Under the Regulation on the detailed conditions, criteria, and elements for lump-sum taxation of taxpayers earning income from self-employment, a specific form of protection is prescribed for lump-sum entrepreneurs when determining the tax base for lump-sum taxation.

It is stipulated that, when transitioning from one year to the next, the tax and contribution base for lump-sum entrepreneurs may not be increased by more than 10%. This protective rule was introduced by the Regulation in 2020 and was initially intended to apply until 2022. However, subsequent amendments to the Regulation have extended the application period of this provision.

The latest amendments, published in the Official Gazette on 19 December 2025, provide that this protective rule will apply throughout 2026 and 2027.

This means that the contribution base for 2026 for lump-sum entrepreneurs may not be increased by more than 10% compared to the base on which taxes and contributions were paid during 2025.

This protective rule does not apply in cases where a lump-sum entrepreneur changes:

• the business activity code, and/or

• the municipality or place of registered seat.

Entrepreneurs who resume their business activity after a period of suspension (dormancy) may expect the following:

• if the suspension began no later than 2017, the 10% limitation applies, calculated based on the last tax base determined before the suspension of activity;

• if the suspension began in 2018 or later, the 10% limitation does not apply. In such cases, the entrepreneur may expect a significantly higher tax base and, consequently, higher tax and contribution liabilities upon reactivation.

All of the above is regulated by Article 6 of the Regulation, which is reproduced in full below:

“If, as a result of a change in the method of determining lump-sum tax, the determined tax base increases by more than 10% compared to the amount determined for the previous year, an annual increase of 10% shall be applied until the liability reaches the amount determined under the new calculation method, up to and including 2027.

By way of exception to paragraph 1 of this Article, increases in liabilities exceeding 10% shall apply in cases resulting from a change in the business activity code, municipality, and/or the place where the taxpayer is registered.

By way of exception to paragraph 2 of this Article, a change of municipality shall not be deemed a change within the meaning of paragraph 2 where a taxpayer registered in one of the municipalities within the territory of the City of Belgrade referred to in Article 4, paragraph 3 of this Regulation changes its registered seat to another municipality within the same territory, nor where a taxpayer registered in one municipality within another city changes its registered seat to another municipality within that same city.

For a taxpayer for whom, as of 1 January of the year for which the tax base is determined, less than 36 months have passed since initial registration, and who is under 30 years of age as of 31 December of that year, the activity coefficient for 2020, 2021, and 2022 shall be determined in the amount of the activity coefficient applicable for 2023 and subsequent years.

For a lump-sum entrepreneur who submits an application to resume business activity after a suspension that began no later than 2017, the tax base shall be determined by applying the 10% increase limitation referred to in paragraph 1 of this Article to the last tax base determined prior to the suspension.

For lump-sum entrepreneurs with a registered seat in the territory of the City of Belgrade covering the municipalities referred to in Article 4, paragraph 3 of this Regulation, as well as for lump-sum entrepreneurs with a registered seat in one of the municipalities within another city, whose tax base for 2020 was increased by more than 10% due to a change of registered seat within the meaning of paragraph 2 of this Article, the activity coefficient for 2021 and 2022 shall be determined in the amount of the activity coefficient applicable for 2023 and subsequent years.”