Entrepreneur Independence Test

The Law on Amendments to the Law on Personal Income Tax introduces the Entrepreneurship Independence Test to be introduced on 1.3.2020. Five of the nine criteria finally proposed were corrected, following public hearings held in Belgrade, Niš, Novi Sad and Kragujevac.

After the changes, the criteria are:

1. the principal or related party with the principal determines the working hours of the entrepreneur, or the vacations and absences of the entrepreneur depend on the decision of the principal and the compensation to the entrepreneur is not reduced in proportion to the time spent on vacation;

2. the entrepreneur normally uses premises or conducts business in a place designated by the principal or a related person with the principal for the purposes of performing the tasks entrusted to him;

3. the principal or related person with the principal performs or organizes professional training or further training of the entrepreneur;

4. The principal has hired the entrepreneur after advertising in the media the need to engage individuals or by hiring a third party who is normally engaged in finding suitable people for employment and whose service has resulted in the engagement of that entrepreneur;

5. The principal or a related party with the principal provides its own basic tools, equipment or other basic tangible or intangible assets necessary for the regular work of the entrepreneur or finances their acquisition, except for specialized tools, equipment or other specialized tangible or intangible assets for the purpose of executing a specific job or order, either the principal or a related party with the principal normally manages the process of work of the entrepreneur, except for such management which entails giving a basic order in connection with the ordered job and reasonable control of the results of work or supervision of the principal, as a good businessman, over the performance of the work he has commissioned;

6. at least 70% of the total income of the entrepreneur or in the period of 12 months beginning or ending in the tax year concerned has been generated by one principal or a related party with the principal;

7. the entrepreneur performs activities which are officially defined as activities of the principal or related party with the principal, and for such performed activities his engagement contract does not contain a clause under which the entrepreneur bears the usual business risk for the job delivered to the client of the principal or related person with the principal, if such a client exists;

8. the contract for hiring an entrepreneur or a lump sum entrepreneur contains a partial or complete ban on the entrepreneur to provide services under a contract with other principal, except for a partial prohibition that includes the provision of services to a limited number of direct competitors to the principal;

9. the entrepreneur performs activities for a fee for the same principal or for a related party with the principal, continuously or intermittently for 130 or more business days for a period of 12 months beginning or ending in the respective tax year, whereby performing activities in one working day are considered to be any activity in any period during that working day between 00 and 24 hours.

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