Top 5 mistakes flat-rate entrepreneurs make
The most common mistakes when running a flat-rate business — from missed deadlines to incorrect statements about value added tax.
Top 5 mistakes flat-rate entrepreneurs make
Experience shows that the same mistakes are repeated over and over. Here are the most common traps to avoid.
1. Missing tax payment deadlines
Tax and contributions are paid monthly, no later than the 15th of the month for the previous month. Late payment incurs default interest.
Solution: Set reminders in the app or use our deadline calculator.
2. Crossing the VAT threshold without registering
When turnover in any 365-day period exceeds 8.000.000 RSD, the entrepreneur is required to register for VAT. The flat-rate limit (6.000.000 RSD per year) is a separate threshold — losing flat-rate status does not automatically mean switching to a DOO (limited liability company).
3. Mixing private and business finances
Paying private expenses from the business account, and vice versa, creates chaos in your bookkeeping and can attract the attention of the Poreska uprava (Tax Administration).
4. Unreported foreign-currency revenue
All revenue from foreign clients must be recorded in the KPO knjiga (revenue ledger). A foreign-currency invoice is converted at the NBS middle exchange rate on the invoice issue date. Forgetting this is one of the most common freelancer mistakes.
5. Ignoring the independence test
The independence test applies when an entrepreneur earns more than 70% of revenue from a single client. In that case the Poreska uprava can declare that an employment relationship exists, which means paying salary taxes retroactively.