The tax system in Serbia still does not recognize freelancers as a separate category. They are classified as entrepreneurs, although they are not taxed in the same way. People engaged in this work say that it is very difficult to survive because, as workers, they have almost no rights.
“Nothing is certain except for taxes and death,” Benjamin Franklin wrote in his letter to Jean-Baptiste Le Roy in 1789. Two centuries later, this statement remains true. This is best known by people in Serbia who earn money online by providing a wide range of services—freelancers.
They received tax assessments from the tax administration for income earned in 2018, the day after the parliamentary and local elections on December 17th this year.
Tamara Petrović, a representative of the Association of Internet Workers, told “Vreme” that the problem is that the assessments are arriving five years late.
“I assume that the tactic is to send assessments once a year for one year because they think it’s easier for us to ‘swallow’ those figures compared to the total amount for all five years. The assessment for 2018 could have arrived in January 2019, but I guess there are no capacities for such dynamics,” Petrović said.
The Tax Administration of the Republic of Serbia determined the obligation for taxpayers, so-called “freelancers,” who, from January to December 2018, earned income based on contracted remuneration for copyright and related rights and contracted remuneration for performed work, subject to self-taxation.
Tax obligations were determined based on data from commercial banks about the income of individuals, as announced by the Tax Administration.
They stated that freelancers can pay this in 120 monthly installments, and the first installment must be paid no later than February 19, 2024.
Workers without protection
A participant in the conversation with “Vreme” was a member of the working group when freelancers negotiated with the government in 2020 regarding the retroactively established debt for the previous five years, which is the maximum statute of limitations for tax liabilities.
“Despite all the negotiations with the government, freelancers really didn’t get their category or legal form. Some can be entrepreneurs, but all others working for a single employer, who do not pass the independence test, are doomed to this tax settlement that did not lead to us getting our rights. They are still disenfranchised people in the sense that they have no rights as workers,” says Petrović.
She explains that freelancers have rights only to health and pension insurance, but any other form of security is unattainable.
“We cannot get a place in a daycare for our child; young women who want to start a family cannot claim their rights based on their work… You cannot protect yourself from an employer; if they are not in the country, you have no protection from dismissal, you have no annual leave, no sick leave…” Petrović lists.
The latest measurement from Gigmetar, a tool for researching and analyzing the freelancing market in Serbia and the region conducted by the Center for Research of Public Policies, revealed a decline in digital workers in Serbia.
After a significant double-digit growth in the post-pandemic period, the latest findings show a considerable drop in the number of digital workers in Serbia on the leading platform—up to 17.8 percent.
However, our interviewee claims that these numbers are unreliable because the exact number of people earning as freelancers is unknown.
“The data available are those monitored by our associations on Facebook and the data from the tax administration on how many people have filed reports. Officially, 4000 people are taxed in this way. Freelancers and entrepreneurs are included together, creating a general mess. How many people have actually given up earning money in this way is debatable because it’s unclear where they went,” Petrović wonders.
Freelancer – Both a Teacher and a Hairdresser
In Serbia, 328,000 people are engaged in entrepreneurship, including freelancers, according to the Business Registers Agency.
A freelancer isn’t the same as an entrepreneur, although they belong to this group. They are exempt from many administrative difficulties. They don’t have to register with the Business Registers Agency (APR), nor do they have to pay a fixed tax amount.
A freelancer isn’t an employee because they aren’t in an employment relationship; they perform agreed-upon tasks for an employer. However, they aren’t a contract worker either.
We often associate freelancers with the IT world and working for foreign employers. However, in Serbia, they can be hairdressers or teachers as well.
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