Invoicing as a flat-rate entrepreneur
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A flat-rate entrepreneur invoices like any other, but without VAT and with two numbers to keep in mind: 6 million dinars for flat-rate tax and 8 million for VAT. Here is what goes on the invoice, how the KPO book is kept and when you need SEF.
What goes on a flat-rate entrepreneur's invoice
The same details as on any invoice: your details and the buyer’s, the number, the place and date of issue, the date of supply and the line items. The full list, with an example, is in How to make an invoice in Serbia.
The difference is tax. A flat-rate entrepreneur outside the VAT system doesn’t charge VAT, so the invoice has no VAT base or rate, only the total and a note such as „PDV nije obračunat u skladu sa članom 33 Zakona o PDV-u” (VAT not charged under Article 33 of the VAT Act). You don’t need to stamp or sign the invoice, and a PDF sent by email is enough.
Two limits: 6 and 8 million dinars
These two numbers are often mixed up, but they mean different things.
| Limit | What it decides | Period | What counts |
|---|---|---|---|
| 6,000,000 RSD | Your right to flat-rate taxation | The calendar year, 1 January to 31 December | All turnover, from Serbia and from abroad |
| 8,000,000 RSD | Whether you must register for VAT | Any 12 consecutive months | Turnover in Serbia; services to foreign buyers don't count |
On flat-rate tax the first one usually matters more. If you go over 6 million in a calendar year, you lose the right to flat-rate tax and move to a different way of being taxed, so it’s better to see it coming. Raising this limit to 8 million was widely discussed, but it never became law: the flat-rate limit is still 6 million.
Invoices in a foreign currency count toward turnover converted to dinars at the National Bank of Serbia (NBS) middle rate on the invoice’s trading date. Proforma invoices don’t count, because they are not turnover (more in Proforma invoice or invoice).
When you mark a company as flat-rate in Fakturio, the Dashboard shows how much of the limit you have used and roughly when you will reach it at your current pace. That way you find out in March, not in November.
The KPO book
The KPO book is the turnover ledger that flat-rate taxpayers keep as their record of income. You don’t record expenses. The book has five columns:
- Entry number, restarting at 1 each year.
- Date and description, usually the invoice date and number and the buyer’s name.
- Income from selling goods.
- Income from services.
- Total, the sum of columns 3 and 4.
An invoice is entered when it is issued, not when it is paid, because the KPO book tracks turnover, not payments. Foreign-currency invoices are entered in dinars, at the NBS middle rate on the trading date (the day of supply).
In Fakturio the KPO book is built from the invoices you have issued: pick a period and export it to Excel, in the layout of the official form, or to CSV. What exactly goes into the book is still between you and your accountant; the export just saves you the copying.
Do flat-rate entrepreneurs have to use SEF?
- Invoicing companies in Serbia: no. A flat-rate entrepreneur outside the VAT system is not required to e-invoice and can send a PDF invoice.
- Invoicing the public sector: yes. Before you send an invoice to a ministry, a municipality, a school or a public enterprise, you must register with SEF.
- Once registered, even voluntarily, you stay a SEF user at least until the end of the following year and send invoices to companies through it.
- Invoicing buyers abroad and private individuals: no.
Fakturio doesn’t send invoices to SEF yet. If you work with companies and clients abroad that is no obstacle; for invoices to the public sector you need SEF.
Clients abroad
Many flat-rate entrepreneurs work mostly for foreign clients. For them the VAT note is different, IBAN and SWIFT replace the domestic account number, and amounts are converted at the NBS rate. It’s all explained in Invoicing clients abroad.