The Law on Fiscalization
Under amendments fiscal obligors are provided with the transition period for harmonization of their operations with the new Law on Fiscalization. Transition period for commercial entities to start with application of Law on Fiscalisation will start on 1 November 2021 and it will end on 30 April 2022.
Additionally, amendments stipulate that fiscal obligor who sell goods or provide services in more business premises, who starts to use new electronic fiscal devices prescribed under Law on Fiscalization during transition period in one business premise, may continue to record turnover in other premises in line with the “old” Law on Fiscal Cash Registers until 1 May 2022. Also, it has been clarified that only Serbian legal entities may be suppliers of new fiscal devices.
As a reminder, new Law on Fiscalization now prescribes those fiscal obligors are all legal entities and entrepreneurs who sell goods and provide services to natural persons, with few exceptions, such as public postal services, public utility, telecommunication, public transportation, etc. The fiscalization process encompasses two steps – obtainment of new, online fiscal devices and making appropriate registrations with the Tax Administration. Fiscal receipts will need to be issued after each sale of goods or services to natural persons through fiscal device in paper form (with exception of internet traders who will issue digitalized versions). Customers will be able to scan QR code to check its validity. The Tax Administration will have the right to control fiscal affairs of taxpayers and do so for the period of 10 years as of issuance of the fiscal receipts.
Law on Tax Procedure and Tax Administration
Amendments mainly bring changes in the process for deferral of tax payment prescribing that taxpayer may ask for deferral of payment of the interest for late payment of tax even if previous decision on deferral of payment of that tax liability was annulled. Also, taxpayers whose tax payments are deferred under decision of the Tax Administration will be able to replace the collateral pledged as security in the process of approval of deferral of tax payment.
Besides that, amendments prescribe that Tax Administration will ex-officio file a tax return and calculate mandatory social contributions for shareholders of Serbian companies in case the company failed to do so.
Transfer Pricing Rulebook
The Ministry of Finance amended the Rulebook on transfer pricing and methods which are used, in accordance with the “arm’s length” principle, for determination of prices of the transactions between related parties (“Transfer Pricing Rulebook”) which entered into force on October 9, 2021.
Amendments to the Rulebook on Transfer pricing relate exclusively to the content and manner of submission of the annual report on controlled transactions of the international group of related legal entities (CbC Report). The CbC Report is submitted only by Serbian tax resident that is the ultimate parent entity of the international group of related entities.
The CbC Report should contain the following:
- consolidated information on income, profit or loss before tax, calculated and paid corporate income tax, capital, accumulated earnings, number of employees and tangible assets for each tax jurisdiction in which the international group operates;
- identification of each member of the international group, including the country in which such member is a tax resident and country of establishment (if different), as well as information on predominant activity or activities of a member of an international group.
As a reminder, starting from 2020, each taxpayer is obliged to disclose in the transfer pricing documentation within the analysis of a group of related parties whether it is a member of an international group and whether it is considered the ultimate parent entity.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.