How can an Umbrella Company Help with Contracting in Serbia?
Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. There are companies who specialise in helping workers make the most out of their contracts.
They’re called Umbrella Companies (or, contractor management companies).
Basically, an Umbrella Company acts as your full-time employer, even though you maintain your independence as a contractor. They collect and filter payments from your clients, filtering out the necessary social security and fees. You send them your timesheets, and they send you payments.
Because they act as your “employer,’ they can sponsor you and provide a single work permit for multiple contracts in Serbia. Even better, most are experts in Serbia and expat tax law, meaning they’ll also help you optimise your earnings in Serbia.
Although the Umbrella Company is technically your “employer,” you’re essentially freeing yourself to work even more independently. You still dictate your contracts, your hours, your schedule. The Umbrella Company simply filters out the time-consuming admin and immigration issues, allowing you to focus on your new contract.
Can I Organise My Taxes and Work Permit Myself?
Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for Serbia.
If you’re working independently, it can be difficult to find clients willing to sponsor you. Moreover, even if your client can do this, you’ll need a new sponsor each time you decide to take on a new contract. Of course, every new sponsor will mean more paperwork.
Also, are you familiar with the intricacies of the tax system in Serbia, as well as your own country’s laws on overseas earnings? If so, good on you!
However, if you’re like the rest of us, figuring out (much less reducing) your tax liability in Serbia and your home country can seem like full-time work in itself.
A Contractor’s Guide to Taxes in Serbia
One of the most consistently challenging aspects of contracting in Serbia is complying with the country’s tax system. As well as paying tax in Serbia, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.
How do I calculate my taxable income in Serbia
If you’re working in Serbia under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Serbia for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Serbia, but contractors may not be offered this service because of their short stay with each employer.
Anybody who can’t pay their tax in Serbia through PAYE is left with the prospect of doing everything themselves.
Do you know much about Serbian Tax Law? Does Serbia have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Serbia can range from 0 to 15 percent, and you need to be sure you are placed in the correct tax brackets.
Tax Filing as a Contractor in Serbia
| When Do You Need to Lodge Your Tax Return? | After the calendar year (31 December) |
| Tax Filing Deadline | 15 May |
| Can you file it online? | Yes, https://eporezi.poreskauprava.gov.rs/user/login.html?back=/ |
How to File Taxes in Serbia as a Contractor
Filing taxes in Serbia involves the following:
Step 1: Download and install the ePorezi application here(link is external). Afterwards, you will be able to enter the e-Taxes portal.
Step 2: Fill out an electronic identification. To do this, you would require a qualified electronic certificate with a chip, issued by one of the certification bodies in Serbia. In the process of registering for this, you will also receive a card reader with a chip. Alternatively, your electronic certificate may be stored on a USB. More information may be found here(link is external).
Step 3: Insert your qualified electronic certificate into the card reader or the USB.
Step 4: Enter your pin and then click the log-in button.
Step 5: After logging in, select the taxpayer whom you’re authorised to file a tax return for.
Step 6: Select the tax return that you want to file. For personal income tax return, it is the PPDG-2R form.
Step 7: Submit your tax return.
Additional Information
- Ministry of Finance: https://www.mfin.gov.rs/en/services-2/faq-2
- Video instructions on how to submit tax application online: https://www.purs.gov.rs/en/E-taxes/Information.html(link is external)
Tax Figures in Serbia
| Currency | Serbian Dinar (RSD) | ||||||||
| Tax-free Threshold in Serbia | RSD 2,375,136 | ||||||||
| Income Tax Rates |
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| Notes | Tax rates on other income:
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Tax Residency in Serbia
When do you become a tax resident in Serbia
You become a tax resident in Serbia when:
- You have domicile, residence or centre of business and lie interests in Serbia, or
- If you spend more than 183 days within a 12-month period in Serbia.
Does the 183 day rule apply in Serbia
Yes
Am I taxed on my global income in Serbia
Yes if you are a resident. Non-residents are subject to tax on their Serbian-source income only.
Can you set up your own Limited Company in Serbia?
| How long does it take to set up | 5.5 days |
| How much does it cost | RSD 9,000 |
| Is it easy? | Starting a Business Rank: 32, https://www.doingbusiness.org/data/exploreeconomies/serbia |
Tax Calculator in Serbia
If you are a contractor and want a calculation on your tax and net retention in Serbia, we can supply it to you free of charge.
Using an Umbrella Company for Income Tax in Serbia
Contractors in Serbia are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Serbian umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).
The companies are experts in Serbian taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Serbian tax office or tax department directly including processing your tax refund if you are eligible.
How We Can Help You with Tax in Serbia
We work with numerous umbrella companies in Serbia, many of whom are experts in tax and immigration laws. If you have any questions about tax in Serbia, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Serbian work permit.
Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Serbia but without the overhead of directly dealing with the Serbian tax authorities. Get in touch with us today for some reliable advice on tax in Serbia!
A Contractor’s Guide to Work Permits in Serbia
Immigration is one of the primary concerns for any contractor hoping to start working in Serbia. Permanent employees will find it easy to get their Serbian work permit because they’ll receive “sponsorship” for their entire stay from their prospective employer.
The Serbian work permit, is dependent on this sponsorship because it confirms that you’ll be earning money during your stay in the country. Contracting in Serbia is more difficult because the work permit is tied to one employer, so you have to change it to suit each new contract. Thankfully, umbrella companies provide a convenient and effective solution to this issue.
How Does an Umbrella Company Work?
Most people want to do their work, earn their money and enjoy their spare time without taking on loads of admin in a new country. That is why an umbrella company can help.
When you’re working through an Umbrella Company, you’ll essentially be outsourcing the admin and tax issues to specialists.
While the umbrella company will charge a fee, you’ll likely end up saving more money in the long run: you’ll be able to focus on your work, expertly reduce your tax liability, and comply with all laws and regulations in Serbia (which means avoiding fees, fines, or even worse penalties).
How Can We Help You?
There’s a huge variety of Umbrella Companies with different specialities and advantages in Serbia. How do you find the right one for your circumstances?
We work closely with Umbrella Companies all throughout Serbia and match contractors with the right company for them. If you’ve already secured a contract in Serbia, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).
