At the session held on April 19 2018, the National Assembly of the Republic of Serbia adopted a proposal for the Law on Amendments to the Value Added Tax (Law). The adopted Law was published in the Official Gazette of RS No. 30 dated 20 April 2018. The law shall apply from 1 July 2018, except for provisions concerning VAT refunds to a foreign party to be applied from 1 January 2019. An overview of the most important changes is given below.
Issuing an account as the moment of the creation of a VAT obligation
It is anticipated that the issue of an invoice shall be deemed to be the moment of incurring a VAT obligation not only for the traffic of copyright and related rights and intellectual property rights, but also for services directly linked to those transactions, if provided by the same person, and if the invoice is issued before the transaction , or payments.
Expanding the application of a special rate
It is envisaged to apply a special rate of 10% to the marketing and import of complete and supplementary feed for livestock.
Tax exemption with the right to deduct the previous tax
A new tax exemption is foreseen with the right to deduct the previous tax for the sale of goods that are entered into the free zone, transport and other services related to such entry and circulation of goods in the free zone, if it is done by a foreign person who has concluded a contract with the VAT payer – free zones, to incorporate these goods into goods intended for dispatches abroad.
Changing the conditions for VAT refund to a foreign taxpayer
The conditions for VAT refund to the foreign taxpayer with the application from January 1, 2019 are redefined. It is envisaged that the foreign taxpayer is entitled to a VAT refund and if he performs the trade of goods and services for which the obligation to charge VAT has a VAT payer – the recipient of goods or services. This allows the right to refund also to foreign persons who are not registered for VAT in Serbia, and the turnover tax in Serbia is performed by persons who are VAT payers.