Guide
Switching from flat-rate to bookkeeping
We handle the entire switch from flat-rate to keeping business books, from filing with the Tax Administration and, where needed, changes with APR, to setting up bookkeeping and new records, without interrupting your business.
Switching from flat-rate sounds like a big change, but in practice you do not close the business, you only change how you are taxed and the records you keep. It happens when flat-rate is no longer allowed (most often because you passed the turnover limit or entered VAT) or when it simply stops paying off. What worries people most is exactly when the switch starts and how much more they will pay, so below we explain that clearly, with the exact dates and deadlines, so you neither overpay nor get fined.
What you should know
- The switch is mandatory in three cases: when annual turnover passes 6,000,000 dinars, when you enter the VAT system (turnover over 8,000,000 dinars in the previous 12 months), or when your activity is not allowed on flat-rate (e.g. advertising and market research, wholesale trade).
- The start date depends on when you crossed the limit. If you crossed it in the first half of the year (by 30 June), you keep books from 1 July that year. If in the second half, you stay on flat-rate to year end and start books from 1 January next year, which is actually easier.
- 6 million and 8 million are two different thresholds. The first is the flat-rate limit (calendar year), the second is the mandatory VAT threshold (any 12 consecutive months). A VAT payer cannot remain a flat-rate trader.
- You do not close the business. You keep the same entrepreneur, PIB and APR registration; only the tax regime and records change. Instead of the KPO ledger you keep business books, take a stocktake and draw up an opening balance, and you file the PPDG-1S tax return within 15 days of the changeover date.
- How much you pay changes too. Instead of the fixed flat-rate, tax is 10% on actual profit plus contributions, and at the start you choose between self-taxation and a personal salary, which materially affects the monthly amount. A bookkeeper's fee is added (typically from around 6,000 dinars a month).
- The switch is reversible. If your income later drops back to 6,000,000 dinars or less and your activity is eligible, you can return to flat-rate. A voluntary change of regime applies from 1 January, and the request is filed by 31 October.
| Item | Flat-rate | Bookkeeping |
|---|---|---|
| Tax base | Flat-rate determined income | Actually realized profit, 10 percent rate |
| Records | KPO ledger | Business books (single or double-entry) |
| Personal salary option | No | Yes, the entrepreneur may opt for it |
How we handle it
- 01 Check and analysis We check why the switch is needed (crossing the turnover threshold, an excluded activity or VAT) or whether it pays off, and we calculate how tax on actual profit will look compared with your current flat-rate.
- 02 Preparing the switch We determine the exact changeover date and choose the bookkeeping system and personal salary setup, then prepare the filings for the Tax Administration and, where needed, changes with APR.
- 03 Stocktake and opening balance We take a stocktake of assets and liabilities as at the changeover date and draw up the opening tax balance sheet that becomes the basis of your new bookkeeping.
- 04 Setting up records We open the business books, chart of accounts and fixed-asset records, and on entering VAT we register you and connect you to SEF for e-invoices.
- 05 Ongoing accounting and deadlines We take over regular posting, the calculation of tax and contributions and the filing of tax and VAT returns, keeping track of all the new deadlines.
Frequently asked questions
When do I have to switch from flat-rate to keeping books?
When your annual turnover passes 6,000,000 dinars, when you enter the VAT system (turnover over 8,000,000 dinars in the last 12 months), or when your activity is one that is not allowed on flat-rate. Any one of these is enough.
I crossed 6 million in October, do I have to start keeping books right away?
No. If you cross the limit in the second half of the year (1 July to 31 December), you stay on flat-rate to the end of the year and start keeping books from 1 January next year. Only if you had crossed it in the first half (by 30 June) would you switch on 1 July of the same year.
Is the flat-rate limit still 6 million dinars in 2026?
Yes. The limit is still 6,000,000 dinars for keeping flat-rate status, and the VAT threshold is 8,000,000 dinars over the previous 12 months. There have been proposals to raise the flat-rate limit to 8 million, but that is not law yet, so the 6 million rule applies.
Will I pay a lot more once I switch to books?
You move from a fixed monthly flat-rate amount to 10% tax on your actual profit plus contributions, and you take on a bookkeeper (typically from around 6,000 dinars a month). The total depends on your profit, your costs, and whether you choose self-taxation or a personal salary, so it is worth calculating both before you switch.
Do I keep the same business, and can I go back to flat-rate later?
Yes, you keep the same entrepreneur, PIB and APR registration; only the tax regime and your records change, you do not close and reopen. You can return to flat-rate for a future year if your income is again 6 million dinars or less and your activity is eligible, by filing the request by 31 October to apply from 1 January.
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