Accountants and car mechanics eligible for lump-sum tax payment – Online tax calculator presented

All entrepreneurs in Serbia that the lump-sum tax payment applies to, or beginners who are planning to start a business, are now able to calculate their tax obligations for the next four years at the www.jpd.rs portal. In line with the new features in the Draft Decree on Lump-sum Tax Payment, which is expected to be adopted by the end of the year and which should start being implemented on January 1, 2020, accountants, but also the entire automotive industry sector, including car mechanics, will be eligible for lump-sum tax payment.

The most important change for the 117,000 lump-sum taxpayers in Serbia is the automation of the procedures, the reduction of the bureaucracy and an increased predictability regarding the defining of tax obligations.

– The Ministry of Finance has received a lot of complaints pertaining primarily to the transparency of the whole process of lump-sum tax payment, as well as the speed of preparing and issuing the decisions – said Dragan Demirovic, assistant finance minister.

The reform of the system of lump-sum tax payment eliminates the use of paper and all decisions are issued to taxpayers electronically. Before they open an enterprise, they can use the digital calculator to determine the height of the tax they need to pay.

– An application software will be installed on the Tax Administration portal, where, by entering a few crucial elements, all taxpayers can see what their monthly tax obligations will be if they open an enterprise. This will also eliminate complaints by taxpayers saying that they didn't know the amount of taxes and contributions awaiting them if they chose to open an enterprise – said Dragan Agatunovic of the Tax Administration.

The calculator, created in line with the future formula, was presented in Belgrade at the second of the four round tables where the draft decree is being presented to the public.

The illustrative calculator was developed by the NALED in cooperation with the Tax Administration within the four-year Project for the Public-Private Dialogue for Development financed by the USAID.

– All entrepreneurs will be protected in the sense that the tax obligation will not grow by more than 10% compared to the previous period for anyone, and many of them will also be eligible for certain exemptions, primarily those under 30 and beginners in business – said Dusan Vasiljevic of the NALED.

In the next three years, tax obligation cannot be increased by more than 10% a year, and for certain entrepreneurs, they will be reduced by 30% and more thanks to the new tax calculation formula.

A range of incentives is also planned, such as the reduction of tax bases during the first three years of operations and for entrepreneurs under 30 and over 55, new mothers, people with disabilities and people with long-term illnesses.

The round tables organized by the NALED and the Ministry of Finance are planned for November 28 in Nis and December 3 in Kragujevac.

The reform of the system of lump-sum taxation was launched in late 2018, when the government formed the Task Force, which was to propose changes that would improve the operations of entrepreneurs and the competent institutions. The Task Force then sent the recommendations to the government.

A PDF of the draft decree (in Serbian) can be found at the bottom of the article.

Changes in acquiring lump-sum taxpayer status

The Government of Serbia has announced amendments to the Law on Personal Income Tax and the Law on Contributions for the Mandatory Social Insurance, which will feature an independence test for entrepreneurs who pay lump-sum tax. The plan was for these amendments to come into effect on January 1, 2020, but the implementation has been postponed for March 1. The independence test, as announced, will feature nine criteria testing the entrepreneur's independence relative to the employer, and more about it can be found in a separate article.

The Ministry of Finance has updated five of the nine proposed criteria in order to make the implementation more precise and eliminate the room for liberal interpretations which could unfairly imply a lack of independence.

The Government of Serbia has announced tax incentives for new employments at companies which are increasing the number of employees, including the employment of young people who are just entering the labor market, as well as legal security concerning the legal tax treatment in hiring entrepreneurs. The Digital Serbia Initiative and the Vojvodina ICT Cluster took part in preparing the new set of measures which will accompany the independence test.

I. Milovanovic
Click here for the PDF.

NALED

Ministarstvo finansija Republike Srbije

Poreska uprava Srbije

Dragan Demirović

Dragan Agatunović

Dušan Vasiljević

Draft Decree on Lump sum Tax Payment

lump sum tax payment

lump sum tax payers

e government

tax reform

tax

taxpayers

business operations of lump sum taxpayers

Task Force for improvement of lump sum tax payment

Law on Contributions for the Mandatory Social Insurance

independence test

Law on Personal Income Tax

independence test for entrepreneurs lump sum tax payers