Serbia, Republic of
Belgrade GMT +1
EY
Antifašističke borbe 13a Belgrade Serbia
Indirect tax contacts
Ivan Rakić
+381 (011) 2095-794 ivan.rakic@rs.ey.com
Stefan Strovjanovski +381 (011) 2095-775 stefan.strovjanovski@rs.ey.com
Gordana Ačanski +381 (011) 2095-773 gordana.acanski@rs.ey.com
A. At a glance
Name of the tax
Value-added tax (VAT)
Local name Porez na dodatu vrednost (PDV)
Date introduced 1 January 2005
Trading bloc membership Central European Free Trade Agreement (CEFTA)
Administered by Tax administration (https://www.purs.gov.rs/en.html)
VAT rates
Standard 20% Reduced 10% Other Zero-rated (0%) and exempt
VAT number format 123456789 (9 digits)
VAT return periods Monthly or quarterly
Thresholds
Registration RSD8 million
Recovery of VAT by non-established businesses Yes, subject to certain conditions
B. Scope of the tax
VAT applies to the following transactions:
• The supply of goods and services deemed to take place in Serbia performed by taxable persons in Serbia against consideration while performing their regular business activity
• Importation of goods into Serbia, regardless of the status of the importer
• Services purchased by taxable person in Serbia from service providers whose place of business is outside Serbia, with Serbia regarded as the place of supply (subject to the “reverse-charge” mechanism)
C. Who is liable
Any person (entity or individual) who supplies goods and/or services, and on that account gener ates revenues in this regard, in the course of the person’s independent business activity, is liable for VAT. The obligation to register for VAT purposes and to calculate VAT is triggered when total
turnover, except for the supply of exempt services, in the previous 12 months exceeds RSD8 mil lion. A taxable person whose taxable turnover exceeds RSD8 million in the previous 12 months is obliged to submit a registration form for VAT to the tax authorities no later than the end of the first period for submitting a VAT return.
In addition, a taxable person is also considered to be an open investment fund, i.e., an alternative investment fund that does not have the statutes of a legal entity and that is entered in the appropri ate register in accordance with the law.
Exemption from registration. The VAT law in Serbia does not contain any provision for exemption from registration. However, there is an exemption for non-established business supplies to tax able persons, as outlined in the Non-established businesses subsection below.
Voluntary registration and small businesses. An option is available for small taxable persons and farmers (annual turnover below RSD8 million) to register for VAT by submitting a registration VAT form to the tax authorities, thereby acquiring the rights and obligations to compute and deduct VAT. The minimum obligation to be VAT registered from voluntarily registering to account and pay VAT is for two years.
Group registration. Group VAT registration is not allowed in Serbia.
Non-established businesses. A “non-established business” is a business that does not have a reg istered establishment in Serbia. A foreign entity that supplies goods or services in Serbia is obliged to appoint a tax representative and register as a taxable person (only one tax representa tive can be appointed, either an individual or a legal entity). Foreign entities that make taxable supplies of goods and services provided exclusively to Serbian taxable persons, the State, government departments and similar bodies are not obliged to appoint a tax representative and register for VAT purposes, since in such cases the “reverse-charge” mechanism is applied.
A non-established business that does not make any supplies of goods or services in Serbia may claim a VAT refund, under prescribed conditions.
Tax representatives. A tax representative appointed in the Republic of Serbia by a foreign entity that does not have a legal presence in the Republic of Serbia is considered to be a tax debtor for VAT purposes. The tax representative is jointly and severally liable for all liabilities of the foreign entity. In case the foreign entity fails to appoint a tax representative, the recipient of the goods/ services will be considered as a tax debtor for VAT purposes. A VAT representative must be resident in Serbia and have been registered for VAT for at least 12 months before applying to be a tax representative. The tax representative should comply with all of the foreign entity’s VAT obligations, including accounting for VAT liabilities and dealing with VAT recovery on behalf of the foreign entity.
Reverse charge. According to Serbian tax legislation, the reverse-charge mechanism is applied for services supplied by a non-established business to a business that is established and registered for VAT in Serbia, i.e., a business-to-business (B2B) supply, for which the place of supply is Serbia, if the foreign services provider does not appoint a tax representative in Serbia.
Domestic reverse charge. A domestic reverse charge also applies on the sale of secondary raw materials and services that are directly related to these goods provided by another VAT taxable person. Secondary raw materials are defined as the by-product of goods that have undergone a manufacturing process, such as metal, wood, plastic, paper and glass. Services that are directly related to secondary raw materials are the services of sorting, cutting, partitioning, cleaning, polishing and pressing of such materials.
In addition, reverse charge applies in some specific situations of construction services (if the value of the respective services exceeds RSD500,000) and transfer of real estate. Finally, in accor dance with the amended VAT law, reverse charge also applies in some specific situations of
electric power and natural gas supplied through transport grids and distribution networks, where the buyer has acquired these supplies for further sale.
Digital economy. Specific rules apply to electronically provided services. In general, the place of supply of electronically provided services by an overseas business to both businesses and private individuals in Serbia is deemed to be the place where the recipient of services has its seat or a permanent branch office, i.e., Serbia.
Additionally, guidelines are in place in Serbia, defining the criteria and assumptions for deter mining the place of establishment, permanent establishment, permanent residence or residence of the recipient of telecommunication services, radio and television broadcasting services and services supplied electronically, applicable as of 1 January 2020.
Nonresident providers of electronically supplied services for business-to-consumer (B2C) supplies would be required to register and account for VAT in Serbia.
Nonresident providers of electronically supplied services for business-to-business (B2B) sup plies are not required to register and account for VAT on supplies in Serbia. Instead, the cus tomer is required to self-account for the VAT due by way of the reverse-charge mechanism (see the Reverse-charge subsection above).
If an overseas business has not appointed a VAT representative, VAT with respect to electroni cally provided services should be calculated by the service recipient by reverse charge. However, if there is a collection agent in Serbia that charges the individuals (or other nontaxable persons) on behalf of an overseas service provider, such collection agent is obliged to calculate and pay VAT.
Note that if permanent and temporary residence of the provider or recipient of the services are not the same place, the place of supply of the service is determined according to the place of temporary residence.
There are no other specific e-commerce rules for imported goods in Serbia.
Online marketplaces and platforms. Online markets are regulated by Serbian electronic trade law. Freedom to provide cross-border services is prescribed and the conditions under which it can be restricted. Cross-border service provision is the provision of services in Serbia or the EU, where the service provider is not established or is not resident in the territory of the country where the service is provided. In particular, the freedom to provide cross-border services enables domestic providers registered in Serbia to provide information society services in EU Member States to beneficiaries established/residing in the EU, under the same conditions as EU service providers would. At the same time, it enables EU providers to provide information society services in the Republic of Serbia.
Vouchers. As of 1 January 2020, the concept of a voucher is introduced. A voucher is defined as an instrument for which there is an obligation to be accepted as a fee or part of the fee for the goods/services provided, under condition that the following is stated on the voucher or related document: type of goods/services provided; identity of the supplier of the goods/services; terms of use of the voucher.
The VAT law distinguishes between single-purpose (SPV) and multipurpose vouchers (MPV). The essence of distinguishing between SPV and MPV is reflected precisely in the tax treatment of issuing and transferring these vouchers. Namely, in the case of transfer of SPV, any transfer made by the VAT taxable person on its own behalf is considered as a turnover of goods or services to which the voucher relates, while the delivery of goods or services to the voucher holder is not considered as a separate transaction. On the other hand, the transfer of an MPV is not considered as a turnover of goods and services, but the delivery of goods, that is, the provision of services for which a fee is paid by a voucher is regarded as a taxable event.
Registration procedures. A registration form (EPPDV) is filed by the taxable person. After con ducting the appropriate procedure, the tax authorities will issue a certificate of VAT registration. The VAT registration form EPPDV must be submitted to the tax authorities electronically via the tax authorities’ portal. A taxable person whose taxable turnover exceeds RSD8 million in the previous 12 months is obliged to submit a registration form for VAT to the tax authorities no later than the end of the first period for submitting a VAT return.
Deregistration. A VAT taxable person whose taxable turnover is below RSD8 million in the previ ous 12 months may submit a request for VAT deregistration. This request must contain informa tion about the date when the taxable person ceased to perform VAT activities, and it should be submitted to tax authorities within the calendar month in which said cessation has occurred. Request for deregistration is submitted on a ZBPDV form electronically via the tax authorities’ portal. Along with the ZBPDV form, the taxable person must also submit a census list in PDF form, which must contain the following information:
• Capital assets used within the taxable person’s business, that are held on the date of VAT dereg istration activity, for which there is an obligation to correct the previous input tax deduction claim
• Facilities/buildings where the taxable person carries out its taxable activities, which the taxable person owns on the date of VAT deregistration, for which there is an obligation to correct the previous input tax deduction claim
• Other goods that the taxable person possesses at the date of VAT deregistration, on the basis of which it was entitled to recover its previous input tax deduction claim, or on the basis of which it is obliged to calculate VAT as a tax debtor
• Investments in facilities subject to the obligation to correct the deduction of the previous input tax deduction claim, on the date of VAT deregistration
• Investments in objects for which there would be an obligation to correct the deduction of the previous input tax deduction claim, had they been completed by the date of VAT deregistration
• Given advance funds on the basis of which it was entitled to deduct the previous input tax deduction claim
After conducting the appropriate procedure and if the taxable person’s prior obligations arising from VAT are settled, tax authorities issue a certificate of VAT deregistration on a PBPDV form.
The tax authority merely informs the taxable person that the deregistration process has been suc cessfully completed. Otherwise, the tax authorities would have notified the taxable person elec tronically about any perceived deficiencies via the tax authorities’ portal. This is used for any changes in a taxable person’s status, and as such no additional notifications are required.
Changes to VAT registration details. If the taxable person changes its address, name of company, activity type, etc., such change should be reported to the Serbian Business Register Agency within 15 days (relevant documentation can be submitted online). The Serbian Business Register Agency forwards that information to the tax administration. Also, note that changes such as the change of tax period (e.g., quarterly to monthly) should be requested directly from tax adminis tration by 15 January. From 1 January 2020, such requests must be submitted electronically via the tax administration portal (e-porezi).
D. Rates
The term “taxable supplies” refers to supplies of goods and services that are liable to a rate of VAT, including the zero rate.
The VAT rates are:
• Standard rate: 20%
• Reduced rate: 10%
• Zero-rate: 0%
C OF
The standard rate of VAT applies to all supplies of goods or services unless a specific measure provides for a reduced rate, the zero rate or an exemption.
Examples of goods and services taxable at 0%
• Exported goods
• International transportation services and related supplies
• Supplies of goods and services relating to aircrafts and ships used in international traffic
Examples of goods and services taxable at 10%
• Supply of medicines and medical care devices (e.g., prosthesis)
• Supply of a wide range of food products
The term “exempt” refers to supplies of goods and services that are not liable to VAT and that do not qualify for input tax deduction.
Examples of exempt goods and services
• Properties (except for first-time transfer of ownership)
• Land
• Supply of goods for which acquirer did not have the right to deduct input tax
• Rental of flats if used for housing
• Financial services
• Insurance services
• Postal services
• Education services
• Religious services
• Printing and sale of publications
• Public broadcasting services (except those with commercial character)
Option to tax for exempt supplies. The second and every other transfer of ownership of buildings and building units is not subject to VAT but to non-recoverable transfer tax. However, it is pos sible that the buyer and the seller (as registered taxable persons) instead opt for application of VAT, provided that the buyer is entitled to fully recover VAT deriving from that supply.
E. Time of supply
The time of supply for a supply of goods takes place on the earlier of the following:
• When the supply of goods is performed
• When the payment is made, if the compensation or a part of the compensation has been col lected prior to the sales of goods
• Incurrence of the liability to pay a customs debt on the importation of goods, and if there is no such liability, at the moment on which the liability to pay that debt would arise
A supply of goods is considered to be “performed” on the date when the dispatch or transport of the goods starts or on the date when ownership of the goods is transferred to the purchaser (if transport is not included). The time of supply of imported goods is considered to be the date on which the goods arrive in the Serbian customs territory.
The time of supply for a supply of services takes place on the earlier of the following:
• When the supply of services is performed
• When the payment is made, if the compensation or part of the compensation has been collected prior to the supply of services
• When the invoice is issued – applicable only for the services of transfer of IP rights and grant ing the right to use IP rights
Services are considered to be “performed” on the date when the provision of the individual ser vice is finished or when the legal basis for the provision of time (limited or unlimited service) is
finished. Apart from this, if periodical invoices are issued for the service, the supply of that service is considered finished on the last day of the tax period for which that invoice relates. If the payment is made before the delivery of goods or services, the moment of supply is the moment when the payment is made.
Deposits and prepayments. There are no special time of supply rules in Serbia for deposits and prepayments. As such, the general time of supply rules apply (as outlined above).
Continuous supplies of services. There are no special time of supply rules in Serbia for supplies of continuous supplies of services. As such, the general time of supply rules apply (as outlined above).
Goods sent on approval for sale or return. There are no special time of supply rules in Serbia for supplies of goods sent on approval for sale or return. As such, the general time of supply rules apply (as outlined above).
Reverse-charge services. There are no special time of supply rules in Serbia for supplies of reverse-charge services. As such, the general time of supply rules apply (as outlined above).
Leased assets. The Serbian VAT law does not explicitly distinguish between financial and operat ing leasing. However, there are separate guidelines that set out the conditions that must be fulfilled for a lease to be regarded as a sale of goods. If a lease is regarded as a sale of goods, the time of supply is when the goods are handed over, i.e., the leasing provider issues an invoice containing the total amount of VAT base and the total amount of the calculated VAT. On the other hand, if a lease is regarded as a service, the time of supply is when the leasing provider issues an invoice for each individual lease installment in which the amount of the lease installment and the amount of VAT (calculated on the lease installment) is disclosed.
Imported goods. VAT upon importation is due once the goods are placed in Serbian customs ter ritory unless the goods are placed in some of the suspension customs regimes.
F. Recovery of VAT by taxable persons
A taxable person may recover input tax, which is VAT charged on goods and services supplied to the person for business purposes. A taxable person generally recovers input tax by deducting it from output tax, which is VAT charged on supplies made.
Input tax includes VAT charged on goods and services supplied in Serbia, VAT paid on imports of goods and VAT applied to reverse-charge services.
The time limit for a taxable person to reclaim input tax in Serbia is five years. A taxable person may exercise the right to recover input tax within five years from the day when the statute of limitations began to run, i.e., from the first day of the year following the year in which taxable person acquired the right for reclaiming input tax.
Nondeductible input tax. Effectively, any expenditure that is not business related is nondeductible from an input tax perspective.
Examples of items for which input tax is nondeductible
• In many cases, expenditures related to acquisition and import of cars, boats, yachts, motorcy cles, aircraft, fuel and spare parts, as well as goods and services related to their maintenance and storage
• Expenditure related to business entertainment, including catering, gifts, sporting events, recre ation and other costs incurred in favor of business partners, potential business partners, representatives of business partners and other individuals, for which there is no legal obligation
• Expenditure related to meals and transportation of employees or other persons engaged in work, to or from the work
Examples of items for which input tax is deductible (if related to a taxable business use)
• Accommodation
• Employee expenses
• Car hire
• Business maintenance costs
Partial exemption. If acquired goods or services are used partly for purposes of taxable supplies and partly for exempt supplies, the taxable person may not deduct input tax totally. This situation is known as “partial exemption.” The taxable person should divide that part of the input tax relating to taxable supplies and that which does not relate to taxable supplies, based on the economic background of supply. If this is not possible, then the calculation of the amount of input tax that may be recovered is made on a pro rata basis by using the following formula:
Amount of deductible input tax x taxable turnover + exports Taxable turnover + exports + exempt supplies
Total turnover, which is the divisor in the above equation, is the turnover executed from 1 January of the current year until the end of the tax period for which the VAT return is submitted.
The taxable person is not obliged to perform division of the input tax if the established percent age of proportional VAT deduction is at least 98%.
Approval from the tax authorities is not required to use the partial exemption standard method in Serbia. Special methods are not allowed in Serbia.
Capital goods. Capital goods are facilities and equipment that are used in a business over several years. Input tax is generally deducted in the VAT year in which the goods are acquired. The amount of input tax recovered depends on the taxable person’s partial exemption recovery posi tion in the VAT year of acquisition. However, the amount of input tax recovered for capital goods must be adjusted if the taxable person’s partial exemption recovery percentage changes in the period of 5 years from the first usage of the equipment, 10 years from the first usage of the facilities and 10 years from finishing the investment in the facilities.
A capital goods adjustment applies for a period represented in the difference between the afore mentioned periods (5/10 years) and the period in which the taxable person had the right to deduct input tax. Exceptionally, the taxable person does not have an obligation to adjust input tax on the capital goods in the case of disposal of the equipment and facilities that may be considered as a functional unit.
Refunds. If the input tax is higher than the output tax, the taxable person has a right to obtain a refund or to use this amount as a tax credit. In order to claim the input tax refund, the taxable person must tick the box in its VAT return or by submitting a subsequent request to the tax authorities for the input tax refund.
The refund should be performed, at the latest, 45 days after the deadline for submission of the tax return for the current period (or 15 days after the deadline for the taxable persons who mostly perform supply of goods abroad, i.e., a predominant exporter). The tax administration is liable to pay interest on delayed tax reimbursements at the same rate of penalty interest that applies to taxable persons for late payments of VAT (this is the annual reference rate of the National Bank of Serbia, plus 10 percentage points).
Pre-registration costs. This occurs in the tax period in which the supply of goods with the right to deduct input tax was performed.
The taxable person may deduct input tax for the goods purchased within 12 months before start ing to carry out taxable activities and that are in its possession on said day under fulfilling pre scribed conditions.
Bad debts. Output tax accounted for on supplies that do not get paid by the recipient (i.e., a bad debt) can be recovered in Serbia. The taxable person may claim the bad debt relief on the price that has not been paid by the customer. This is only allowed if they have received a final binding court decision on the completed bankruptcy proceedings and/or on the ground of a certified minutes on compulsory settlement with debtors. No other documentation is required.
Noneconomic activities. Input tax incurred on purchases that are used for noneconomic activities is not recoverable in Serbia.
G. Recovery of VAT by non-established businesses
Non-established businesses may obtain refunds of VAT incurred in Serbia solely if they do not perform any supply of goods or services in Serbia (to the extent the input tax deduction would also be allowed for resident/established businesses), except for international transportation services and under the terms of reciprocity. The refund request is submitted annually, and the dead line for submission is 30 June for the purchases made in previous year.
H. Invoicing
VAT invoices. A taxable person must provide a VAT invoice for all taxable supplies made, including exports. The invoice must comply with the requirements set out in the VAT law and the rulebook on VAT (in force as of 1 July 2021).
Credit notes. A VAT credit note may be used to reduce the VAT charged on a supply of goods or services – provided the buyer is a taxable person and has confirmed that the input tax has been corrected; a debit note may be used to increase the amount of VAT. Tax credit and debit notes must be cross-referenced to the original VAT invoice.
Electronic invoicing. Electronic invoicing is not allowed in Serbia. Serbia has no explicit regula tory framework allowing electronic invoicing for VAT purposes. However, a law on electronic invoicing, as well as bylaws in this domain, were adopted in 2021. It is expected that the introduc tion of mandatory electronic invoices will take place in several phases in the near future. At the time of preparing this chapter, no further details have been announced.
Simplified VAT invoices. Simplified VAT invoicing is not allowed in Serbia. As such, full VAT invoices are required.
Self-billing. In general, the taxable person who makes taxable sale of goods and services is obli gated to issue an invoice. However, under certain conditions, the invoice may also be issued by the recipient of the goods and services. Specifically, self-billing is allowed under the following conditions:
• The customer receiving goods and services is registered for VAT in Serbia and therefore has the right to state VAT on the invoice
• There is an agreement between the taxable persons issuing and receiving accounting document that the sale of goods and services is to be accounted for by the recipient of goods and ser vices
• The accounting document has been presented to the taxable person who has delivered the goods or services
• The taxable person who has supplied the goods and services is not in VAT debt with the tax authorities
Proof of exports. For proof of exports, an export declaration with confirmation that the goods have left Serbian territory is required.
Foreign currency invoices. A Serbian VAT invoice for domestic supplies must be issued in the domestic currency, which is the Serbian dinar (RSD). If an invoice is received in a foreign cur rency, the amounts must be converted into RSD. The exchange rate used for imports is determined by customs, while the exchange rate for domestic VAT supplies is the middle exchange rate published by the National Bank of Serbia or the agreed exchange rate applicable on the date when the tax obligation takes place.
As of 1 July 2021, if the fee for the supply of goods or services is charged in a foreign currency, the amount of the base and the amount of VAT (or the amount of fee for individual transaction of goods and services) may be denominated in the foreign currency, while the data on the total amount of the base and the total amount of VAT, i.e., on the total amount of the fee, must be denominated in RSD.
Supplies to nontaxable persons. There are no special invoicing rules for supplies to nontaxable persons in Serbia. As such, full VAT invoices are required.
Records. Taxable persons are obliged to keep the records of received invoices/transactions and records of issued invoices/transactions. Such evidence should contain certain data on invoice or customs declaration number (in case of import), the net fee paid, the applicable VAT rate, the amount of calculated VAT, the total amount of turnover during one VAT period and other data.
Restrictions regarding the place of storage of documentation are not explicitly prescribed in the Serbian VAT law. However, there are special conditions that must be met in terms of providing access to data to the competent state authorities to possibly conduct control of the legality of business. Therefore, the system of document storage should, among other things, enable access and export of data in a readable form, which is suitable for further processing by the competent state authorities for control purposes.
Record retention period. VAT records and all supporting documents based on which the VAT records are maintained (e.g., invoices) should be kept until the expiry of statute of limitation period for determination and collection of VAT (statute of limitation period is 5 years; absolute limitation is 10 years).
Electronic archiving. The law on accounting prescribes that accounting documents may be stored on electronic media as original electronic documents or digital copies, provided that the compe tent authority has access to the information so stored and provided:
• That the information contained in the electronic document or record can be accessed and is suitable for further processing
• That the data is stored in the form in which it was created, sent and received
• That sender, recipient, time and place of sending and receiving can be determined from the saved electronic message
• Technologies and procedures are applied to sufficiently secure against alteration or erasure of data or other reliable means of guaranteeing the invariability of data or messages, as well as backup database at another location
Hence, both the e-invoice and the email message should be achieved on the computer. Also, note that if the original document is in paper form and then digitized and authenticated in accordance with the law regarding electronic documentation, such document gives the probative power of the original (paper) document, but the authentication of the digitized document does not mean that the original document can be destroyed. In this case, according to the regulations currently in force, the paper original must be kept.
I. Returns and payments
Periodic returns. The tax period is a calendar month or a quarter depending on the total turnover of the particular taxable person in the last 12 months (if turnover exceeds RSD50 million).
Both monthly and quarterly taxable persons must submit the tax return within 15 days after the expiration of the tax period.
The obligation to file the VAT calculation breakdown along with the VAT return has been ini tially postponed due to the fact that the first version of VAT calculation breakdown was too burdensome from the perspective of both taxable persons and tax authorities.
Taxable persons are also obliged to file a POPDV form along with the VAT return (see Supplementary filings below).
Periodic payments. The deadline for VAT payment is the same as the deadline for the filing of VAT returns, i.e., within 15 days after the expiration of the tax period. Upon submitting the VAT return electronically via the portal, e-porezi, the taxable person pays the VAT liability by transfer ring funds to the prescribed public revenue account. The VAT payable by a taxable person for a tax period equals the VAT on the total taxable value of supplies made during the tax period minus any input tax allowed as a deduction.
Electronic filing. Electronic filing is mandatory in Serbia for all taxable persons. The submission of a VAT return, as well as the submission of an amended VAT return, is completed electronically. The return is submitted on the prescribed PPPDV form. Taxable persons must use the “E-Taxes portal.” It collects electronic services for the Serbian tax administration, enables all taxable per sons to submit online tax forms with digital signatures, provides follow up on the status of submit ted applications with insight into the taxable person’s tax card and provides faster and simpler fulfillment of obligations toward tax administration. This system meets high security standards that enable safe and uncompromised electronic data transfer.
Payments on account. Payments on account are not required in Serbia.
Special schemes. Cash accounting. Small and medium-sized enterprises with an annual turnover of less than RSD50 million may opt to pay VAT after they have received payment.
Collection system. The taxable person whose total turnover in the previous 12 months is not more than RSD50 million may opt for reporting and paying the VAT once the receivables are collected (whereby input tax is also reported once the payables are settled). VAT is also due if the payment is not received within six months after the supply was performed. Certain types of supplies pre scribed by the law are exempt of the application of this “collection system.”
Investment gold. Generally, VAT is not calculated on the supply of investment gold. The taxable person who performs the mentioned supply has the right to deduct the VAT for that supply. Exceptionally, the taxable person may, under certain conditions, opt for VAT calculation for investment gold supply.
Small taxable persons. Small taxable persons do not charge VAT for performed trade of goods and services, do not have the right to indicate the VAT in invoices and are not entitled to deduct input tax. Also, they are not required to keep records prescribed by VAT law.
Tour operator’s scheme. Tourist services provided by a tourist agency are considered as a single service. The place of trade of a single tourist service is the place where the service provider has its head office or a permanent establishment if the trade of service is carried out from a perma nent establishment that is not in the place where the provider has its head office. The tax base of the single tourist service provided by a tourist agency is the amount representing the difference between total price paid by a passenger and actual expenses paid by the tourist agency for preliminary tourist services, after deducting the VAT that is included in that difference.
Works of art, secondhand goods, antique goods. Taxable persons engaged in the trade of used goods, including secondhand motor vehicles, fine arts works, collector’s goods and antiques, determine
tax base as a difference between the sale price and the purchase price of the goods by deducting the VAT that is included in that difference.
Annual returns. Annual returns are not required in Serbia.
Supplementary filings. POPDV. Taxable persons are also obliged to file a POPDV form along with the VAT return. The Pregled obracuna PDV (POPDV) is the official name of the form and in English would be “Form and Content of the Overview of VAT Calculation.” The form provides an overview of the VAT calculations that support the VAT return figures. If the taxable person fails to file the VAT calculation breakdown on the POPDV form along with the VAT return, it will be deemed as if the VAT return was not filed at all.
Correcting errors in previous returns. If the taxable person finds that the tax return submitted to the tax administration contains an error that results in an incorrectly determined amount of tax liability, or an omission of another type, he is obliged to immediately and no later than the expi ration of the statute of limitations, file a tax return in which the error or omission has been recti fied. If the taxable person acts in the stated manner, it shall be considered that no criminal offense or misdemeanor has been committed in the original tax return.
The taxable person may change the submitted tax return no more than twice by submitting the amended tax return.
Digital tax administration. There are no transactional reporting requirements in Serbia.
J. Penalties
Penalties for late registration. If a taxable person who is a legal entity fails to register for VAT, a fine ranging from RSD100,000 to RSD2 million will apply. Also, a responsible person within the legal entity will be fined in the amount from RSD10,000 to RSD100,000 in case of relevant offense. If a legal entity submits the registration form after the prescribed deadline, penalties of RSD100,000 may be imposed. Also, a responsible person within the legal entity will be fined in the amount of RSD10,000 in case of said offense.
Penalties for late payment and filings. For late payment and filing of a VAT return, a monetary penalty of RSD100,000 is prescribed for the legal entity and RSD50,000 for the responsible person.
Penalties for errors. If the taxable person establishes that the tax return, which he submitted to the tax administration contains an error that results in a wrongly determined amount of tax liabil ity, or omission of another kind, he is obliged to immediately file, and no later than the expiration of the expiration date, a tax return in which the error is, or omission is, remedied. The taxable person may amend the tax return no more than twice by filing the amended tax return.
Incorrect VAT reporting may lead to a penalty of 30% of the difference between the correct VAT amount that should have been reported and the unreported/incorrectly reported VAT amount, but RSD200,000 at the minimum for legal entity, and a penalty in the range from RSD10,000 to RSD100,000 for the responsible person.
Late notification of any changes to a taxable person’s VAT registration details to the Serbian Business Register Agency may result in a penalty of RSD6,000 (approx. EUR51). See the sub section above Changes to VAT registration details for more information.
Penalties for fraud. Serbian criminal law stipulates that whoever with intent to fully or partially avoid payment of taxes, contributions or other statutory liabilities, gives false information on legal income, objects and other facts relevant to determination of such obligations, or who with the same intent, in case of mandatory reporting (filing of returns) fails to report lawful income, objects and other facts relevant to determination of such obligations, or who with the same intent
conceals information relevant for determination of aforementioned obligations, and the amount of obligation whose payment is avoided exceeds RSD1 million, shall be punished by imprison ment of up to five years and fined.
Please note that if the mentioned tax liability exceeds RSD5 million, the offender shall be pun ished by imprisonment of 2 to 8 years and fined, and if tax liability exceeds RSD15 million, offenders shall be punished by imprisonment of 3 to 10 years and fined. As the law uses the term “whoever,” this also includes the liability of directors and individuals responsible.
In addition, note that a legal person may be liable for criminal offenses from a separate part of the criminal law and other laws, provided that the conditions for liability of the legal person are fulfilled.
Personal liability for company officers. The general rule from both criminal and offense legislation is that the responsible person in the legal entity is the person who on the basis of the law, regula tion or authorization conducts certain managerial, supervisory or other functions in the company, as well as the person who factually conducts certain work – substance over form. This is, presum ably, a director, although it can be proved that some other person/company official has been liable for certain activities of the company.
In Serbian legislation, directors (and other responsible representatives) may be held liable for both offenses and fined or even have criminal liability. Fines for the misdemeanors can reach up to RSD150,000 for the responsible representatives of the legal entity.
When initiating procedures for the misdemeanors, the tax authorities will most often charge both the legal entity and the responsible representative for the same irregularity.
Statute of limitations. The statute of limitations in Serbia is five years. The statute of limitation period (for all taxes) in Serbia in which the tax authority may go back and assess additional tax liabilities is generally set at five years. The prescribed five years start counting from the year following the year in which tax liability was due. Also, the absolute statute of limitation is set at 10 years.
Related to penalties, note that the tax authority is entitled to initiate and complete the tax offense procedure within five years from the date when the tax offense occurred.
For more details on voluntarily correction of errors in previous VAT returns, see the Correcting errors in previous returns subsection above.