Flat-rate tax is simple while it lasts, but sooner or later many entrepreneurs reach the point where they must (or want to) switch to keeping business books. If you’re wondering when that happens, what the deadlines are, and what specifically changes in your day-to-day operations, we explain it step by step below.

When you must switch to bookkeeping

There are several situations in which an entrepreneur loses the right to flat-rate taxation and switches to taxation based on actually earned income, that is, to double-entry bookkeeping. The most common reasons are:

Your annual turnover exceeds 6,000,000 dinars (the flat-rate limit, which also applies in 2026).
Your turnover exceeds 8,000,000 dinars over the previous 12 months, which triggers the obligation to enter the PDV system (this is a separate limit from the flat-rate one).
You begin performing a business activity that is not permitted for flat-rate taxation (e.g. advertising, trade, financial intermediation, hospitality, real estate brokerage).
Another person invests in your business (co-ownership, partnership).

It’s important to note that the 6 million dinar turnover includes all invoices issued during the calendar year, regardless of whether they have been collected, and regardless of whether the clients are domestic or foreign. If you have several registered business activities, the income is added together.

When you can switch voluntarily

You don’t have to wait until you exceed the limit. Switching to bookkeeping is also possible voluntarily, if you decide that this regime would suit you better, for example because you have high actual costs that would reduce the tax base. A voluntary switch takes effect from the beginning of the following calendar year, and you state your choice together with the tax return no later than October 31 of the current year.

Filing deadlines when you exceed the 6 million limit

When you exceed the limit of 6,000,000 dinars, the moment of the switch depends on which part of the year you crossed the threshold:

If you exceed the limit on or before June 30 — the obligation to keep business books begins on July 1 of the same year.
If you exceed the limit on July 1 or later — the switch to bookkeeping begins on January 1 of the following year.

Regardless of the basis for the switch, the tax return on form PPDG-1S is filed within 15 days from the day you begin keeping business books. The return is filed electronically, via the ePorezi portal.

If you change only your registered business activity but continue to perform one of the permitted activities, then under the principle of substance over form you are not obliged to switch before January 1 of the following year. For this reason, it’s a good idea to consult your accountant before any change.

What changes when you switch to bookkeeping

The biggest difference is that tax is no longer paid on a predetermined flat-rate base, but on actually earned income reduced by recognized expenses. This means more administration, but also the possibility of reducing your tax liability through expenses. Specifically, the following changes:

You keep business books (as a rule, under the single-entry bookkeeping system) and record every item of income and expense.
You choose a model for paying out profit: taxation under the “personal salary” system or without a personal salary (on net profit). The choice affects the amount of contributions and tax.
You keep all documentation supporting your costs (incoming invoices, statements, contracts), because expenses are recognized only with credible documentation.
If you also cross the 8 million dinar threshold, you enter the PDV system and charge PDV on your outgoing invoices.

Records you must keep

As an entrepreneur on single-entry bookkeeping, the basic records include:

The business book of income and expenses (PK-1).
A record of fixed assets and small inventory.
A record of issued and received invoices, as well as the obligation to issue e-invoices if you do business with public-sector entities or are in the PDV system.
Accounting records related to any employees and payments (if you have them).

Unlike under flat-rate tax, where you kept minimal records, you are now expected to keep orderly and timely accounting throughout the year, as well as an annual calculation of tax and contributions.

Key takeaways

The flat-rate limit is 6,000,000 dinars per year (2026); the PDV threshold is a separate 8,000,000 dinars over 12 months.
Exceeding the limit on or before June 30 means bookkeeping from July 1 of the same year; after July 1 — from January 1 of the following year.
The PPDG-1S return is filed within 15 days of starting to keep books, electronically via ePorezi.
You report a voluntary switch no later than October 31, with effect from the following year.
Under bookkeeping you pay tax on actual income reduced by expenses, so proper documentation is mandatory.

Switching from flat-rate tax to bookkeeping isn’t complicated if you prepare on time and meet the deadlines. If you need help with the filing and setting up your records, get in touch.