Questions

Can one person establish two or more entrepreneurial shops?

Since the shop is a natural person and has unlimited liability meaning that the owner takes the responsibility for the total amount of debt and other liabilities that the business accrues, regardless of how much the owners have personally invested. There is no possibility that that one person possesses two or more shops. One person can establish several enterprises (legal entities) which have limited liability (e.g. limited liability company – LLC or as a limited partner in limited partnership).

Are entrepreneurs exempt from paying taxes for the first year of business?

The Law does not foresee the exemption from paying taxes for entrepreneurs in the first year of business.  Sole trader business income tax (Law on Personal Income Tax, Official Gazette RS, no24/01.and 65/2006) is paid per tax rate of 10%. Taxpayer of income tax of sole trade business is a natural entity performing activities as well as entities who achieve income from agriculture and forestry if on that basis the person is a taxpayer of value added tax.

Can person who is already employed establish an enterprise? The person is not employed in a public enterprise.

Employee can register during the employment as an entrepreneur, provided that the clause on conflict of interest does not prevent them. It means that it is not an activity that would be competitive to the activity of employer. As far as the payment of contributions is concerned, Law on Contributions for Mandatory Pension and Disability Insurance requires the mandatory payment of contributions for pension and disability insurance on any grounds according to which the incomes are achieved. It means that in any case the person is obliged to pay contributions regardless of the fact if employer pays contributions for them.

Can retired person with disability in any way be: owner, co-owner, shareholder or partner i.e. can they participate either in material way (investment) or consultative way (decision –making) in the work of a legal entity and which?

According to the provisions of Law on Pension and Disability Insurance, there are no obstacles for the retired person with disability to perform sole business activity according to which they are insured in the territory of the Republic of Serbia.  Upon termination of such employment/performance of the business activity, the beneficiary shall be entitled to re-determination of pension, provided that they had insurance for a year at least. On the other hand, there is no such possibility for the beneficiary of disability pension.  It is determined by the Law on Pension and Disability Insurance that the rights on pension and disability insurance stop to exist when during their use conditions for their acquisition and exercise cease to exist.

Can member of household entrepreneurs work in shop without employment contract?

According to the provision of the Law on Private Entrepreneurs (Official Gazette RS, no. 54/89... Official Gazette RS, no. 35/02…101/05), members of the family household of the shop founder can work in the shop without employment contract. Members of family household, in terms of the mentioned Law, are considered a spouse, children and parents. In this case, they need to have general health capacity, unless otherwise prescribed by the Law on Private Entrepreneurs for performing business activities, as well as meet the requirements in terms of staffing, if the nature of activities requires so. In addition to this, they have to meet the requirements in respect of health capacity determined by the provisions on protection of population from infectious diseases which under the Article 10 of the Law on private entrepreneurs must meet the founder and employees performing the following activities: production and trade of food products, catering activities, provision of services of accommodation and meals for tourists in the household, production of health care products , provision of hygiene care …

Can sole trade business be a founder of the company or the owner of the sole trade business needs first to unregister the sole trade business and then as a natural person establish a company?

Owner of the sole trade business can establish or be one of the founders of LLC (limited liability company) or limited partner in a limited partnership. What is important is that they cannot be one of the founders of the partnership or limited partner in a limited partnership because their liability for the company duties is unlimited or more precisely they are responsible with the entire property and such responsibility is also the responsibility of the owner of sole trade business.

What is better option for paying taxes for entrepreneurs (services), paying the lump-sum or VAT? How to calculate lump-sum and VAT?

There is no lump-sum determination of VAT because the conditions and method of calculation of VAT in a given period (monthly or quarterly) is determined by Law on VAT, so that everyone in the VAT system calculate and pay VAT in the same way. Law on Personal Income Tax determines the conditions which an entrepreneur has to fulfill in order to pay taxes on income determined on the lump-sum. (Article 40 of the Law on Personal Income Tax, paragraph 1). Article 40, paragraph 2, item 5 of the Law on Personal Income Tax explicitly states that:”The right to lump-sum taxation cannot be recognized to entrepreneur who is a subject to value added tax, or who decides to pay value added tax in accordance with the law by which the value added tax is determined.) For now you still belong to a group of entrepreneurs to whom the right to pay taxes on the lump-sum is recognized and therefore have no right to enter the VAT system.

Where can entrepreneurs obtain registration forms for entrepreneurs?

Registration form for entrepreneurs as well as request for excerpt can be obtained at the Business Registers Agency, in Belgrade, Brankova no. 25, organizational units and municipalities with which the Agency concluded an agreement and with proof on payment of 120,00 RSD. it can be also downloaded free of charge from the web site of Business Registers Agency.

What are the obligations of an entrepreneur if they want to exercise the right on pension and still want to continue working?

If an entrepreneur meets legally prescribed requirements for retirement, it is necessary that they  apply for deletion of entrepreneurs from Business Registers Agency, because one of the conditions for submitting the request for pension is that person at the time of submitting request is outside insurance. Upon obtaining the decision on deletion, it is necessary to submit a registration application on establishment of entrepreneurs.

Is registration of core activity mandatory?

Registration of the core activity is the obligation of a founder/entrepreneur. Founder-entrepreneur chooses one core activity in compliance with the Law on Classification of Business activities and Register of Classification Units which means if they are not sure about the activity code, they need to provide at least description of the activity that is going to be a core activity.

Can an entrepreneur perform other activities other than registered? Does he/she need to report the change of predominant business activity?

In addition to the activity registered as predominant, an entrepreneur can perform any other legally permitted activity and fulfillment of requirements for performing such activities is controlled by the competent authorities. In the area outside the headquarters of business the activity which is not registered as predominant can be performed. The change of expanding the core activities is not subject to registration.