Impact of the Amendments to Tax Laws on the position of the Internet workers – freelancers in Serbia
When the National Assembly of the Republic of Serbia adopted the Amendments to the various Tax laws in December the goal, among others, was to successfully regulate the taxation of internet workers – freelancers.
Until the end of 2022, the regime was merely transitional, and as such regulated that for the revenue income, starting from 2015 and ending on December 31, 2022, income taxation shall be regulated based on the agreed remuneration from copyrights and related rights and the agreed remuneration for the work performed, for which taxes and contributions were to be paid by self-taxation. Namely, for example, the transitional regime did not stipulate an obligation to pay taxes and contributions on these types of revenue incomes (from copyrights and related rights) when remuneration is under 384.000,00 RSD per calendar year, and offered certain benefits when paying taxes and contributions for higher amounts.
Now, with the adopted Amendments, the intention is to offer two alternative methods.
The first method would be more convenient for those natural persons that realize income in lower amounts and irregular incomes. The income tax base will be the difference between the sum of three months of incomes (quarterly) and the fixed standard expenditures in the amount of 96.000,00 RSD. After the difference has been calculated for these amounts, the taxes are paid at the rate of 20% and contributions at the rate of 24%.
The second method, is prescribed for those natural persons that realize income on a more regular basis with higher amounts. Specifically, the income tax base shall be the difference between the sum of three months of incomes (quarter) reduced by the standard expenditures over three months, in the amount of 57.900,00 RSD, and standard expenditures of 34% of the realized amount of incomes. After the difference has been calculated, taxes for these amounts are paid at the rate of 10% and contributions at the rate of 24%.
In addition, and regardless of whether the taxpayers should opt for the first or second of the above stated, there are alternative methods, namely the internet workers – freelancers would be paying taxes retroactively which, from their standpoint, is questionable to say the least.
The above stated Amendments should contribute to a greater push against so-called “grey economy”.
As the Amendments provoked a great number of questions and reactions, it may be advisable to consider whether it is more beneficial to remain a freelancer or to change a business model by registering and setting up a company.
For more information regarding the interpretation and implications of these changes on your business, contact us at office@vuliclaw.com