A new taxation model for freelancers was adopted
The National Assembly of the Republic of Serbia adopted amendments to the Law on Personal Income Tax by which the proposal of the Working Group for the solution of the status of natural persons working on the Internet was introduced into the law.
The National Assembly of the Republic of Serbia adopted amendments to the Law on Personal Income Tax by which the proposal of the Working Group for the solution of the status of natural persons working on the Internet was introduced into the law. From 2023, natural persons who are self-taxed will have significantly more favourable tax treatment. It is with great pleasure that we point out that the Digital Community was one of the participants in the Working Group that formulated the proposed solution.
Persons who do business via the Internet continue to be defined by the Law on Personal Income Tax, Article 85, Item 18.
Specifically, this means that this taxation model is intended for natural persons for transactions that cannot be subsumed under any other category. For example, these are services that natural persons provide to other natural persons within the country or to legal and natural persons outside the country. The adopted model cannot apply to payments from legal entities within Serbia.
Individuals who are self-taxed will pay taxes and contributions on a quarterly basis.
There will be 2 taxation options, which can be chosen after each quarter. Option one is more profitable for people who earn lower incomes, or for whom doing business over the Internet is an occasional source of income. For persons who earn more than RSD 51,300 per month, the second option of the adopted proposal is more profitable. Depending on the realized income, the burden of persons who choose the second option can range from 20-25% of the total realized income.
On the example of the average monthly gross salary in Serbia, which amounts to ~104,000 RSD, the burden on natural persons who are self-taxed will amount to ~22,350 RSD on a monthly basis. Expressed as a percentage, it is 21.5% of the total earned income.
In the previous text, we presented in detail the adopted taxation models and created a calculator where you will be able to calculate the amounts of taxes and contributions in relation to the realized income.
The adopted solution represents a big shift compared to the situation two years ago, when the burden based on taxes and contributions amounted to ~45%. The adopted model implies a tax burden between 5% and 25%, depending on the choice of option and the realized income.
Individuals who do business online and generate small incomes will in the future have a way to regulate their obligations and exercise their rights without fear of a high tax burden or doing business in the gray zone. The next steps are the establishment of a portal, which will be sufficient for natural persons to manage their business, and complete fulfilment of obligations towards the state. The issue that remained unresolved is the rights of natural persons who do business via the Internet, and this is certainly the topic of advocacy of the Digital Community.
Source: aktivasistem.com