Registering a flat-rate business seems complicated until you realize it’s essentially just a few clear steps. The biggest trap isn’t the paperwork, but a single missed click during setup that can cost you a whole year of double-entry bookkeeping. In this guide you’ll get the sequence of steps, the business activity code, the fees and the deadlines, all backed by official sources.

Can you even qualify as a flat-rate entrepreneur?

Flat-rate taxation is a simplified regime in which you don’t keep business books; instead you pay a predetermined tax and contributions based on a ruling from the Tax Administration. Before you start the registration, check whether your planned business activity can be taxed under the flat-rate regime at all, because certain activities are excluded from this regime by law.

There is also an income limit: if you exceed the legal threshold during the year, you lose the right to the flat-rate regime and switch to double-entry bookkeeping. That’s why it’s smart to check your business activity and your income estimate with an accountant before you set up the business.

Step 1: Choose your business activity code

The business activity code represents your predominant (primary) activity and is chosen when you submit the registration application for setting up the business. It’s the activity from which you expect the most income, though in practice you can also carry out other work. The code directly affects whether you can be a flat-rate entrepreneur and which group the Tax Administration places you in for the assessment, so it’s worth choosing carefully.

Freelancers in IT most often choose the code for computer programming (62.01).
Designers, marketers and consultants have their own corresponding codes.
If you’re not sure, consult an accountant before submitting the application.

Step 2: Submit the application to APR

An entrepreneur registers with the Business Registers Agency (APR), and this can be done in two ways: electronically via the portal (ereps.apr.gov.rs) or by submitting a paper application. For the electronic application you need a qualified electronic certificate (electronic signature), an installed card reader and a payment card to pay the fee.

The registration (setup) fee for an entrepreneur is 2.500 RSD, and this applies to both the paper and the electronic application (the fee was increased from the earlier 1.560/1.670 RSD). As a rule, APR processes the application within a few business days if there are no deficiencies in the documentation.

Step 3: Opt for the flat-rate regime immediately, on the spot

This is the most important part of the whole process. When you set up the business, you must indicate your choice of flat-rate taxation at the very moment of registration with APR. APR forwards that request to the Tax Administration. If you miss this, the consequence is very concrete: as a newly established entrepreneur you will have to keep business books in the year of setup, and you can only claim the right to the flat-rate regime starting from the following year.

In other words, a single missed click means a year of double-entry bookkeeping. So before submitting the application, double-check that the field for flat-rate taxation is ticked.

Step 4: Wait for the ruling and open an account

After APR registers the business, the Tax Administration issues a flat-rate taxation ruling stating how much you pay monthly in tax and contributions. In parallel, as an entrepreneur you are obliged to open a business (current) account at a bank, which you’ll use for your operations.

In practice the whole process, from submitting the documentation to being ready to operate, usually takes between seven and twenty days, depending on the processing speed and whether the application is free of deficiencies.

Payment deadlines and switching to the flat-rate regime later

Once you receive the ruling, you pay tax and contributions by the 15th of the month for the previous month. If the ruling arrives late, you settle the outstanding months within the period stated in the ruling, so it’s a good idea to check the amounts and the payment accounts as soon as you receive it.

A special case arises if you already operate under the self-assessment system (you keep books) and you want to switch to the flat-rate regime from the following year. In that case you submit the request for flat-rate taxation electronically via the Tax Administration portal (ePorezi), no later than 31 October of the current year. After that deadline, switching for the following year is no longer possible.

Key takeaways

First check whether your business activity can be taxed under the flat-rate regime and whether you’re within the income limit.
The business activity code is chosen at setup and affects your right to the flat-rate regime and the tax assessment.
The registration fee for an entrepreneur at APR is 2.500 RSD (paper and electronic), according to the current price list.
The choice of the flat-rate regime MUST be ticked at the moment of registration with APR, otherwise you keep books for a year.
Tax and contributions are paid by the 15th of the month for the previous month.
Switching from self-assessment to the flat-rate regime for the following year: request via ePorezi by 31 October.

If you need help choosing a business activity code, with registration, or with opting for the flat-rate regime, get in touch with us.