Obligation of electronic invoicing and electronic recording of VAT in Serbia

The new Law on electronic invoicing began to be implemented on May 1, 2022.

The law regulates the issuing, sending, receiving, processing, storage, content and elements of electronic invoices, in transactions between:

• public sector entities,
• private sector entities,
• public and private sector entities.

Issuance of an electronic invoice

The obligation to issue an electronic invoice have:

1. entities of the private sector on the basis of mutual transactions;
2. a private sector entity based on a transaction with a public sector entity;
3. a public sector entity based on a transaction with a private sector entity;
4. public sector entities based on mutual transactions;
5. tax representative of a foreign person in the Republic of Serbia, in terms of the regulations regulating value added tax, based on transactions with private and public sector entities.

Electronic registration of VAT

In addition to the obligation to issue i.e. send, receive and store electronic invoices through the Electronic Invoice System (SEF), the Law also states the obligation to record VAT electronically.

The tax debtor has this obligation in accordance with the VAT Law:

• A VAT payer, as well as
• A person who is not a VAT payer – a public sector entity and a voluntary user of SEF.

For private sector entities and voluntary users of the SEF, this obligation began to apply from January 1, 2023.

Electronic registration of VAT does not refer to the registration of previous tax, but only the tax liability of the taxpayer.

The obligation to record VAT electronically does not exist if there is no obligation to calculate VAT in accordance with the Law on VAT, regardless of the basis on which, in accordance with the Law on VAT, the calculation of VAT is not carried out.

Among other things, the VAT payer does not have the obligation to register VAT electronically for the sale of goods and services he has performed, including the advance payment received for that sale, for which he is considered a tax debtor and for which he issues an electronic invoice in accordance with the Law. The reason for this exemption is the fact that when issuing an electronic invoice, the VAT payer will calculate VAT for the transaction for which he issues an electronic invoice (if he is obliged to calculate VAT). It goes without saying that this is an electronic invoice that shows the calculated VAT.

VAT taxpayers who have the obligation to issue fiscal receipt do not have the obligation to record VAT electronically, given that they performed the calculation and declared VAT in the issued fiscal receipts as a tax debtor.

There is no obligation to register VAT electronically:

• if there is no obligation to calculate VAT in accordance with the VAT Law;
• if an electronic invoice is issued for the transaction, including the advance received for that transaction;
• if there is an obligation to issue fiscal receipts for transactions.

Collective and individual records

Electronic registration of VAT is done through:

• collective records and
• individual records.

Collective records are done for all obligations, by showing data about basis for calculating VAT and calculated VAT, separated by tax rate (10% or 20%).

As an exception to the stated rule, records are made individually, for each obligation, by showing data about basis for calculating VAT and calculated VAT for:

1. turnover of goods and services, including an advance payment, for which the recipient of goods and services is a tax debtor in accordance with the VAT Law – in other words, when it comes to turnover for which taxpayer or entity who is not a tax payer (subject public sector and voluntary user SEF) are tax debtor in accordance with Article 10 of the VAT Law, in the capacity of recipient of goods or services. Individual entry means that the data is entered for each transaction separately, regardless of whether it is a transaction that is performed with or without compensation (and for which there is an obligation to calculate and pay VAT on the part of the recipient as a tax debtor );
2. turnover of goods and services, which is carried out with compensation to the tax payer on income from self-employment in the sense of the law regulating the personal income tax and to the payer of the tax on the profit of legal entities in the sense of the law regulating the tax on the profit of legal entities, including advance payment received, for which the supplier of goods, i.e. the service provider is a tax debtor in accordance with the VAT Law – in this case, the necessary conditions that must be met in order for there to be an obligation to create individual records are:
   • The turnover is carried out by the VAT payer to subjects who are not SEF users (including advance payments received from these subjects), whereby the coverage of these subjects is “limited” to subjects liable for income tax from self-employment and profit tax. In these cases, the VAT payer does not issue an electronic invoice (because it does not perform transactions with SEF users). If it is a transaction made to subjects who are not users of SEF, where they are not liable for income tax from self-employment and profit tax, data on taxable transaction (that is, advance payment received) and calculated VAT are entered in the collective records.
   • Turnover is carried out for a compensation. If there is an obligation to calculate VAT on sales made to these subjects without compensation, the data on this sales are entered in the collective records;
   • Turnover performed by a VAT payer (including advance payment received) for which an exemption from the issuance of an electronic invoice is prescribed in accordance with Article 3, paragraph 2 of the Law on Electronic Invoicing, and for which he is considered a tax debtor.