Flat-rate taxation is the simplest regime for freelancers and small entrepreneurs in Serbia, but it has a clear ceiling. Once your annual income exceeds 6,000,000 RSD, you lose the right to flat-rate taxation and must switch to double-entry bookkeeping. In this article we explain exactly what happens at the crossover, when the new obligations kick in, and why there is also a separate PDV threshold of 8 million.

What the RSD 6,000,000 limit is

The 6,000,000 RSD limit is the upper income ceiling that a flat-rate entrepreneur may earn during a single calendar year while still keeping the right to flat-rate taxation. This limit is observed on a calendar basis, from 1 January to 31 December, and it covers total turnover, meaning both income from domestic clients and income from foreign clients.

It is important to understand that the right to flat-rate taxation also depends on the turnover in the previous year. If your total turnover in the year preceding was greater than 6,000,000 RSD, the law means that flat-rate taxation cannot be granted to you for the following year.

What happens when you cross 6 million

When you cross the limit during the year, the Tax Administration revokes your right to flat-rate taxation and you switch to taxation based on actually earned income, which means keeping business books. The moment when you have to start keeping books depends on when you crossed the threshold:

If you cross the limit by 30 June of the current year, bookkeeping begins on 1 July of the same year.
If you cross the limit after 30 June, bookkeeping begins on 1 January of the following year.

The start of bookkeeping is determined by a decision of the competent tax authority. After switching to books, you file a tax return on form PPDG-1S, within 15 days of the date set for the start of bookkeeping, that is, from the date stated in the decision.

Switching to books in practice

Switching to books means you no longer pay a fixed flat-rate liability, but instead tax and contributions based on actually earned income and expenses. This brings several new obligations:

Keeping business books (most often single-entry bookkeeping for entrepreneurs), with the engagement of an accountant.
Recording all income and expenses, along with keeping supporting documentation.
A choice of taxation method: as an entrepreneur who is taxed on realized profit or as an entrepreneur on a personal salary.
Filing an annual tax return and, during the year, paying advance payments of tax and contributions.

For many freelancers, switching to books is not necessarily bad news. If you have significant business expenses, taxation on actual income can turn out to be more favorable than flat-rate, because you pay tax on the difference between income and expenses, rather than on a presumed tax base.

The PDV threshold of RSD 8,000,000 is something else

The 8,000,000 RSD limit is often confused with the 6 million limit, but these are two completely different things. The 8 million threshold relates to the obligation to enter the PDV system, not to the loss of flat-rate status.

The 8 million limit is not observed on a calendar basis, but over the last 365 days (a rolling period), so the threshold keeps moving forward.
When in any 12-month period you cross 8 million RSD of turnover, you become a PDV taxpayer and must register in the PDV system.
Entry into PDV automatically ends the right to flat-rate taxation, so at the same time you also switch to keeping books.

An important note for foreign freelancers and those who work for foreign clients: as a rule, domestic turnover counts toward the 8 million limit, while turnover from services with a place of supply abroad is treated differently. Since the rules on the place of supply of services can be complex and depend on the specific situation, this is a point on which it is worth consulting an accountant before drawing a conclusion.

Because of the difference in how they are calculated, it is possible to cross the 8 million threshold even though you have not crossed 6 million in the calendar year, and vice versa. That is why both limits should be tracked separately.

Key takeaways

The 6,000,000 RSD limit: calendar year, includes domestic and foreign turnover, loss of the right to flat-rate taxation.
Cross it by 30 June: books from 1 July of the same year. Cross it after 30 June: books from 1 January of the following year.
After switching to books, you file PPDG-1S within 15 days.
The 8,000,000 RSD limit is the PDV threshold, observed over the last 365 days and tracked separately.
Entry into PDV also ends flat-rate status and means switching to books.

The amounts and deadlines stated in this article refer to the rules in force in 2026 and do not constitute tax advice or a guarantee. If you need help with switching to books or tracking the limits, get in touch with us.

What the RSD 6,000,000 limit is

What happens when you cross 6 million

Switching to books in practice

The PDV threshold of RSD 8,000,000 is something else

Key takeaways

Sources