Freelancer and paušal tax in Serbia: a simple guide for foreigners

Freelancer and paušal tax in Serbia: a simple guide for foreigners

If you have moved to Belgrade to work remotely or invoice clients abroad, the freelancer and paušal tax rules in Serbia are the first piece of bureaucracy worth getting right. Serbia is genuinely friendly to independent workers, but there are two separate systems that people constantly confuse. This guide explains both in plain language so you can pick the one that fits your situation.

Two different paths: registered entrepreneur vs freelancer self-tax

The first path is registering as a sole trader, called a preduzetnik, through the Business Registers Agency (APR). The second is the freelancer self-taxation regime for individuals who receive income, usually from foreign platforms or clients, without opening a business. They are taxed differently, so decide which describes you before doing anything else.

The paušal regime for entrepreneurs

Most foreign freelancers who register a business choose paušalno oporezivanje, the lump-sum regime. Instead of tracking profit, the Tax Administration assigns you a fixed monthly amount that covers income tax and mandatory pension and health contributions. The figure depends on your activity code, the municipality where you register, and factors like age, not on how much you actually earn. For typical IT, consulting, design and writing activities in Belgrade, expect somewhere in the region of 30,000 to 60,000 RSD per month (roughly 250 to 500 EUR).

The appeal is simplicity. You keep one simple ledger of issued invoices (the KPO book), you do not file profit accounts, and the tax office sends your decision electronically through the ePorezi portal. Payments are due by the 15th of each month. Two limits matter: annual income must stay under 6,000,000 RSD to keep paušal status, and once your turnover passes 8,000,000 RSD in any twelve months you must enter the VAT system.

The freelancer self-tax models (Model A and Model B)

If you earn from abroad without registering a business, you report income quarterly through the tax authority freelancer portal and choose between two calculation models each quarter:

• Model A deducts a flat non-taxable allowance (around 110,000 RSD per quarter in current figures), then taxes the rest at 20 percent. It suits people with lower or irregular income.
• Model B deducts a smaller fixed amount plus 34 percent of gross income, then taxes the remainder at 10 percent. It usually wins once your earnings are higher and steadier.

Both models add pension contributions (24 percent) and, where you are not otherwise insured, health contributions (10.3 percent). Because the thresholds are updated periodically, run the numbers for the current quarter before filing rather than assuming last year figures.

Which one should you pick?

As a rough rule, steady earners above a few thousand euros a month tend to be better off as a paušal entrepreneur, because the monthly cost is capped and predictable. People with smaller or occasional income often prefer the freelancer regime and Model A. If you are also applying for a residence permit on the basis of work or business, registering as an entrepreneur gives you a cleaner paper trail.

Practical steps and costs

1. Decide on entrepreneur vs freelancer, and check your activity is allowed under paušal.
2. Register with APR (the entrepreneur registration fee is modest, under 2,000 RSD) and get your tax ID.
3. Open a business bank account.
4. Hire a local bookkeeper (knjigovođa). Expect around 30 to 60 EUR per month, and it is money well spent given how often rules shift.
5. Set up ePorezi access with a qualified electronic certificate.

None of this is hard, but the details change from year to year and vary by municipality. Treat the numbers here as orientation, confirm the current thresholds on the Tax Administration site or with an accountant, and you will avoid the two classic mistakes: drifting over the income ceiling and forgetting the monthly payment deadline.

For related setup, see our guides on opening a bank account, navigating Serbian bureaucracy, and coworking spaces for digital nomads.