The National Assembly of the Republic of Serbia recently adopted the Law on Electronic Invoicing (the „Law“). The Law brings significant changes to the economy, as it prescribes the gradual mandatory issuance of electronic invoices. The main reasons for the new law, as stated by the lawmakers, are to achieve transparency and legal certainty in electronic invoicing, facilitate tax controls and enable automatic VAT refunds.
According to the Law, the following entities will have the obligation to issue electronic invoices:
- Private sector entities which are VAT payers;
- Public sector entities; and
- VAT representatives of foreign entities.
Other entities will not be obliged to issue electronic invoices, but they will be able to voluntary apply for their use if they are corporate income taxpayers or pay tax on income tax from self-employment.
Exceptionally, the obligation to issue an electronic invoice will not apply to retail trade and the received advance for retail trade, for the contractual obligation directed towards the users of funds from international framework agreements, as well as for procurement, modernisation and overhaul of weapons and military equipment, safety sensitive equipment and related goods and services.
Issuance, sending, receiving and storage of electronic invoices will be done through the electronic invoices IT system which will be managed by the competent unit within the Ministry of Finance. Both private and public entities as well as voluntary users will be able to engage a legal entity that has received a permit from the competent authority – a so-called “Information intermediary” – for the services of issuing, processing the receipt and storage of electronic invoices.
In addition to the obligation to issue electronic invoices, the Law also introduces a special obligation to electronically record the calculation of value added tax. This obligation will apply to public sector entities and private sector entities which are VAT payers, except for tax debtor for the import of goods and VAT payers for the trade of goods and services, including the advance received for that trade, for which the electronic invoice will be issued.
Obligation to electronically record the calculation of value added tax applies to retail trade and received advance for retail trade, performed by the VAT payer, only if in line with the law governing fiscalization. There is no obligation to issue a fiscal invoice for that trade.
The Law also prescribes the basic elements of electronic invoices, the procedure of their issuing, receiving, and storing. Non-compliance with the obligation to issue an electronic invoice and with some other obligations under the Law will be considered a misdemeanour, for which the public or private sector entities will be fined in the amount between RSD 200,000 (approx. EUR 1,700) and RSD 2,000,000 (approx. EUR 17,000).
Private sector entities will have the obligation to issue electronic invoices to public sector entities as of 1 January 2022.
Private sector entities will have the obligation to receive and keep electronic invoices issued by public and private sector entities as of 1 July 2022.
Obligations to issue and keep electronic invoices in transactions between private sector entities, as well as the obligation to electronically record the calculation of VAT (except in transactions in which one party is a public sector entity), will apply from 1 January 2023.