When founding a sole proprietorship (P.R.) in Serbia, one of the key steps is choosing the appropriate activity code. The activity code is not merely an administrative requirement, but plays a significant role in business operations, as it is directly connected to legal obligations, tax treatment, and the possibility of obtaining licenses and certifications in specific industries. In this text, we will thoroughly examine how to correctly choose an activity code and what to pay attention to.
1. What is an Activity Code?
An activity code is a numeric identifier assigned to entrepreneurs based on the type and scope of their business activity. In Serbia, the “Standard Classification of Activities (SKD 2010)” is used, which is aligned with international standards. Every type of business has an appropriate activity code, which is used for business registration and also for statistical, tax, and administrative purposes.
2. Why Is Choosing the Right Activity Code Important?
The appropriate activity code has several key implications:
- Tax obligations – The selected code can affect how your income will be taxed. For example, entrepreneurs engaged in trade may be required to pay VAT, while service-based businesses may sometimes receive more favorable tax treatment.
- Type of licensing – Some activities require special permits or licenses. For example, entrepreneurs working in healthcare or finance must have relevant certificates and authorizations.
- Rights and obligations – The selected code can impact your rights and duties under consumer protection laws, labor relations, environmental regulations, and other relevant legislation.
- Subsidies and support – Different activities may qualify entrepreneurs for government subsidies or support programs available to specific industries.
3. How to Find the Appropriate Activity Code?
Choosing an activity code requires thorough research. The process includes several key steps:
a) Understanding the Nature of Your Business
First, you must have a clear idea of what exactly your business will do. Are you providing services or producing products? Are you dedicated to a specific niche? Understanding the core of your business is the first step toward selecting the correct activity code.
b) Review the Standard Classification of Activities (SKD 2010)
SKD 2010 is the official classification used by the Serbian Business Registers Agency (APR). The classification is divided into several sectors and subsectors that cover all types of activities. It is structured hierarchically, starting from broad categories like agriculture, trade, and industry, down to specific subcategories like furniture manufacturing, consulting services, or computer repair.
- Find your activity: On the APR website, you can search for activity codes by keywords related to your business idea.
- Pay attention to details: Within a single code, multiple similar activities may be grouped, but it’s important to find the one that best reflects your business model.
c) Consult with Experts
If you’re unsure about the accuracy of the chosen code or if you have specific questions, consulting with an accountant, lawyer, or entrepreneurship advisor can be extremely helpful. They will assist you in correctly interpreting the code in the context of your business.
4. Questions to Consider When Choosing an Activity Code
- Does your activity require a license? – If you operate in a legally regulated activity (e.g., healthcare or legal services), be sure to check whether the code covers that specific industry.
- Does the code cover all aspects of your business? – If you offer multiple services or produce various products, you may need to register multiple activity codes.
- How will the code affect taxes? – Some activities come with specific tax benefits or obligations. Depending on whether you’re involved in trade, services, or manufacturing, taxes and contributions can vary significantly.
5. Possibility of Changing the Activity Code
Although choosing the code is an important step, entrepreneurs may change the type of business they conduct over time. In that case, a request for code change can be submitted. This change must be registered with the APR, with the appropriate documentation and payment of a fee.
Choosing an activity code is not just an administrative procedure, but a crucial element for the lawful and efficient operation of your sole proprietorship. A properly selected code can help you comply with regulations, obtain necessary permits and licenses, and optimize taxes and other obligations. Devote enough time to this step, as it can significantly impact the future success of your business.
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