The National Assembly of the Republic of Serbia adopted amendments to the Law on Value Added Tax, the Law on Foreign Currency Transactions and the Law on Tax Procedure and Tax Administration, which were published in the Official Gazette of the Republic of Serbia No. 30 dated 20 April 2018.
Information about the most important changes to these Laws as well as their effective date can be found In the following text.
For any additional questions, TPA team is at your disposal.
THE LAW ON VALUE ADDED TAX
Effective date 1 July 2018
- The obligation to calculate the VAT which arises in case of issuing of an invoice is extended to services directly related to the transfer, assingment and use of copyright and related rights, licenses and other intellectual property rights provided by the same person
- The tax exemption is prescribed for the sale of goods which enter into a free trade zone and the trade of goods in the free trade zone to a foreign person who has a contract concluded with a taxpayer – free trade zone user in case these goods will be fitted into goods intended for dispatches abroad
Effective date 1 January 2019
- Foreign taxpayers who carry out taxable trade in Serbia for which the recipient of goods and services is tax debtor and consequently do not have the obligation to register for VAT, have the right to VAT refund
THE LAW ON FOREIGN EXCHANGE OPERATIONS
Effective date 28 April 2018
- A resident natural person can take credit facilities and loans from non-residents from the European Union and with a repayment period shorter than one year. However, branch offices of foreign legal entities may take such credit facilties and loans only from a non-resident founder with headquarters in the European Union
- The condition that a resident legal entity may approve financial credit facilities only to nonresidents which are in majority ownership of the resident-lender is abolished
- When transferring payables arising from realized foreign trade, the debtor’s obligation (as a debt transferor) to acquire the consent of the creditor of the underlying transaction prior to the transfer was introduced
- In addition to the written form, credit facility operations may also be concluded in electronic form or on a permanent data medium which enables the storage and reproduction of the original data in the unchanged form
THE LAW ON TAX PROCEDURE AND TAX ADMINISTRATION
Effective date 28 April 2018
- It is precisely defined what is considered an error or omission in the filed tax return, i.e. it is stipulated that if the taxpayer establishes that the filed tax return contains an error which results in an incorrectly established amount of tax liability, or another type of failure, he is obliged to file an amended tax return in which errors or omissions have been rectified.
- Also, it is stipulated that the taxpayer cannot file an amended VAT tax return in which the decision of refund is changed
- It is stipulated that if a taxpayer made a decision on VAT refund in accordance with the Law on VAT, the amount of VAT refund is reduced for the amount of tax due on another basis
- The option of a grace period of up to 12 months is envisaged for taxpayers to whom rescheduling of the tax debt is approved and settlement is in equal installments during a period of up to 60 months. Taxpayers who are in the process of reorganization or have concluded a financial restructuring agreement and to whom rescheduling of the tax debt is approved with the settlement in equal installments of up to 60 months, has been given the possibility of a grace period for the first 24 months.
- The measure of prohibition of performance of business activity for a taxpayer to whom, in the course of audit, irregularities has been found (e.g. does not deposit daily sales receipts, does not issue fiscal bills, goods and services are not accompanied by authentic documents ) is imposed for up to 15 days for irregularity established for the first time, up to 90 days for irregularity established for the second time and up to one year for irregularity established for the third time. For the imposition of measures of prohibition of activity the relevant period is 24 months from the first identified irregularities
- Pecuniary and imprisonment penalties for unfounded tax credit and tax refunds in the previous 12 months have been increased (regardless of whether it is based on one or more tax returns)
- The possibility of passing tax act in electronic form is introduced in accordance with the Law on Electronic Document. Also, the possibility of delivering tax documents acts to the taxpayer via e-mail is introduced
- The possibility is introduced for the Tax Administration to send a reminder in written or electronic way, as well as an SMS message, even before tax liability is due or the issuance of a notice
- The previous measures of the Tax Administration to secure collection of tax owed
- The secondary tax liability is introduced for all forms of tax (instead of the withholding tax) for persons who have not acted with due care
Effective date 27 August 2018
- The taxpayer is obliged to submit to the Tax Administration data on all business premises in which he warehouses or stores goods or in which he performs a registered activity, regardless of whether the legal basis for the use of the premises is ownership or lease, and regardless of the type of business activity for which premises are being used. In this regard, the illegal warehousing of goods is considered to be a tax crime and the imprisonment of three months to three years as well as a fine is prescribed to those who warehouse or store goods in premises about which the Tax Administration is not informed.
The obligation to provide data also refers to the existing premises in which the activity is performed, and for which data have not been provided to the Tax Administration.
Effective date 1 January 2019
- It is obligatory to submit a tax return for property tax electronically for legal entities, while individuals will still be able to submit the application in paper form
- The Tax Administration will perform tax services (new function) aimed at assisting taxpayers in fulfilling their rights and obligations
- The Tax Administration is obliged to issue an additional audit report within 5 days from the filing of objections
- Tax inspectors have the possibility to issue an addition to the audit report in case of determining a new facts or circumstances after making the audit report or supplementary audit report
- The National Bank of Serbia is in charge for Issuing and revoking authorizations for performing exchange transactions, control of exchange transactions and control of foreign exchange operations
