VAT Rulebook changes to compliance rules
The Ministry of Finance has updated the VAT Rulebook, with a range of updates to VAT calculations, invoicing, records and filings. The updates came into effect on 1 September 2024. The Rulebook is a consolidation of previous VAT guidelines, and is in force to supplement the Law on Value Added Tax.
The aim of the reforms are to align the country’s VAT regime with that of the EU and to the latest Serbian e-invoicing requirements.
Invoices and Tax Exemption
In cases where an invoice is required for tax exemption or input VAT deduction, the requirement is satisfied if the invoice is issued by the 10th day of the month following the tax period in which the supply occurred.
Advance Payment Adjustments
When the base of an advance payment decreases, the recipient must adjust and reduce their input tax deduction accordingly. A prior provision that allowed VAT payers to avoid issuing an invoice when receiving advance payment, replaced by an invoice for the final supply of goods and services, has been abolished, aligning this with electronic invoicing regulations.
Credit and Debit Notes
Additional requirements have been introduced for credit and debit notes, including the obligation to specify the date of any increase in contribution or base if it does not coincide with the issuance of the note. This change is part of broader regulations aimed at streamlining documentation and ensuring VAT compliance.
Tax Base Adjustments
The amendments provide new rules for adjusting the tax base. A recipient of goods and services, who is the tax debtor, can now decrease their calculated VAT on taxable supplies by issuing an internal invoice and correcting input tax deductions. Previously, possession of a document justifying the tax base reduction was mandatory, but this requirement is now removed unless the recipient cannot deduct input tax. If the recipient cannot deduct the input tax, the document and internal invoice are still necessary.
The regulation clarifies that if an advance payment is no longer treated as such, it will not be treated as a reduction in the tax base when converted to a contribution toward the supply.
Changes Regarding Tax Debtors and Advance Payments
The amendments eliminate the need for VAT payers to cancel advance invoices when their status changes as the tax debtor. However, the calculated VAT can still be corrected if the recipient corrects their input tax deduction and does not use the VAT from the advance invoice.
Serban e-Invoicing
Specific rules are introduced for the issuance of separate invoices for buildings, economically divisible units, and ownership shares. These provisions are aligned with Serbia’s e-invoicing regulations.
Consolidated Invoicing
VAT payers may issue one invoice for multiple supplies to the same person on the same day, provided the tax liability arises on that day. Similarly, for multiple supplies over a tax period, a single invoice can be issued within eight calendar days after the period ends.
Internal Invoices for VAT Debtors
There are two new categories of internal invoices: one for foreign persons and another for VAT payers. These internal invoices are required for adjustments related to goods and services, advance payments, and decreases in advance payments. The amendments also introduce additional mandatory elements for internal invoices, including the linking number, reduction date, and detailed description.
VAT Recording
Several updates were made to VAT records, including the requirement to present interest on demand deposits. General VAT records must now track deductible and non-deductible VAT amounts, including any corrections. Additionally, specific data must be recorded for equipment and facility investments. Special records are also introduced for canceled documents, such as sales invoices or documents concerning adjustments in contributions or advance payments.
VAT Return (POPDV Form) Updates
Changes have been introduced to the POPDV form, which is used for VAT reporting. Notably, reductions in the tax base due to invoice cancellations are no longer recorded in field 3.6. Special rules are established for reporting changes in the tax base and VAT contributions, depending on which document is canceled. Additionally, VAT calculated for supplies is now adjusted by the amount of VAT based on collected advance payments, even when tax liability arises in different tax periods.
