VAT refund in Serbia to foreign tax payer

Pursuant to Article 53 of the Law on VAT, it is possible to refund the VAT to a foreign taxpayer, under conditions:

1. VAT for the sale of goods and services is stated in the invoice, in accordance with this Law, and invoice is paid;
2. the amount of VAT for which a request for VAT refund is submitted is higher than EUR 200 in EUR equivalent at the middle exchange rate of the National Bank of Serbia;
3. the conditions under which the VAT payer could claim the right to deduct prior tax for these goods and services in accordance with this Law are fulfilled;
4. does not trade goods and services in the Republic, except for:
   1. the carriage of goods in accordance with Article 24, paragraph 1, item. 1), 5) and 8) of this tax-exempt law;
   2. a passenger transport service which, in accordance with Article 49, paragraph 7 of this Law, is subject to individual transport taxation;
   3. goods and services for which the VAT taxpayer is the recipient of the goods or services.

The invoice for the supply of goods and services must contain all the information referred to in Article 42, paragraph 4 of the Law on VAT, with the exception of the TIN (tax indentification number) of the recipient of the invoice, which is defined in Articles 13 and 14 of the Rule book on determining cases where there is no obligation to issue invoices and invoices with of which certain data may be omitted (“Official Gazette of RS”, Nos. 123 / 12,86 / 15 and 52/18).

The VAT refund may be required if the right to deduct tax would exist in case a foreign taxpayer is registered in the VAT system in Serbia. In this regard, a foreign taxpayer can not claim a VAT refund for goods and services defined in Articles 25 and 29 of the VAT Law (for example – passenger car, representation).

Foreign taxpayers are allowed to refund VAT even when they are selling goods and provide services in the territory of the Republic for which the recipient of goods and/or services (B2B) has an obligation to calculate VAT (reverse charge system).

Namely, according to the Law on VAT, Article 10a, paragraph 1, defined that a foreign taxpayer must be registered in the VAT system (through a tax proxy) if it trades goods and services which place of turnover is consider in Serbia according to the Law.

However, the same article, paragraph 2 defines that a foreigner is not obliged to register itself into the VAT system, if it sells all goods and services exclusively to VAT taxpayers, or subjects referred to in Article 9 paragraph 1 of this Law, as well as the transport of passenger transport services by bus for which as the basis for calculating VAT, it determines the average transport charge for each individual transport.

Representative office of foreign legal entities in Serbia can also obtain VAT refunds for the procurement of goods and services when these goods and services serve them in the conduct of the business of representative offices in Serbia.

The VAT refund is made on condition of reciprocity. The list of countries with which VAT reciprocity conditions are in place can be found at the following link.

The VAT refund can be made once a year, and no later than 30 June of the current year, for goods and services procured in the Republic of Serbia (hereinafter: the Republic) in the previous calendar year.

AKTIVA sistem advises clients regarding the analysis and selection of possibilities in the field of VAT and perform VAT refund. Feel free to contact us.