For many professionals who have moved to Serbia and work with foreign clients, the first question is how to legalize their activities. There are two main paths: working under the special tax regime for freelancers or registering as a sole proprietor (SP).
Paušal taxation in Serbia is a simplified system with a fixed tax rate that does not depend on the entrepreneur's actual profit. This regime is considered the simplest and most convenient, especially for freelancers, IT specialists, and consultants working with foreign clients.
For those considering opening a sole proprietorship in Serbia, understanding the local tax system is a top priority. Lump-sum taxation (paušal) is the most convenient and simplest regime for sole proprietors. Its main advantage is that the Tax Administration (Poreska uprava) independently calculates a fixed amount of taxes and issues a ready-made decision, eliminating the need for monthly calculations with an accountant.