Expat Taxes in Serbia

[!TIP] The "Paušalac" (Lump Sum) regime is the primary reason freelancers move to Serbia.

The Paušalac System

If you register as a "Paušalac" (Lump Sum taxpayer), you do not pay tax based on your actual income.

• The Mechanics: The Serbian tax authority (Poreska uprava) assigns you a fixed monthly tax bill based on your profession and the municipality where your business is registered.
• The Benefit: For IT workers or consultants in Belgrade, this fixed monthly bill is usually around €300 to €450 per month. This covers your income tax, health insurance, and pension contributions. If you earn €80,000 a year, you still only pay that fixed €400/month.
• The Cap: You can use this regime as long as your annual revenue does not exceed 6,000,000 RSD (approx. $55,000 USD). If you exceed this, you are kicked out of the lump-sum regime and must switch to bookkeeping, facing much higher corporate and dividend taxes.

The "Independence" Test

To prevent fake freelancing (where you only have one client who acts like your employer), Serbia introduced an "Independence Test" with 9 criteria. If you fail 5 or more (e.g., the client dictates your working hours, provides your laptop, and accounts for 70%+ of your income), you will be heavily fined.