Amendments to the Value Added Tax (VAT) Law has been published in the Official Gazette of the Republic of Serbia No. 72/2019 dated 7 October 2019. The most important amendments of law are presented below, applicable from 1. January 2020 besides provisions regarding VAT refund to nonresident citizen and supply of goods and services for infrastructure projects of motor highway construction, applicable from day of law coming into force, i.e. 15 October 2019.
Value voucher is newly introduced instrument for which there is acceptance obligation regarding compensation for supply of goods or services provided, if data about such supply, provider identity and voucher conditions are indicated in voucher itself or related documentation. Value voucher can be used in electronic or physical form. Instruments used solely for discount of goods or services without right of purchase are not considered as value vouchers. Additionally, transport tickets, entrance tickets, postal card etc. are not considered as value vouchers.
Type of value voucher varies if all necessary elements for calculation of VAT (especially VAT rate and place of supply) are known in moment of voucher issuance:
- Single-purpose voucher – transfer of single-purpose voucher is VAT taxable in moment of voucher transfer to another party (all elements for calculation of VAT are detected) by VAT rate used for taxation of goods or services in voucher, while delivery of those goods or services alone will not be taxed. Further, if there are several participants, VAT taxpayers who transfer voucher on their behalf, each transfer is considered as supply of goods or services from VAT Law perspective. If transfer of single-purpose voucher was made by taxpayer in the name of another taxpayer, such transfer is considered taxable while party for which voucher was transferred is in position of taxpayer. Taxpayer who transfer voucher in the name of another taxpayer, performs mediation service for supply for which the voucher is issued.
- Multi-purpose voucher – transfer of multi-purpose voucher is not VAT taxable in moment of transfer (every element for VAT calculation is not detected), while delivery of goods or services in voucher is taxed when voucher is realized i.e. supply of goods or services take place. In situation, when taxpayer transfers multi-purpose voucher to another taxpayer that performs supply of goods or services in voucher, it is considered that taxpayer – voucher transferor, performs distribution, advertising, or other VAT taxable services. Actual delivery of goods or services in voucher will be VAT taxable when supply of goods or services from voucher take place, while obligation of VAT calculation is up to taxpayer that performs supply of goods or services.
New provisions of the law prescribe additional exclusion from calculation of proportionate VAT deduction beside supply of equipment and objects used for performing business activity, that include investments in objects for performing business activity with chargeable fee, periodical supply of immovables for taxpayer who does not occasionally perform this activity, as well as periodical supply which VAT is exempted without right to deduct input VAT. Periodical supply is considered as maximum of two supply per year.
Rules on place of goods supply and meal delivery services that take place on ship, aircraft or train during the passenger transport have changed. Place of supply for mentioned goods and services is considered to be departure place of transport vehicles. Place of aforementioned supply in case of round trip is considered to be the place where transport vehicle started back to it’s starting point. To determine place of supply when taxpayer’s place of permanent residence and inhabitancy are not the same, place of supply is considered to be taxpayer’s inhabitancy place.
Alongside the law amendments considering telecommunication and electronic services, new Rulebook containing description of mentioned services and place of its trade has been published. Head office, permanent establishment, permanent residence or inhabitancy place of service recipient is to be considered as place of supply if recipient’s physical presence is necessary for service provision. In case when recipient’s physical presence is not necessary for service provision, place of supply of service is considered to be location of landline phone connection, country that mobile card for services belongs to, decoder or similar device location or place that provider of services choose based on evidence prescribed in the Rulebook.
Rule on determination of time for tax liability occurrence regarding transfer, assignment and lease of intellectual property rights and other copyrights has changed. New provision prescribes that occurrence of tax liability can take place even before supply date, i.e. occurring with the day of receipt issue, including services directly related to aforementioned services regardless if provider is the same party, as well as technical support services regarding software, hardware and other equipment used for certain period of time.
To exercise the right on VAT refund for nonresident passengers who ship goods abroad, bought for noncommercial purposes in personal luggage, value of mentioned goods has to reach minimum of 6.000 RSD including VAT, instead of 100 EUR previously prescribed. Further, deadline for delivering a proof goods are shipped abroad to exercise VAT refund right is extended to 12 months after day of shipment. VAT taxpayer that made supply of these goods is due to issue documentation representing basis for VAT refund on request of nonresident citizen.
Tax exemption with right to deduct input VAT is prescribed for supply that occurs within infrastructure projects of motor highway construction, regulated as public interest by separate law. Specific VAT records with specific data has to be conducted for mentioned kind of supply, according to amendments made to Rulebook on Form, Content and Method of Keeping VAT Records. It is important to emphasize that amendments made to such Rulebook did not affect content of POPDV form.
Possibility for correction of mistakenly calculated VAT stated in invoice in higher amount then according to the VAT Law is more precisely stipulated by new amended law. To exercise the right on VAT amount correction stated in invoice, taxpayer has to possess document of the recipient stipulating that input VAT was not exercised for deduction, and to issue a new invoice with corrected VAT amount containing note that old invoice is being replaced with the new one. Further, it is prescribed there is no possibility of correction for mistakenly stated VAT for parties which are registered for VAT.