An analysis conducted by the Centre for Social Policy Research (CENTAR) showed that Serbian freelancers earn an average of 80,000 dinars gross a month and that their salaries are not regular and guaranteed in advance.
At the same time, their annual tax debt is estimated to be around 270,000 dinars or 2,300 euros.
As regards the amount of the salaries of freelancers, the Centre warns that women earn on average about 60,000 dinars gross per month, against the average of 80,000 dinars per month for male freelancers. The Centre notes that the salaries were calculated before the outbreak of the pandemic, during which the demand for services by freelancers from Serbia decreased.
When it comes to the taxation of the income of freelancers, the Centre believes that the Tax Administration can decide to introduce fines for the accumulated delays in tax payment, but that examples from other countries show negative consequences of this decision.
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“We have already seen such a scenario in Bosnia and Herzegovina, where such action led to the devastation of the freelance community and not to the expansion of the tax base,” warns the Centre.
According to the analysis, even if a lower tax rate was applied, the tax debt of freelancers would be substantial. “If, for example, they earned an average of 80,000 dinars gross per month in a year, they would be obliged to pay, at best, about 270,000 dinars per year, or 2,300 euro towards tax and contributions,” the analysis shows.
Freelancers, the Ministries of Finance and the Tax Administration should reach an agreement regarding the payment of debt that would contain various elements.
“These should be a clear recalculation of effects and increase of non-taxable base, a significant simplification of calculation procedure and filing tax returns electronically without having to go to the tax office. Although the Tax Administration has the right to collect tax on income generated five years ago, our proposal would be to calculate the tax debt from July 1, 2020, i.e. from the date when the line ministries, the Tax Administration and freelancers reached an agreement”, the Centre for Social Policy Research advises.
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