On 12 October 2026, the Serbian Tax Administration clarified the conditions under which lump-sum taxation entrepreneurs (paušalci) may voluntarily transition to full double-entry bookkeeping without losing their simplified tax status. The guidance interprets Article 78 of the Law on Personal Income Tax and the accompanying Rulebook on Lump-Sum Taxation, confirming that the critical trigger is the annual turnover threshold of 6 million RSD. If the entrepreneur’s total revenue in the preceding calendar year does not exceed this limit, they may opt for standard accounting while remaining in the lump-sum regime, provided they notify the competent tax authority within the statutory deadline. The clarification resolves prior ambiguity where practitioners feared that adopting full bookkeeping automatically implied a switch to the self-assessment regime. The Tax Administration also reminded taxpayers that once the option is exercised, it binds the entrepreneur for a minimum of three fiscal years, aligning with the stability principle in Article 81 of the Law.
Key Takeaways
- Voluntary Opt-In Permitted: Lump-sum entrepreneurs with annual turnover below 6 million RSD may adopt double-entry bookkeeping without forfeiting the simplified tax regime, enhancing financial transparency and creditworthiness.
- Three-Year Lock-In Period: The election is irrevocable for three consecutive tax years, requiring careful strategic assessment of administrative costs versus benefits such as input VAT recovery and improved banking terms.
- Notification Deadline Critical: Taxpayers must submit the prescribed notification form to the local tax office before the start of the fiscal year in which the change takes effect; late filing results in automatic continuation of the existing lump-sum method.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement