Business slows down for a while, you move abroad, or you simply want a break – yet your flat-rate business is still “running” and your obligations keep accruing. Before you make a decision, it is important to understand the difference between dormancy (a temporary suspension) and fully closing the business, because these are not the same thing, neither in terms of procedure nor consequences.

Dormancy vs. closing – what’s the difference

Dormancy (a temporary suspension of business activity, also known as “freezing”) means the business stays in the register, keeps its PIB and all its data, but temporarily does not operate. Closing (deregistering the entrepreneur from the APR register) is a permanent termination – the business disappears from the register and, if you change your mind, you have to set it up from scratch.

Dormancy – reversible, you get back to work quickly, you keep the same PIB and your history.
Closing – permanent, requires certificates from the Tax Administration and the local administration, with no way back to the same entity.

Rule of thumb: if the break is temporary and you expect to resume, dormancy is almost always the cheaper and simpler solution.

The dormancy procedure at the APR

Dormancy is filed with the Serbian Business Registers Agency (APR). You submit a registration application to change data, along with Annex 06 – suspension and resumption of business activity. The application can be filed on paper or electronically via the APR portal.

APR fee: for a suspension/resumption application it is around 850 RSD for a paper filing and around 750 RSD for an electronic one (check the current APR fee schedule before filing, as fees are adjusted from time to time).
Minimum period: 24 hours – there is no upper limit, and you can choose between a specific end date for the dormancy or the option “until you re-register”.
Decision: the APR issues a decision on the suspension of business activity within a few (about five) business days.

Note: some sources cite somewhat higher fee amounts (around 890/780 RSD). Since the APR changes its fee schedule, the only authoritative figure is the official APR fee schedule on the day of filing.

Obligations during dormancy

The biggest advantage of dormancy is that your current obligations stop. For flat-rate entrepreneurs the following applies:

Flat-rate tax and contributions: during the dormancy period, no new obligations arise for flat-rate tax and contributions. The Tax Administration assesses obligations by decision based on data from the APR, and since 1 January 2023 flat-rate entrepreneurs are not required to file a tax return.
Old debts are not written off: existing debts remain and can be rescheduled, but they are not cancelled simply by going into dormancy.
Length of service: if you want the dormancy period to count toward your length of service, you can voluntarily continue paying PIO and health insurance contributions.
Employees: if you have staff, dormancy is not grounds for automatic termination of employment – you must resolve their contracts separately (by mutual agreement or as redundancy with severance pay).

Resumption of work is filed in the same way – a registration application with Annex 06, with the APR fee paid again. In practice, you can resume business very soon after filing the resumption application.

The procedure for closing (deregistering) the business

Closing is a more serious step because it first requires you to prove that you have no outstanding obligations. The order matters, because the certificates have a short validity period.

Tax Administration certificate – confirmation that there are no outstanding obligations for income tax on self-employment and contributions.
Local tax administration certificate – confirmation that there are no outstanding local fees and charges.
Registration application to deregister the entrepreneur along with proof of payment of the APR fee.

Key warning: neither certificate may be older than five days at the moment you submit the deregistration request. Since the Tax Administration and the local administration issue certificates at different speeds, it can easily happen that one “expires” while you wait for the other – so coordinating the timing saves you from having to obtain the paperwork all over again.

The APR fee for deregistering an entrepreneur is around 1,300-1,400 RSD according to available sources – verify the exact amount in the official APR fee schedule on the day of filing.

Obligations after deregistration

Deregistration from the APR does not mean the work is entirely done. A flat-rate entrepreneur also has a tax obligation after termination:

PPDG-1R tax return – flat-rate entrepreneurs file this return electronically upon the termination of business activity, typically within 30 days. Verify the deadline and form with the Tax Administration, as they depend on the grounds for termination.
Settling final obligations – any remaining obligations under the decision should be paid so that the procedure does not stall.

Key takeaways

Dormancy is temporary and reversible; closing is permanent deregistration from the register.
Dormancy is filed with the APR (registration application + Annex 06); the minimum period is 24 hours.
During dormancy, no new flat-rate tax and contribution obligations accrue, but old debts remain.
During dormancy, you can pay contributions voluntarily so that your length of service keeps accruing.
For closing, you need a certificate from the Tax Administration and from the local administration – no older than 5 days.
After deregistration, a flat-rate entrepreneur files the PPDG-1R (usually within 30 days).
Verify all fees and deadlines in the official APR fee schedule and with the Tax Administration on the day of filing.

If you are not sure whether dormancy or closing is the better choice for you, or you want the paperwork to go through without errors and without re-obtaining certificates – get in touch, we are happy to help.