Rulebook on the amendments of Rulebook on content of tax balance sheet and other issues relevant for the assessment of corporate income tax and Rulebook on the amendments of Rulebook on content of corporate income tax return

We hereby wish to inform you that rulebooks relevant for the assessment of corporate income tax for 2020 were published on 30 December 2020:

1. Rulebook on the amendments of Rulebook on content of tax balance sheet and other issues relevant for the assessment of corporate income tax

2. Rulebook on the amendments of Rulebook on content of corporate income tax return

In addition, amendments to the following rulebooks regarding value-added tax have been published, which are accompanied by amendments to the Law on Value-Added Tax (hereinafter: the “VAT Law”):

1) Rulebook on the manner and procedure of realizing tax exemptions with the right to deduct input VAT;

2) Rulebook on the manner of determining and correcting the proportional tax deduction;

3) Rulebook on the manner of determining the tax base for calculating VAT on the supply of goods or services performed for a consideration;

4) Rulebook on the form, content and manner of keeping record of VAT and on the form and content of the VAT calculation breakdown;

5) Rulebook on the form and content of the registration of VAT payers, the procedure of registration and deregistration and on the form and content of the VAT return;

6) Rulebook on determining goods and services in the field of construction for the purpose of determining the tax debtor for VAT.

In addition, a completely new Rulebook on determining goods that are considered to be used goods, works of art, collectibles and antiques was adopted.

Details of the amendments to the above bylaws can be found in the text that follows.

1. Rulebook on the amendments of the Rulebook on content of tax balance sheet and other issues relevant for the assessment of corporate income tax

The most important provisions of Rulebook on the amendments of Rulebook on content of tax balance sheet and other issues relevant for the assessment of corporate income tax (“Official Gazette of RS”, No. 159/2020, hereinafter: “Amendments of Rulebook on tax balance sheet”) relates to introduction of new OPKB form – Calculation of tax credit for banks, whereby tax credit based on conversion of housing loans indexed in Swiss francs is determined, in accordance with Article 50k of the Law. Furthermore, it is defined that OPKB form should not be filed as an annex to the tax return.

Additionally, amendments of Rulebook on tax balance sheet provides harmonization of Annex 1 with the amendments in Article 53a of the Law, i.e. granting of tax credit to resident taxpayers related to service fees on which tax is paid in other country. That being said, besides income categories that were previously recognized in Annex 1 (interest, royalties, lease of moveable and immoveable property and dividends which do not meet the condition for application of tax credit from Article 52 of the Law), it is now defined that Annex 1 is also used in case of services for which tax is paid in other country. Consequently, item 39 of corporate income tax balance sheet also includes information on service revenues, on which withholding tax is paid abroad.
 

2. Rulebook on the amendments of the Rulebook on content of corporate income tax return

Rulebook on the amendments of Rulebook on content of corporate income tax return prescribes that items of tax return that present the amounts from PK and PK1 form will also include tax credit of banks, based on conversion of housing loans indexed in Swiss francs. 

3. Rulebook on the amendments of the Rulebook on the manner and procedure of realizing tax exemptions with the right to deduct input VAT

Rulebook on the amendments of Rulebook on the manner and procedure of realizing tax exemptions with the right to deduct input VAT anticipates an additional Article 13a, which provides for tax exemption from Article 24 paragraph 1 item 7a) of the VAT Law, for the sale of goods in inward processing procedure for which the recipient would have the right to deduct the previous tax if VAT would be computed on such goods, in case the taxpayer obtains the following:

1) a declaration, i.e. a certified copy of the declaration proving that the goods are in the process of inward processing, in accordance with customs regulations;

2) invoice for delivery of goods issued in accordance with the VAT Law.

In addition to the declaration, the taxpayer may also obtain the tax exemption if an approval, i.e. a certified copy of the approval of the customs authority for the inward processing procedure is obtained, in accordance with customs regulations.
 

4. Rulebook on the amendments of the Rulebook on the manner of determining and correcting the proportional tax deduction

Rulebook on the amendments of the Rulebook on the manner of determining and correcting the proportional tax deduction anticipates an additional paragraph 2 item 5) of Article 25 referring to shares, securities, postal securities, taxes and other valid securities, in addition to the occasional supply of services already referred to in Article 25 paragraph 1, which are not included in the supply of goods and services for the purposes of determining the proportional tax deduction. 

5. Rulebook on the amendments of the Rulebook on the manner of determining the tax base for calculating VAT on the supply of goods or services performed for a consideration

Rulebook on the amendments of the Rulebook on the manner of determining the tax base for calculating VAT on the supply of goods or services performed for a consideration provides for minor changes in the part relating to the tax base referred to in Article 2 paragraph 4, which, in accordance with item 2), does not contain the amounts that the taxpayer collects in the name and for the account of another taxpayer, if such amounts are transferred to the entity/person in whose name and for whose account the collection is made and if such amounts are separately recorded.

Additionally, item 3) is added, which anticipates that the tax base also does not contain the amounts claimed by the taxpayer for expenditures made in the name and for the account of the recipient of goods or services, if such amounts are separately recorded.

Furthermore, paragraphs 5 and 6 are added, which refer to the manner of recording and stating the previously mentioned amounts on the invoice.
 

6. Rulebook on the amendments of the Rulebook on the form, content and manner of keeping record of VAT and on the form and content of the VAT calculation breakdown

In the Rulebook on the amendments of the Rulebook on the form, content and manner of keeping record of VAT and on the form and content of the VAT calculation breakdown, paragraph 5 of Article 32 is removed, which refers to data related to the trade of goods from Article 36 of the VAT Law that is not subject to VAT, and which should not be stated in the VAT calculation breakdown.

7. Rulebook on the amendments of the Rulebook on the form and content of the registration of VAT payers, the procedure of registration and deregistration and on the form and content of the VAT return

Rulebook on the amendments of the Rulebook on the form and content of the registration of VAT payers, the procedure of registration and deregistration and on the form and content of the VAT return predicts a company that manages an open or alternative investment fund as data for necessary for identifying the person submitting the registration application, as well as the registration number of such company that should be stated in the application.

8. Rulebook on the amendments of the Rulebook on determining goods and services in the field of construction for the purpose of determining the tax debtor for VAT

Rulebook on the amendments of the Rulebook on the amendments of the Rulebook on determining goods and services in the field of construction for the purpose of determining the tax debtor for VAT provides for a threshold in the amount of RSD 500,000, excluding VAT, for the purpose of determining the supply in the field of construction in accordance with Article 10 paragraph 2 item 3) of the VAT Law, which is determined on the day when the supply is performed. The mentioned value also refers to the partial delivery of goods, i.e. the provision of services.

That being said, if a payment is made that is considered to be an advance payment at the time of the supply in the field of construction, after which the VAT payer performs a supply that is not considered to be a supply in the field of construction, the VAT payer is obligated to compute VAT in accordance with the Law, and the recipient of goods, i.e. services should correct the computed VAT and VAT that was deducted as input VAT.

On the other hand, if a payment is made that is not considered to be an advance payment at the time of the supply in the field of construction, after which the VAT payer performs a supply that is considered to be a supply in the field of construction, the VAT payer that performed that supply has the right to cancel the advance payment invoice and correct the computed VAT, under the condition that a document confirming that the recipient did not deduct input VAT is obtained, while the recipient of goods and/or services in the field of construction computes VAT on such supply.
 

9. Rulebook on determining goods that are considered to be used goods, works of art, collectibles and antiques is introduced

The new Rulebook on determining goods that are considered to be used goods, works of art, collectibles and antiques regulates in more details what, in terms of Article 36 of the Law on VAT, is considered used goods, works of art, collectibles and antiques, but without substantial changes in relation to the previously valid bylaw in this area.