flat-Rate Taxation and represents significant relief for more than 170,000 flat-rate entrepreneurs in Serbia, enabling more predictable and stable business operations.
“The extension of the cap on tax base growth until the end of 2027 is an important signal of support for entrepreneurs. It allows them to plan their business activities without fear of sudden tax burdens, which is particularly important in the current climate of economic uncertainty. We would like to thank the Ministry of Finance for its openness and constructive approach in dialogue with entrepreneurs, which has made it possible for the needs of small businesses to be better taken into account,” said Irena Đorđević Šušić, Head of NALED’s Innovation and Entrepreneurship Unit.
From the perspective of the Small Business Council, there is room for further improvements in the position of flat-rate entrepreneurs, including the introduction of consolidated payment of taxes and contributions to a single account instead of four separate accounts, enabling flat-rate entrepreneurs who exceed the six-million-dinar threshold to opt for the personal income payment regime via the Tax Administration’s application, and increasing the revenue threshold that allows entrepreneurs to remain in the flat-rate taxation regime.
“We have a good example from the region—this year Croatia aligned the flat-rate taxation threshold with the VAT registration threshold, raising it from €40,000 to €60,000. This approach takes inflationary trends into account and reduces the risk of errors and confusion caused by having two different thresholds,” emphasized Sofija Popara Parmarković, founder of Clever and Chair of the Working Group for Traditional Entrepreneurship within NALED’s Small Business Council.
The 10% annual cap on tax base growth will not apply in cases where a flat-rate entrepreneur changes their activity code, municipality, or place of registration, except in situations where the municipality changes within the same city.
It should be recalled that the reform of flat-rate taxation began in 2019 when, at the initiative and with the support of NALED, and under the leading role of the Ministry of Finance and the Tax Administration, a transparent formula for calculating tax liabilities was introduced. By using the Flat-Rate Tax and Contributions Calculator available on the Tax Administration’s website (purs.gov.rs), flat-rate entrepreneurs can calculate their obligations in advance. At that time, the practice of delivering final tax assessments at the beginning of the year was also introduced, meaning that flat-rate entrepreneurs no longer have to pay advance installments during the year or worry about additional payments once final assessments are issued. Since 2020, tax assessments have been delivered exclusively in electronic form via the tax inbox on the eTaxes (ePorezi) portal.
