Guide
Dormancy for a sole trader: APR filing, obligations and reactivation
We register a temporary suspension of activity with APR, settle the accompanying tax obligations toward the Tax Administration, advise you on contributions during dormancy, and later register the resumption of work for you.
Dormancy is a temporary suspension of activity that an entrepreneur registers with APR: the business pauses while the entry stays in the register with the same company number and PIB. While dormant you carry out no activity and generate no turnover, so the current tax and contribution obligations are suspended for that period. This solution makes sense when you temporarily have no work, when you go on a longer trip or break, or when you are waiting for a better moment to resume and are not sure you want to close for good. If the decision is final, the procedure is a different one and leads to closing the sole trader. Dormancy applies to entrepreneurs only, while a company such as a d.o.o does not have this option.
What you should know
- Dormancy is available to entrepreneurs (both flat-rate ones and those keeping business books), while a company such as a d.o.o cannot enter dormancy and its obligations continue until liquidation is carried out.
- During dormancy the entrepreneur remains registered with APR, keeps the company number and PIB and does not lose the business history, so they later resume work without forming the business again.
- While dormant the entrepreneur carries out no activity, generates no turnover and issues no invoices, so for that period the current obligations for personal income tax from self-employment and for mandatory social insurance contributions are suspended too.
- Contributions can, by choice, still be paid: if you do not pay them, your pension service is interrupted and you lose the right to health insurance through the business, whereas if you want to stay insured you pay contributions on the prescribed base.
- Dormancy may last indefinitely and the resumption of activity is registered with APR at any time through an application, after which the business operates again, including the obligation of fiscalization and issuing fiscal receipts.
- The difference from deletion is fundamental: dormancy is a temporary and reversible state in which the business still exists, while deletion is the permanent removal of the entrepreneur from the register and requires that all obligations toward the Tax Administration and the local tax administration be settled.
- Round off current business before the date dormancy starts: issue and collect the remaining invoices, while an entrepreneur who keeps business books files the tax return and tax balance for the period up to the suspension date within the prescribed deadline, so the charging of tax and contributions stops (APR forwards the suspension data to the Tax Administration through the single-window system).
- When work resumes the obligations come back too: fiscal receipts are issued again, the tax records are aligned and the regular keeping of business books continues.
- The most common mistakes are treating dormancy as deletion, working and issuing invoices while dormant, expecting pension service to keep running although contributions are not paid, and forgetting that the fiscalization obligation revives the moment work resumes.
| Question | Dormancy (temporary suspension) | Deletion (permanent closure) |
|---|---|---|
| Permanence | A temporary and reversible state that may last indefinitely | Permanent removal from the register |
| Status of the business | The business still exists and keeps its company number, PIB and business history | The entrepreneur is permanently removed from the register |
| Who is eligible | Entrepreneurs, both flat-rate and those keeping books; a d.o.o has no such option | Concerns removal of the entrepreneur from the register |
| Work and turnover | No activity is carried out, there is no turnover and no invoices are issued | Activity ends for good, because the entrepreneur is removed from the register |
| Tax | The current obligation for personal income tax from self-employment is suspended for the dormancy period | Requires that all obligations toward the Tax Administration and the local tax administration be settled |
| Contributions and insurance | Suspended, but may still be paid by choice on the prescribed base; if they are not paid, pension service is interrupted and health insurance through the business is lost | They end together with the business, provided the due obligations are settled |
| Fiscalization | No fiscal receipts are issued while dormant, and the obligation returns when work resumes | Ends for good, because the business is no longer in the register |
| Returning to work | By filing the resumption of activity with APR, usually within a day or two, without forming the business again | Work can only continue by forming and registering a new business |
How we handle it
- 01 Assessing whether dormancy is the right solution We discuss the reason for the pause and check whether a temporary suspension or a permanent deletion of the business suits you better, so you do not pay more than necessary.
- 02 Rounding off business up to the suspension date Before the date dormancy begins we issue and book the remaining invoices and tidy up the records, because while dormant no activity is carried out and no invoices are issued.
- 03 Registering the suspension with APR We complete the registration application for a change of data with the addendum for suspension and resumption of activity and file it with APR, with the prescribed fee and the chosen date from which dormancy begins.
- 04 Settling obligations toward the Tax Administration Through the single-window system APR forwards the suspension data to the Tax Administration, and for entrepreneurs who keep books we file the tax return and tax balance for the period up to the suspension date within the prescribed deadline, so that the charging of tax and contributions stops.
- 05 Advice on contributions and insurance We explain the consequences for pension service and health insurance and, if you wish, arrange to keep paying contributions on the prescribed base so you remain insured.
- 06 Registering the resumption of work When you decide to return to work, we file the application for resumption of activity with APR and the business starts operating again, usually within a day or two.
- 07 Restarting the bookkeeping On resumption we align the tax records, bring back the obligation of fiscalization and issuing receipts, and continue the regular keeping of your business books.
Frequently asked questions
Is dormancy the same as closing the business?
No. Dormancy is a temporary and reversible state in which the business still exists and keeps its company number and PIB, while deletion permanently removes the entrepreneur from the register and requires that all obligations toward the Tax Administration and the local tax administration be settled. After dormancy work resumes with an application to APR, whereas after deletion you would have to form a business again.
What must be done before the date dormancy starts?
Round off current business, because from that date no activity is carried out and no invoices are issued: issue and collect the remaining invoices and tidy up the records. An entrepreneur who keeps business books files the tax return and tax balance for the period up to the suspension date within the prescribed deadline, so the charging of tax and contributions stops, while APR forwards the suspension data to the Tax Administration through the single-window system.
Can a d.o.o enter dormancy?
No. Dormancy applies to entrepreneurs, while a company such as a d.o.o does not have this option and its obligations continue until liquidation is carried out.
What happens to contributions and pension service during dormancy?
Contributions can, by choice, still be paid. If you do not pay them, your pension service is interrupted and you lose the right to health insurance through the business, whereas if you want to stay insured you pay them on the prescribed base.
How long can dormancy last and how is work resumed?
Dormancy may last indefinitely, and the resumption of activity is registered with APR at any time through an application, after which the business operates again, usually within a day or two, including the obligation of fiscalization and issuing fiscal receipts.
What are the most common mistakes with dormancy?
Most often dormancy is confused with deletion, so the owner expects the obligations to have ended for good. Next come working and issuing invoices while dormant, although no activity is carried out and no turnover is generated in that period, then expecting pension service to keep running although contributions are not paid, and forgetting that the obligation of fiscalization and issuing fiscal receipts returns the moment work resumes.
How to start a company
A guide to starting a company in Serbia: choosing a legal form, APR registration and first obligations.
Read moreSole trader, flat-rate or LLC: which to choose
An overview of the three Serbian legal forms (flat-rate sole trader, sole trader on business books, and an LLC) compared by liability, taxation, bookkeeping and capital, so you can pick the form that pays off best for you.
Read moreOpening a company in Serbia for foreigners
A separate process for foreign founders: documents, APR, physical KES/QES, banking and the required visit to Serbia.
Read moreReady to hand your books to the experts?
Book a free 30-minute consultation. No obligations, just a clear plan for your finances.