The National Assembly of the Republic of Serbia adopted a set of proposed laws amending and supplementing tax laws and laws in the field of electronic invoicing and fiscalization, which will enter into force within eight days from the date of publication in "Official Gazette no. (138/2022)"

The aforementioned set of proposed laws includes amendments to laws in the area of tax procedure and tax administration (ZPPPA), personal income tax, value added tax, property tax, contributions for mandatory social insurance, as well as the law on fiscalization and the law on electronic invoicing.

The changes apply mainly from January 1, 2023.

Amendments to the ZPPPA refer to the following:

The provisions of the ZPPPA, which govern the tax control of recording turnover from the sale of goods and the provision of services through electronic fiscal devices, are specified.

In accordance with the adopted amendments to the Personal Income Tax Law (PIT Law) in the part that refers to the determination and submission of tax returns for the annual personal income tax, amendments were adopted which make it significantly easier for taxpayers to fill out and submit a tax return - exclusively electronically. Also, it is translated into a system of self-taxation, instead of the previous taxation by the decision of the Tax Administration.

Two new tax crimes were adopted: one, which prescribes criminal liability for persons who, contrary to the regulations, carry out the illegal circulation of fiscalization equipment, and the second, which prescribes criminal liability for the illegal circulation of accounting and other software, which can be used to avoid recording of turnover, ie tax avoidance;

The appointment of an ex officio defense counsel for a suspect who did not choose or provide a defense counsel during the hearing, in the pre-investigation procedure conducted by the Tax Police, due to the existence of grounds for having committed a tax crime for which a prison sentence of eight years or a heavier penalty is prescribed, is regulated.

The tax inspector imposes a ban on the taxpayer, i.e. if the following irregularities are found in the tax control procedure:

  1. that the activity is performed in such a way that the goods and services are not accompanied by reliable documentation of importance for tax determination (shipping note, invoice, customer's statement, etc.);
  2. to avoid the determination and payment of taxes by not paying the daily market in accordance with the regulations;
  3. to avoid the determination and payment of tax on the employment of persons who do not have a concluded employment contract or other act on employment, adopted in accordance with the regulations on labor relations, as well as if these persons are not, in accordance with the regulations, reported to the competent organization of mandatory social insurance;
  4. not to register turnover from the sale of goods or the provision of services through a fiscal cash register, an electronic fiscal device or in another prescribed manner.

Now a fixed duration of the ban on the activity is prescribed (from 15 and 90 days, as well as one year), instead of the previously valid duration of the ban on the activity in a certain range (up to 15 and up to 90 days and up to one year).

Amendments to the Personal Income Tax Law and Contributions for mandatory insurance Law

The non-taxable amount of salary was increased from RSD 19,300 dinars to RSD 21,712.

The new non-taxable amount of earnings applies from January 1, 2023.

The contribution rate for mandatory pension and disability insurance is reduced from 25% to 24%.

 The contribution rate for mandatory pension and disability insurance at the expense of the employee does not decrease (remains at 14%), while the rate at the expense of the employer decreases from 11% to 10%.

The rates at which contributions are calculated and paid are:

  1. for mandatory pension and disability insurance - 24%;
  2. for mandatory health insurance – 10.3%;
  3. for unemployment insurance - 0.75%.

The validity of benefits for new employees is extended. 

The deadline for exercising the right to a refund of part of the paid income tax for a newly employed person is being extended until December 31, 2023.

By amending the provisions of the PIT Law, the annual personal income tax will be determined by self-taxation, instead of by a decision of the tax authority, and the tax return will be submitted exclusively in electronic form.

The procedure for submitting a tax return consists of the following steps:

  1. No later than April 1 of the year following the year for which the annual tax is determined (e.g. by April 1, 2023 for the annual tax for 2022), the tax authority fills out the tax return and uploads it electronically to the Tax Administration portal, which makes it available to a individual – a taxpayer of the annual personal income tax;
  2. The individual has the obligation to amend / supplement the tax return in the part in which the correct data is not shown or the data is not available to the tax authority (eg data on dependent family members and the amount of personal deductions for dependent family members);
  3. A individual submits a tax return in electronic form, through the portal of the Tax Administration, no later than May 15 of the year following the year for which the annual tax is determined and pays the determined amount of tax;
  4. This step exists only if a individual does not submit a tax return within the prescribed period - then the tax authority submits a tax return for that person;

A new way of taxing freelancers' income is prescribed, so that the tax liability for the income from the agreed fee from copyright and related rights and the agreed fee for the work performed will be determined by self-taxation, with the submission of a tax return within 30 days from the end of the quarter in which those revenues were generated.

The first option of taxation of freelancers' income implies that for income from copyright and related rights and contracted fees for work performed, on which tax is paid through self-taxation:

  • the tax base is made up of the gross income realized in the quarter less the normalized costs in the amount of 96,000 dinars;
  • pays tax at the rate of 20%.

It is more favorable for individuals who generate lower incomes on a (ir)regular basis.

Another option for taxation of freelancers' income implies that for income from copyright and related rights and contracted fees for work performed, on which tax is paid through self-taxation:

  • the tax base consists of the gross income realized in the quarter less the sum of the absolute amount of normalized costs of 57,900 dinars and the relative amount of normalized costs of 34% of the gross income realized in the quarter;
  • tax is paid at the rate of 10%.

This taxation option is more favorable for freelancers who generate higher incomes on a regular basis.

Amendments to the Value Added Tax Law

It is prescribed that a foreign person who, in the Republic of Serbia, trades in goods that are in the procedure of customs storage, in accordance with customs regulations, is not obliged to appoint a tax representative and register for the obligation to pay VAT.

In the case of electricity transactions to which the rules of the relevant European associations of transmission system operators are applied in accordance with the law regulating energy, the electricity transaction occurs on the day the invoice is issued.
It is prescribed that the traffic of electricity, the delivery of which is carried out via the transmission network to the person who purchased the electricity for resale, to which (transaction) the rules of the relevant European associations of transmission system operators are applied in accordance with the law regulating energy.

When it comes to the time of turnover of services related to the turnover of electricity, the provision according to which the service of downloading electricity into the energy system, to which the rules of the relevant European associations of transmission system operators are applied, is considered to be provided on the day the invoice is issued.

Market value is considered to be the total amount that the buyer of goods, that is, the recipient of services would pay at the time of the sale of goods, that is, services to an independent supplier, for sale in the Republic.

If the market value cannot be determined for specific goods, i.e. services, the market value is determined for similar goods or services, and if the market value cannot be determined for similar goods, i.e. services, the market value is considered to be:

  1. for the sale of goods, an amount that is not lower than the purchase price of those or similar goods, and if that price is unknown, the total amount of the determined costs at the time of delivery;
  2. for the turnover of services, an amount that is not lower than the total amount of the determined costs of providing the service, borne by the taxpayer.

According to the new provisions of the VAT Law, the basis for the sale of goods or services in exchange for a multi-purpose value voucher is the fee paid for the multi-purpose value voucher, and if there is no information about that fee, the basis is the monetary value stated on the multi-purpose value voucher itself or in the related documentation, without VAT, which refers to delivered goods, i.e. provided services.

In the case of transactions of goods, i.e. services between persons who are considered to be related persons in the sense of this law, with a fee that is lower than the market value, where the acquirer does not have the right to deduct the previous tax in full, the basis is considered the market value of those goods, ie services, excluding VAT.

Application of the new rule implies that the following conditions are simultaneously met:

  1. the supply of goods or services is carried out between related parties in the sense of the VAT Law, regardless of who is the tax debtor for that supply,
  2. turnover is carried out with a fee that is lower than the market value,
  3. based on the specific turnover, the acquirer is not entitled to deduct the previous tax in full. If one of the conditions is not met, the tax base is determined in accordance with the general rules, which means on the basis of the agreed fee, regardless of whether it is lower than the market value or higher than it (except in the case of exchange or entry of a non-monetary deposit - then is certainly the relevant market value).

Related persons in the sense of this law are considered to be related persons in accordance with the law governing corporate income tax, persons with whom there are family or other personal ties, management, ownership, membership, financial or legal ties, including the relationship between employer and employee. , that is, members of the employee's family household.

It is specify that the taxpayer is obliged to notify the tax authority in electronic form of changes to data from the registration application that are important for the calculation and payment of VAT, no later than within five days from the date of the change.

Amendments to the Law on Property Tax

It is postpone the transfer of competence for the determination, collection and control of inheritance and gift tax and tax on the transfer of absolute rights from the Tax Administration to Local Self-Government Units - until January 1, 2024. This means that even in 2023, inheritance and gift tax will be determined by the Tax Administration. 

The subject of taxation extends to the transfer with compensation of the right to permanently use a parking space in an open residential block and residential complex. This implies:

  • parking space located on the territory of the Republic of Serbia;
  • that the specific transfer is not exempt from taxation in accordance with Article 24a of the Law (eg, when the value added tax is paid on that transfer, the tax on the transfer of absolute rights is not paid); 
  • to be carried out starting from January 1, 2023. On this basis, the tax will be determined by the decision of the tax authority.

It is regulated that for the transfer of the right to permanent use of a parking space in an open residential block and residential complex, which is carried out as a legal transaction, the taxpayer is the transferor of the right.

The date of the tax liability is changed when the right to real estate is transferred as a future liability, so that the tax liability arises earlier than the following days:

  1. on the date of registration of the acquired right in t hecorresponding cadastre, or 
  2. handing over, that is, taking possession of real estate.

It is regulated that in the case of the transfer of the right to permanent use of a parking space in an open residential block and residential complex, which is carried out by contract, the tax liability arises on the date of conclusion of the contract.

Amendments to the Law on Electronic Invoicing

It is specified that the provisions of this law do not apply to individuals who are not liable for income tax from self-employment in the sense of the law governing personal income tax.

It is specified that a public sector entity is an entity belonging to the state sector, in the sense of the law governing the budget system, as well as a public enterprise, in the sense of the law governing the legal position of public enterprises, regardless of whether it is included States.

It is specified that the provisions of the Law that apply to the public sector entity also apply to the National Bank of Serbia.

It stipulates that the taxpayer on income from self-employment in the sense of the law governing the personal income tax and the taxpayer on the profit of legal entities in the sense of the law governing the tax on the profit of legal entities, except for public entities and the private sector, applies for the use of SEF before submitting a request for payment to a public sector entity.

The obligation to issue an electronic invoice has:

  1. private sector entities based on mutual transactions;
  2. a private sector entity based on a transaction with a public sector entity, including all requests for payment to 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, including all requests for payment;
  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.

It is prescribed that starting from January 1, 2023, the obligation to issue an electronic invoice does not exist for:

  1. retail sales and received advances for retail sales in accordance with the law governing fiscalization;
  2. contractual obligation directed towards users of funds from international framework agreements;
  3. procurement, modernization and overhaul of weapons and military equipment, procurement of security-sensitive equipment, as well as related procurement of goods and services, including the request for payment based on a contract that has defense or security aspects, exempt from the application of the law regulating public procurement; 30 Amendments to the Law on Electronic Invoicing - in effect mainly from January 1, 2023.
  4. delivery of electricity and the service of downloading electricity into the energy system, except for the delivery of electricity for final consumption;
  5.  turnover of goods and services free of charge;
  6. a transaction on the basis of which compensation representing public revenue is paid in accordance with the law governing the budget system;
  7. a request for the payment of costs and awards in court and other proceedings, which are paid from the funds of the court, or other authority where the proceedings are conducted, based on the decision of the court, or other authority.

It is stipulated that as of January 1, 2023, an electronic invoice that has been rejected can be subsequently accepted, provided that it is not an electronic invoice that is recorded in the CRF in accordance with the Law on Settlement Deadlines.

An electronic invoice is considered delivered at the time of issue in accordance with this law.

Amendments to the Law on Fiscalization

It is stipulate that retail sales are not considered to be sales made outside a retail establishment if the user of the delivered goods and services, i.e. the goods and services that will be delivered or provided in the case of received advances, is a legal entity, i.e. a self-employed income tax payer. activities in the sense of the law governing the personal income tax.

It is prescribed that the data on the value of turnover according to tax rates will not be considered a mandatory element of the fiscal account. Obtaining additional data on the fiscal account will be possible by scanning the QR code or via a hyperlink for verification. 

As a significant novelty, the extension of the exception to the rule related to the mandatory use of at least one electronic fiscal device that uses its own processor of fiscal accounts in the retail establishment is prescribed.

Prohibition of carrying out activities to the taxpayer who has been found to be irregular during the supervision is imposed:

  1. for a period of 15 days, if an irregularity is established for the first time in the supervision procedure of the person subject to fiscalization;
  2. for a period of 90 days if an irregularity is determined for the second time in the supervision procedure of the person subject to fiscalization;
  3. for a period of one year, if an irregularity is established for the third time in the supervision procedure of the taxpayer.

It is prescribed that a ban on the performance of activities of a person subject to fiscalization who performs activities in the area of holding manifestations (fairs, festivals, exhibitions and other manifestations as part of cultural, musical, sports and other social activities) is imposed for the duration of that manifestation.