Taxes for entrepreneurs larger in Serbia than in Germany

Large fiscal charges related to doing business are one of the key reasons why the business sector estimates that as many as 29% of the companies and entrepreneurs decide to operate in the gray zone. Nearly two thirds of the subjects in the NALED survey cite high salary taxes and contributions as the main reason for this, and accordingly, 43% of businessmen see avoiding these obligations as the most frequent form of gray economy.

The analysis of tax and non-tax charges for beginners in business, carried out by the NALED in cooperation with the Faculty of Political Sciences, has shown through a simulation of comparable examples that an entrepreneur who keeps business records and pays a minimal salary to themselves needs to set aside as much as 44.22% of the total revenues for taxes and contributions in Serbia, 25% in Croatia and 25 to 35% in Hungary, whereas, in Germany, the amount is half (21.13%) of what is paid in Serbia.

Although entrepreneurs in Serbia predominantly opt to pay lump-sum tax, they are also exposed to high expenditures. A hairdresser salon owner pays an annual lump-sum tax of 145,000 to 250,000 dinars depending on the municipality, whereas an IT company owner pays 235,000 to nearly 400,000, even without earning anything.

– In line with the recommendation by the NALED, the National Program for Countering Gray Economy envisages the implementation of tax exemptions in the first year of business activities for the young and the unemployed registered at the National Employment Agency as one of 108 measures and activities. We expect the Government and the Ministry of Finance to implement this measure by the end of 2017 in line with the adopted plan, because, if we want to stimulate entrepreneurship, voluntary adherence to regulations and legalization, we need to implement incentives in this field – says the head of the Association for Fair Competition of the NALED and chairman of the Managing Board of Societe Generale Serbia, Goran Pitic.

NALED Beograd

Fakultet političkih Nauka FPN Beograd

Ministarstvo finansija Republike Srbije

OTP banka Srbija a.d. Novi Sad

National Agency for Local Economic Development

NALED

gray economy

salary taxes

taxes and contributions

entrepreneurship

lump sum tax

lump sum tax payers

tax exemption

Association for Fair Competition of the NALED

Societe Generale

Goran Pitic

tax exemptions for beginners in business

stimulating entrepreneurship