New Ruling of the Ministry of Finance regarding the VAT treatment of a part of the granted discount

The Ministry of Finance of the Republic of Serbia has adopted a Ruling no. 430-00-60/2020-04 on July 5, 2022, whereby it has determined the VAT treatment of part of the discount in cases where the seller has subsequently approved it to the buyer in the same period in which it has performed the supply of goods at price, which is lower that the approved discount, all with the intention to use the difference in funds to pay future supplies that the seller would make to the buyer (hereinafter: the Ruling).

The Ministry of Finance determined in the relevant Ruling that, in the case when the seller subsequently grants a discount to the buyer in the period in which it has performed the supply of goods at a price lower than the approved discount, the VAT treatment of the remaining amount of funds would depend on the nature of the business relationship between the seller and the buyer.

Namely, in the case where, on the basis of the business relationship established between the seller and the buyer, it can be almost certainly concluded what the characteristics of the future supply would be, the Ministry of Finance is of the opinion that in such case the difference between the value of the discount and the value of the supply would represent an advance payment, based on which the VAT payer (in case at hand, the seller) should calculate VAT.

On the other hand, if the seller and the buyer concluded several different agreements based on which the seller performs supplies with different tax treatment, in such case the difference between the value of the discount and the value of the supply could not be considered as an advance payment. In other words, on this basis, there would be no obligation to calculate VAT for the VAT payer (that is, the seller).

Having in mind all above said, the Ministry of Finance is of the opinion that it would be necessary to determine whether the mentioned funds would be determinable or not, and the tax treatment thereof would depend on such information.
 

Contact:

Anđelija Milićević

email: amilicevic@deloittece.com

Tel: +381 (11) 3812224

Nebojša Jovanović

email: nebjovanovic@deloittece.com

Tel: +381 (11) 3819133