Serbia Self-Employed — PPDG-1R / PPDG-1S & PP GPDG Return

Establish the client's entrepreneur type (bookkeeping / paušalno / freelancer foreign-income), VAT (PDV) registration status, and residency. The regime determines every downstream form, rate, and deadline. Confirm whether the client holds a valid paušalno decision (rešenje) from Poreska uprava or is on actual-income bookkeeping (PPDG-1R), and whether annual turnover is within the RSD 6,000,000 flat-rate cap.

Gather all income records for the calendar year: bank statements from all Serbian and foreign accounts (Banca Intesa, OTP, Raiffeisen, Wise, Revolut), issued invoices (KPO book for paušalci), and platform payouts (Upwork, Fiverr, Stripe, PayPal, Payoneer). For bookkeeping entrepreneurs also collect the full ledger and purchase invoices. Identify and exclude own-account transfers, PDV liability payments, and loan repayments before summing business revenue.

For entrepreneurs on the actual-income (bookkeeping) regime, classify all debit transactions against the allowable-expense patterns: office rent, accountancy fees, software subscriptions, business travel, marketing, and bank charges. Apply home-office and vehicle apportionment conservatively (default 0% for mixed-use until documented). Disallow personal drawings, fines, income-tax payments, and private expenses. Compute taxable profit = revenue minus allowable expenses.

Compute mandatory social-security contributions for the tax year. Self-employed entrepreneurs pay both the employee and employer portions themselves: PIO (pension) 24% + health insurance 10.3% + unemployment 0.75% = 35.05% total. Apply the 2025 monthly floor (RSD 45,950/month) and ceiling (RSD 656,425/month) to the contribution base. For paušalci the Tax Administration sets the monthly contribution amount in the rešenje — reconcile actual payments made via ePorezi against that schedule.

Prepare and review the entrepreneur annual income-tax return. Bookkeeping entrepreneurs file PPDG-1R (actual income); flat-rate entrepreneurs file PPDG-1S (deemed base as per rešenje). The 10% income-tax rate applies to the taxable profit (bookkeeping) or the deemed flat-rate base. Verify the pre-populated data in ePorezi matches the computed figures, correct any discrepancies, and confirm the filing deadline. From 2026, entrepreneur annual returns are electronic-only.

Determine whether the annual supplementary tax applies. For 2025 income, the threshold is RSD 5,439,096 (3× the average annual salary of RSD 1,813,032). If total net income from all sources exceeds this threshold, prepare Form PP GPDG. Band 1 (RSD 5,439,096–10,878,192) attracts 10%; Band 2 (above RSD 10,878,192) attracts 15%. Apply the personal deduction (RSD 725,213), per-dependent deduction (RSD 271,955 each), and the youth relief reduction (RSD 5,439,096 for taxpayers under 40). Filing deadline: 15 May 2026 for 2025 income.

Conduct a final practitioner review of all returns before submission. File PPDG-1R or PPDG-1S and PP GPDG (where applicable) electronically via ePorezi. The filing and payment deadline for PP GPDG is 15 May 2026 (for 2025 income). Confirm contribution payments are fully settled. Provide the client with a signed computation letter, copies of filed returns, and a payment schedule for any balance due. Advise on the 10% base-growth cap implications for the next paušalno rešenje cycle.