Freelancers given deadline until October 30 to file income reports for third quarter – Penalties for late filing go up to RSD 150,000

Since October 1, 2024, natural persons in Serbia which realize income based on contracted fees for the work done, as well as from copyright and related rights, are obliged to file tax returns for the third quarter. This obligation pertains to those who settle their obligations through the self-taxation system.

Freelancers are obliged to report their income and file tax returns by October 30 at the latest, exclusively electronically at that, through the specialized portal of the Tax Administration. After they file the tax return successfully, the system automatically generates the payment slip with all the necessary payment data.

The Tax Administration reminds that not filing tax returns on time is subject to sanctions. If the return is not filed within the proscribed deadline, the freelancer faces the obligation of the payment of the interest, and there’s also the possibility of initiating a procedure due to an administrative offense.

If they don’t report their income on time, freelancers are obliged to file reports with a delay, with an interest calculated for the period from the due date to the payment date. The penalty for not filing the tax return on time ranges from RSD 5,000 to 150,000.

Freelancers in Serbia are subject to a specific taxation system. Since they belong to the self-taxation category, the Tax Administration does not send tax bills to them and they are, instead, responsible for the calculation of their obligations. This process is done with the help of the calculator that is available on the website of the Tax Administration, and the tax returns are filed via the PP OPO-K form. Although these obligations are clearly proscribed, many freelancers face challenges and uncertainties regarding the process itself, especially due to the potential penalties and legal uncertainties.

Freelancers can choose between two models of tax and contribution calculation for the first quarter, and each option has its special characteristics and advantages depending on the height of the income. Model A enables a non-taxable income of RSD 103,296, without recognized expenses. In this model, pension and disability insurance contributions amount to 24%, whereas the income tax is 20%. Health insurance contributions are 10.3%, with a minimum obligation of RSD 5,497 per quarter.

On the other hand, Model B features a lower non-taxable amount – RSD 62,300 – but with recognized costs of 34%. The tax is 10% in this case, and the contribution for pension and disability insurance remains the same – 24% to the non-taxable income component. Health insurance is equal in both models, but Model B is more favorable for the freelancers who have a higher income.

Tax experts say that freelancers who earn more often choose Model B because it provides more flexibility regarding the costs.

One of the biggest injustices that freelancers face is that, although they pay contributions for pension and disability insurance, their labor rights remain very limited. They have no right to a paid annual leave, pregnancy and maternity leave, or an unemployment compensation, because their work is formally seen as non-contract work. Health insurance is mandatory for freelancers, unless they already have health insurance based on a labor contract with some other employer.

As for pensionable service, freelancers acquire the right to it, but not to length of service. That means that, although they pay contributions for pension and disability insurance at a rate of 24%, they don’t acquire the rights which are available to employees with regular labor contracts.

If a freelancer is already employed somewhere, additional payments for pension and disability insurance can increase the personal coefficient for pension calculation, which can result in a higher pension in the future.

Tax obligations throughout the year

The tax obligations of freelancers are distributed throughout the year. After they file income reports for the first quarter, the deadline for which is April 30, their next obligations, for the second quarter, are due on July 30, for the third quarter on October 30 and for the fourth one on January 30 of the next year.

This system of quarterly reports requires freelancers to be very careful in planning their financial obligations and to pay attention to the deadlines so as to avoid the potential penalties and interests for being late.

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