Flat-Rate Limit in Serbia 2026: 6 Million, 8 Million VAT Threshold
The flat-rate entrepreneur limit in Serbia for 2026 is RSD 6,000,000 of turnover in a calendar year. There is a second threshold that is often confused with it: the VAT registration threshold of RSD 8,000,000 over the previous 12 months. These are two different limits, counted in two different ways, with two different consequences. The short answer: if you exceed 6 million, you lose flat-rate (pausal) status and move to bookkeeping. If you exceed 8 million, you must file for VAT within 5 days and flat-rate status ends immediately. Below: how each limit is counted and what to do as you approach the line.
Two limits that keep getting mixed up
The first comes from the Personal Income Tax Law and defines who may be taxed on a flat-rate basis. The second comes from the VAT Law and defines who must register for VAT.
| Limit | Amount | Period | Consequence |
|---|---|---|---|
| Flat-rate limit | RSD 6,000,000 | Calendar year, January 1 to December 31 | Loss of flat-rate status, transition to books |
| VAT threshold | RSD 8,000,000 | Previous 12 months (365 days), rolling | Mandatory VAT registration within 5 days |
The key difference is the period: the flat-rate limit resets every January 1, while the VAT threshold is a rolling 12-month window that never resets.
How the 6 million limit is counted
Flat-rate taxation is available to an entrepreneur whose total turnover in a calendar year does not exceed RSD 6,000,000. Turnover is tracked in the KPO book that every flat-rate entrepreneur must keep, and everything earned from the business counts: invoices to Serbian and foreign clients, cash sales and platform payments. Foreign currency receipts are converted into dinars at the National Bank of Serbia middle rate on the date of receipt.
How the 8 million VAT threshold is counted
The VAT threshold follows the VAT Law. You add up the total supply of goods and services in the previous 12 months, regardless of the calendar year. Sales of equipment and premises used for the business are excluded, as are supplies exempt from VAT without the right to deduct input tax. Services to foreign clients do count toward the threshold, even though no Serbian VAT is charged on them. We covered the threshold, procedure and deadlines in our guide to VAT registration in Serbia.
What happens when you exceed 6 million
Crossing 6 million does not mean extra tax on the excess. It means you lose flat-rate status and move to taxation of actual income, with full bookkeeping.
From when you keep books
- If you cross the limit in the first half of the year (by June 30), you keep books from July 1 of the same year.
- If you cross it in the second half (July 1 to December 31), you keep books from January 1 of the following year.
Until then you remain a flat-rate entrepreneur and invoice as usual. From the transition date you file the PPDG-1S return and pay 10% tax on profit.
Self-assessment or personal salary
Once on books, you choose between self-assessment (contributions on the entire taxable profit) and personal salary (contributions on a salary you set, remaining profit taxed at 10%). For most entrepreneurs with higher income, personal salary is the logical choice. An entrepreneur who loses flat-rate status can elect it right after the transition, within a short deadline, so do not postpone this step.
What happens when you exceed 8 million
Crossing the VAT threshold triggers a stricter procedure with shorter deadlines.
- File the VAT registration form (EPPDV) through the ePorezi portal within 5 days of the day you crossed RSD 8,000,000.
- You become a VAT payer from the day after crossing and charge 20% VAT on domestic invoices (10% at the reduced rate).
- Flat-rate status ends immediately. A VAT payer cannot be a flat-rate entrepreneur, so you keep books from the same date, without waiting for July 1 or January 1.
- You enter the electronic invoicing system (SEF) and file VAT returns. In the current and the following calendar year, the tax period is the calendar month.
- You can elect personal salary immediately.
Registration rules are published by the Tax Administration of Serbia.
Example: how 8 million speeds things up
An entrepreneur starts in January 2026 with RSD 700,000 of turnover per month. In September she passes 6,000,000 (second half of the year), so she would keep books from January 1, 2027. But in December her 12-month turnover passes 8,000,000. That day the VAT obligation arises: EPPDV within 5 days, VAT on invoices from the next day, books immediately. Her flat-rate status ends in December 2026, not on January 1, 2027.
The proposal to raise the limit to 8 million: where it stands
In late May 2026 the Ministry of Finance published draft tax laws, and public consultation ran from June 1 to June 21, 2026. During the consultation, business associations proposed raising the flat-rate limit from 6 to 8 million dinars. As of this writing (September 22, 2026) the proposal has not been adopted. The published draft still states RSD 6,000,000, and the consultation report has not been released. Media mention January 1, 2027 as a possible start date, without official confirmation. Until an amendment is adopted and published in the Official Gazette, the 6 million limit applies. Plan by the current rule.
Turnover tracking checklist
- Keep the KPO book up to date, at the latest at the end of each month.
- Keep two columns: turnover since January 1 (for the 6 million limit) and turnover for the last 12 months (for the VAT threshold).
- Record foreign currency receipts in dinars at the NBS middle rate on the date of receipt, not at your bank rate.
- Set an internal alarm at RSD 5,000,000 for the year and RSD 7,000,000 for 12 months. That gives you time to decide.
- Before a large invoice, check where you stand. One invoice in December can push you over both limits.
Common mistakes
- Mixing up the calendar year and the rolling 12 months, so the VAT threshold is only checked in January.
- Believing that a "penalty tax" is paid on turnover above 6 million. There is none, but flat-rate status is lost.
- Filing the VAT registration late. The deadline is 5 days, and late registration brings misdemeanor liability plus VAT on invoices issued without VAT in the meantime.
- Forgetting that services to foreign clients count toward the VAT threshold even though no VAT is charged on them.
Frequently asked questions
Does the 6 million limit refer to collected or invoiced turnover?
It refers to turnover recorded in the KPO book, meaning income from services rendered and goods sold. In practice this is recorded based on issued invoices and fiscal receipts.
Can I return to flat-rate taxation after crossing the limit?
Yes. If you meet the conditions in a following year, you can reapply for flat-rate taxation, as a rule by October 31 for the next year. If you are in the VAT system, you must first leave it, which we describe in our article on leaving the VAT system in Serbia.
Can I register for VAT voluntarily before 8 million?
You can, but as a flat-rate entrepreneur you lose that status. Voluntary registration mainly makes sense for businesses with large input VAT, as explained in our article on voluntary VAT registration in Serbia.
How NOTA GROUP can help
If you are approaching either limit, we go through the numbers with you, calculate what the move to books with personal salary would cost and file everything on time. Our tax consulting covers the entire transition, from the KPO book to the first VAT return. Book a consultation, bring your figures and we will prepare the plan.
