Changes to the collection of VAT as of January 2020

The collection of VAT is of the utmost importance for Serbia because it constitutes more than half of the budget revenue. Therefore, any changes to the rules regarding this type of tax are carefully prepared and implemented.

The Law on Amendments to the VAT Act entered into force on 15h October, while the provisions on new tax exemptions are already in place. The second part of the amendments will be applicable as of 1st January, 2020.

A very significant change concerns the place of sale of goods and services when food and drink are sold for consumption onboard, on an aeroplane or other carriers, or on a train. The place of sale will be considered to be the place from which, for example, an aircraft departed. This means that if the plane departs from Serbia, all proceeds from taxes on food or beverages sold on board will end up in the Serbian state budget.

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Another very important change concerns repairs during the warranty period. After the changes, the tax exemption will also apply to the repair of the appliance within the warranty period, not only to its replacement as is now the case.

Consumers who are not domiciled or do not have a permanent residence permit in Serbia are entitled to a VAT refund on goods purchased in the country. The value which is eligible for a refund is now 50%lower, and instead of 12,000 dinars or 100 euros, it is now 6,000 dinars or 50 euros (VAT included).

The time limit within which the VAT refund can be obtained has also been changed, because until now, this right could have been exercised within six months, while now the time limit has been extended to 12 months.

The legal provisions specify the definition of a debtor more precisely. The law stipulates that the recipient, not the service provider, is obliged to calculate VAT on the receipt he receives. However, this is only applicable if both parties are VAT payers.

Experts believe that these changes will have a positive impact on the economy and image of Serbia’s tax system.

(RTV, 22.11.2019)


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