VAT

Last reviewed 21 Aug 2023

Tax rates

Standard VAT rate: 20 %

Reduced rate: 10 % (basic foodstuffs - bread, milk, flour, cooking oil, fresh and frozen fruits, vegetables, meat, fish and eggs, listed drugs, agricultural fertilizers, pesticides, textbooks, daily newspapers, accommodation services, public utility services gas, first transfer of ownership on resi- dential buildings, secondary raw materials, etc.)

Flat rate scheme for farmers: 8 %

Supply of goods

Supplies of goods with consideration, withdrawal for private use (self supply) as well as any other supply without consideration on the territory of Serbia are taxable Import of goods in Serbia is taxable.

Place of supply of goods

Principally the place where the item is located at the time disposal is transferred (static supply).

In case of dispatch/transportation by the supplier or purchaser: the place where dispatch/transpor- tation begins (moving supply).

Importation from third country: Import country.

Supply of services

Supply of services with consideration, private use as well as supply of services without consideration for non-business purposes are taxable.

Place of supply of services

If supply is made to taxable person, place of supply is place of recipient (place where the recipient has established its business or has permanent place of business) – B2B rule

If supply is made to non-taxable person, place of supply is place of supplier – B2C rule

In case taxpayer’s place of permanent residence and inhabitance are not the same, place of supply is taxpayer’s inhabitance place. Certain special cases are prescribed for particular type of services.

Basic rule

B2B	B2C
Place of recipient (The place where the recipient of services has established its business)	Place of supplier (The place where the supplier of services has established its business)

Special cases

	B2B	B2C
Supplies of services by intermediaries	Place of recipient (basic rule)	Place of the underlying transaction
Property services	Place of property	Place of property
Cultural, artistic, scienti- fic, educational, sports, entertainment or similar services, like services in connection with fairs and exhibitions including services of the respective organizer; not applicable for admission and ser- vices relating thereto	Place of recipient (basic rule)	Where the services are physically carried out
Admission and other related services for events like fairs and exhibitions	Place of the event	Place of the event
Passenger transport	Distances covered in the territorry of Serbia	Distances covered in the territorry of Serbia
Transportation of goods (without intra-community goods transportation)	Place of recipient (basic rule)	Distances covered in the territorry of Serbia
Intra-community goods transportation	N/A	N/A
Ancillary transport services	Place of recipient (basic rule)	Distances covered in the territorry of Serbia
Appraisal and processing of movable tangible objects	Place of recipient (basic rule)	Place of service provider
Restaurant and catering services	Where the services are physically carried out	Where the services are physically carried out
Restaurant and catering services in connection with intra-community passenger transport	N/A	N/A
Renting of means of transport for up to 30 days	Where the means of transport is actually put at the disposal of the customer	Where the means of transport is actually put at the disposal of the customer
Renting of means of transport for over 30 days	Place of recipient (basic rule)	Place of recipient
“Listed services” to third country customers 1)	none	none
“Listed services” to customer in the EU	none	none
Electronically supplied services, radio and TV services	Place of recipient (basic rule)	Place of recipient

 

Mini-One-Stop-Shop (MOSS) / One-Stop-Shop (OSS)

N/A

Reverse charge (reversal of tax liability)

Applicable to all taxable supplies with place of supply in Serbia (certain exceptions to this general rule apply), supply made between two registered VAT payers in construction industry (in case that turnover performed by VAT payer exceeds RSD 500,000, approx. EUR 4,260 without VAT), secondary raw material supply, electricity and natural gas supply made to a distributor and in certain other cases.

Requirements

The supplier has no domicile or habitual abode in Serbia, nor a permanent establishment in Serbia involved in supply or has not appointed a VAT representative in Serbia

Consequences

The recipient owes the VAT. If general conditions for VAT deduction are met, VAT charged by recipient could be claimed back (no cash flow implications for the recipient)

Application also

Apply to construction services

Tax reliefs

Exemption (Input VAT deductible even though no VAT chargeable on supply of goods and services)

 

• export of goods and transportation and other services in direct relation to the export, transit or temporary import of goods;
• supply of goods in the customs warehousing;
• entering of goods in free zones, transportation and other services in relation to entering of goods into the free zone and supply of goods and services in the free zone;
• Supply of goods that are entered into the free zone, transport and other services directly related to such entry, and supply of goods in the free zone, made to a foreign entity who has concluded an agreement with the free zone user to incorporate those goods into the goods which will be dispatched abroad.
• supply, repair, maintenance, charter and lease of aircraft and river vessels predominantly oper- ating in international traffic, as well as shipment, repair, lease and maintenance of goods for these aircraft and river vessels;
• supply of goods and services for the direct needs of the above-mentioned aircrafts;
• international air and river transport of passengers, where the non-resident company is exempted under the condition of reciprocity;
• the supply of goods and services to diplomatic and consular missions, international organiza- tions, etc.;
• services performed on movables obtained by a foreign user of the service in Serbia or imported for the purpose of inward processing, repairing or incorporating and then exported;
• supplies of goods and services in relation to donation agreements concluded with the Re- public of Serbia that state that tax is not to be paid from donation funds;
• supplies of goods and services carried out in line with credit and/or loan agreements concluded between Serbia and an international financial organization or another state or agree- ments between a third party and international financial organization or other states, where Serbia is the guarantor or counter-guarantor if agreements state that tax will not be covered from the obtained funds;
• supplies of goods and services carried out in line with other international agreements if tax exemption is provided in the agreement;

Zero rates (non-genuine tax exemption) (Input VAT is not deductible)

• financial, banking and insurance services;
• supplies of land (agricultural, forest land, construction, developed or undeveloped) as well as renting of land;
• operations involving securities, shares, postal orders, administrative fees and stamps by their value in Serbia;
• second and every subsequent sale of buildings and sale of parts of buildings, unless both parties in the transaction agreed to apply VAT on such transfer;
• the lease of immovable property for residential purposes;
• public interest activities, such as:
• postal services and related supplies of goods,
• medical services,
• education and professional retraining,
• social, child and youth welfare services,
• cultural services rendered by not-for-profit organizations,
• scientific, sport and religious services,
• services of organizing games of chance,
• public broadcasting, except services of a commercial nature, etc.
• transfer of virtual currencies and exchange of virtual currencies for cash.

Deductible input VAT

• non-deductible expenses
• representatives costs
• acquisition, lease or rental and operation of passenger cars, yachts, aircraft, facilities for accommodation of these goods, spare parts, fuel and consumables for their needs, rental, maintenance, repairs and other services related to the use of these means of transport, as well as goods and services related to using facilities for the accommodation of those goods

Input VAT correction

Real estate

Rentals

Renting of immovable property is subject to 20 % VAT

Exception:

Renting for residential purposes is tax exempt

Sales

First transfer of buildings and economically separable units is subject to 20 % VAT

First transfer of residential buildings and economically separable units is subject to 10 % VAT

Second and every subsequent transfer of real estate can be either:

• subject to VAT, provided that both parties - VAT payers in the transaction agreed to apply VAT and that buyer is allowed to fully recover VAT charged on the transfer as input VAT; or
• subject to 2.5 % transfer tax (unless VAT does not apply)

Input VAT refund for Serbian taxable persons within the EU

Based on reciprocity

Foreign taxable persons

Taxable persons without domicile or permanent establishment in Serbia

Registration

Available for foreign entities via VAT representative in Serbia and also for Serbian companies and individuals under certain conditions

Refund of input VAT for taxable persons domiciled in the EU

A foreign entity carrying out no supplies in Serbia (except in case of transportation services and in case the recipient of goods/services-VAT taxpayer has the obligation to calculate VAT liability) is allowed to have VAT refund under certain conditions

Refund of input VAT for taxable persons not domiciled in the EU

A foreign entity carrying out no supplies in Serbia (except in case of transportation services and in case the recipient of goods/services-VAT taxpayer has the obligation to calculate VAT liability) is allowed to have VAT refund under certain conditions.

E-invoicing

Subjects in the private sector are obligated to record VAT calculations through the Electronic Invoicing System (SEF) as of January 1, 2023. It is defined that the obligation to issue e-invoices applies to:
-entities in the private sector are subject to mutual transaction obligations;
-private sector entities engaging in transactions with public sector entities, including all payment requests towards the public sector entity;
-public sector entities engaging in transactions with private sector entities;
-public sector entities involved in mutual transactions, including all payment requests;
-tax representative of a foreign entity in the Republic of Serbia, as defined by regulations governing value-added tax, based on transactions with entities from both the private and public sectors.

The deadline for electronic reporting of output VAT is within 12 calendar days after the end of the tax period. Corrections to electronic reporting of output VAT are permitted.

The deadline for electronic reporting of input VAT is also within 12 calendar days after the end of the relevant period. Reporting is based on the balance as of the day before the reporting date, except when reporting occurs after the 10th day of the calendar month, in which case the balance as of the 10th day of that month will be used. Corrections to input VAT reporting are also allowed.