Amendments to the VAT Law, the Law on Electronic Invoicing and the Regulation on Determining Activities in Which There Is No Obligation to Record Retail Transactions Using an Electronic Fiscal Device are adopted

At the session held on December 9, 2022, the National Assembly of the Republic of Serbia adopted the Law on Amendments to the VAT Law. With the adoption of the mentioned Law, additional harmonization with European legislation, but also with the legislation regulating the field of e-invoicing, was carried out. The respective changes will enter into force on January 1, 2023.

In this regard, please find below the most significant changes:

1) It is specified that persons who supply goods that are in the procedure of customs storage will not be obliged to register for VAT in Serbia, i.e. they are not obliged to appoint a tax representative.

2) Exercising the right to deduct previous tax based on an e-invoice - The right to deduct previous tax can be exercised only on the basis of an e-invoice that is considered accepted in accordance with the Law on Electronic Invoicing.

Also, if such an e-invoice is accepted no later than the deadline for submitting the tax return for the tax period in which the tax liability arose in accordance with the VAT Law, the taxpayer will be able to exercise the right to deduct the previous tax at the earliest for the tax period in which the tax liability arose, regardless of whether the e-invoice was issued on the day the tax liability arose or after that day.

In addition to the above, the National Assembly also adopted the Law on Amendments to the Law on Electronic Invoicing with the aim of additional clarification and legal technical regulation of the existing provisions in certain segments. Amendments to this Law shall also enter into force on January 1, 2023.

By the aforementioned Law:
1) It is specified that public utility companies represent public sector entities;

2) It is prescribed that the obligation to issue electronic invoices will not exist in the case of the supply of goods and services without compensation;

3) The obligation of electronic VAT registration on the e-Invoice portal was additionally specified. Namely, logging can be:

- Collectively, for all obligations, whereby the data on the VAT base and calculated VAT is presented, by corresponsive VAT rates (e.g. when calculating VAT in the case when the transaction is made to individuals in Serbia);

- Individually for each obligation, whereby the data on the VAT base, VAT rate and calculated VAT should be reported for the following types of transactions:

a) supply of goods and services, including an advance payment, for which the recipient of the goods and services is a tax debtor in accordance with the VAT Law (e.g. when calculating VAT when applying the reverse charge mechanism for foreign services);

b) supply of goods and services that is carried out with compensation to the tax payer on income from self-employment in line with the Law governing personal income tax and to the tax payer on the profit of legal persons in the sense of the law governing the capital income tax, including the received advance payment, for which the supplier of goods, i.e. the service provider is a tax payer in accordance with the VAT Law (e.g. VAT calculated on sales to legal entities and entrepreneurs who are not liable for VAT, nor voluntary users of the e-invoice portal).

4) The possibility of subsequent acceptance of the electronic invoice is prescribed;

5) The case of sending e-invoices through the e-Faktura portal in the event of a temporary interruption in its work has been additionally specified - Namely, in the event of a temporary interruption in the work of e-Invoice portal, the electronic invoice will be considered delivered at the moment of re-establishment of the electronic invoice system. The procedure in the event of a temporary interruption in the operation of the e-Faktura portal will be additionally regulated by the Act of the minister responsible for financial affairs, which will be adopted within 3 months from the date of entry into force of this Law.

Furthermore, the Government of the Republic of Serbia adopted the Decree on Amendments to the Decree on Determining Activities in Which There Is No Obligation to Record Retail Transactions via an Electronic Fiscal Device (hereinafter: the Decree), which enters into force on December 31, 2022.

The most significant novelty is the introduction of the exemption from the obligation to register through an electronic fiscal device when it comes to marketing services provided in a retail establishment to legal entities, i.e. taxpayers on income from self-employment, in the sense of the law regulating personal income tax. In other words, product positioning services and other marketing services provided to legal entities - suppliers are exempted from fiscalization and there will be no obligation to issue an electronic fiscal invoice when providing these services.

Finally, the Regulation regulates the extension of the transitional period during which persons will not be obliged to record retail sales through an electronic fiscal device for those subject to fiscalization who are engaged in sales at market stalls and similar facilities. The transition period is extended until December 31, 2023.