How legal work starts
A freelancer in Serbia most often works as a sole trader under lump-sum taxation: a fixed monthly amount of tax and contributions that does not depend on actual income. That regime suits precisely those who work for foreign clients and are paid in foreign currency: accounting is simple, the payment is predictable and reporting comes down to a few forms. The main constraint is annual turnover of no more than six million dinars.
The independence test
The key question in an inspection is whether the sole trader works for a single client as a disguised employee. If signs of dependence are present — one client, personal performance of work under the client's instructions, payment for time rather than results, use of the client's equipment — the tax authority can reclassify the relationship and assess taxes and contributions with interest. The practical conclusion is simple: for the regime to be stable, it is best to have several clients, organise the work independently and be paid for results rather than for availability.
How to receive money from abroad
Payments go to the trader's account: a foreign-currency account can be opened at a Serbian bank, and some clients pay through payment services. Income earned abroad is taxed in Serbia, and under the lump-sum regime the amount of tax and contributions is already fixed, so no extra tax arises as turnover grows — as long as the limit is not exceeded. It matters to keep documentation properly: each service needs an invoice, and receipts must be explainable if the tax authority asks for clarification.
What it costs per month
The size of the lump-sum payment depends on the activity, the city category and seniority, and on whether the contribution reduction for the first year of work applies. For most freelancers the amount falls within tens of thousands of dinars a month, and the first months after registration often pass with allowances. Contributions make up the main part of that sum: they provide pension and health records, so saving on them through grey schemes makes no sense: you lose the record and the insurance.
If the limit is exceeded
On crossing the threshold of six million dinars the sole trader loses the right to the lump sum and moves to regular taxation, where tax is calculated on actual profit and full expense records are needed. It is worth preparing for that in advance: either watch turnover and stay within the limit, or switch to another form in time — for example, set up a limited liability company and work through it. You cannot move to the lump-sum regime at any moment: the application is filed by the end of October of the previous year, and that deadline is often missed.
A second route: freelancer self-assessment
If the money comes from foreign clients and you would rather not set up a business, there is a separate regime — freelancer self-assessment. It was introduced by the amendments to the personal income tax law adopted in December 2022, and works like this: income from a foreign client is declared by the person themselves, quarterly, through the state portal for freelancers. The regime grants no special status and does not replace residence — it is only about taxes, and working without residence status is still a violation.
The calculation follows one of two models. The first: fixed recognised costs of 110,647 dinars per quarter and a 20 per cent rate — better for smaller or irregular incomes. The second: recognised costs of 66,733 dinars plus 34 per cent of income and a 10 per cent rate — better for larger and steady receipts. The amounts are indexed once a year, so current values are checked on the portal before calculating. Pension contributions are mandatory, health contributions apply if you are not insured on another ground, and both are payable even in a quarter where no tax arose.
Filing is quarterly: for the first quarter by 30 April, the second by 30 July, the third by 30 October and the fourth by 30 January of the next year. Foreign-currency income is converted into dinars at the official rate on the day of receipt. This route suits irregular income or a reluctance to open a business, but it does not remove contributions and does not exempt you from having lawful residence status.
What has to be filed, and when
Even with a fixed tax there are obligations: registration, monthly payments, annual reporting within set deadlines and electronic communication with the tax office through its services. A missed payment brings interest, and improperly issued invoices raise questions in an inspection. So for a freelancer discipline matters more than complex bookkeeping: set reminders, pay on time and keep documents for every service. If you are just starting, it is sensible to pay once for an accountant's consultation to check your activity and choose the right regime: a mistake in choosing the form takes longer and costs more to fix than the consultation does.