Regulatory updates - Serbia

The Law will enter into force on 15 December 2024, with the majority of obligations applicable from 1 January 2025. However, certain rules have different timelines, i.e.:

• 15 December 2024: requirements regarding the determination of the subject’s status will apply (Art 3 & Art 12);
• After 31 December 2024: provisions on the electronic recording of VAT and electronic recording of advance tax applicable to respective VAT tax periods will apply (Art 4 & Art 5);
• After 31 December 2025: changes referring to the e-invoice content applicable to the respective VAT tax periods will apply (Art 7).

Furthermore, below are the main implications of the amended law.

Determining the subject’s status

• Every entity that is a subject of the electronic invoicing system (SEF) must provide data on its status in SEF within five days from the date of registration in the list of SEF users;
• The information that must be disclosed is whether the entity is liable for VAT and whether the tax period is a calendar month or quarter.

Electronic recording of VAT and electronic recording of advance tax

• The electronic recording of VAT includes increase and decrease in individual and collective VAT recording;
• There are certain exceptions to the individual VAT recording, e.g., for travel agencies;
• The deadline to electronically record VAT and electronically record advance tax has changed from day 10 to day 12 of the calendar month following the tax period for which the VAT is recorded;
• Both the electronic recording of VAT and the electronic recording of advance tax can be corrected.

Preliminary tax return

The preliminary tax declaration will be provided in SEF based on the data available in the system.

Cross-border traffic

The user of SEF can check import data by accessing the list of customs declarations for import.

Penalties

Fines between 200 thousand to 2 million Serbian Dinar (ca. 1700 - 1.7 million EUR) will apply for:

• Breaching the obligation to disclose the subject’s status;
• Not recording the VAT electronically in line with Art 4 and Art 4a;
• Not using the SEF system based on Art 5(1).

If an error is made in correcting the electronic recording of VAT and advance tax, no offense will be committed if the correction was made before the supervision process (Art 16) has started.

This draft law regulates the sending, receiving, processing, acceptance, rejection and presentation of electronic goods delivery notes between public and private sector entities for B2B and B2G transactions. 

The following are the key points about the draft law. 

Implementation timeline 

• The expected adoption of the law would be in Q2 2025; 

• The law would enter into force on 1 January 2026; 

• Specific obligations for private sector entities and transporters to start 1 October 2027. 

Scope and applicability 

• Applies to both public and private sector entities; 

• Excludes private individuals not subject to self-employment income tax; 

• Exceptions include movements through networks (e.g., water, electricity), retail supply, international agreements, military goods, and internal relocations within the same public sector entity. 

Obligations 

• Entities must send electronic goods delivery notes for each movement of goods before the movement of goods; 

• Carriers are required to present these notes during inspections. 

Upcoming by-law 

Upcoming by-laws will regulate the method and procedure for sending, receiving and presenting electronic goods delivery notes in detail within 90 days of this law’s entry into force. 

Penalties 

Fines range from RSD 50 000 (ca. EUR 430) to RSD 2 million (ca. EUR 17 100), depending on which obligation has been violated. 

Public consultation 

The draft law was open for public consultation, allowing stakeholders to provide feedback and suggestions before finalizing it on 30 September 2024. 

The Law on Amendments and Supplements to the Law on Electronic Invoicing 116/23 was adopted by the National Assembly of the Republic of Serbia. One notable amendment is the mandatory electronic recording of input Value Added Tax (VAT), encompassing VAT calculated in prior supply phases or paid during goods importation.

This rulebook came into effect on 1 January 2024 and provides a more detailed and comprehensive regulation of specific matters, specifically addressing solutions outlined in the Law on Electronic Invoicing.

Several critical areas have been encompassed, and these include:

• Procedure for utilizing and accessing the electronic invoicing system;
• Contents of the list of electronic invoice system users, conditions for removal from the list, and the process of deletion;
• Application of electronic invoicing standards;
• Method and procedure for electronic recording of value-added tax calculation;
• Protocols for handling temporary interruptions in the electronic invoicing system's operation;
• Utilization of data from the electronic invoicing system;
• Registration process and access to the electronic invoicing system;
• Operations of the Central Information Intermediary.
• Minimum content requirements for electronic invoices, including situations where certain elements can be omitted or additional elements are required based on other regulations governing specific types of invoices.

In contrast to the remaining articles of the Rulebook, the stipulations outlined in Article 6, which concern the data within the list of users in the electronic invoice system, are scheduled to take effect on 1 March 2024.

Starting from 1 January 2024, the following changes to the VAT law will be implemented, except for the rules regarding the electronic recording of input VAT, which will take effect for tax periods beginning after 31 August 2024:

• Taxpayers will have to electronically record the VAT calculated in the previous supply phase (i.e., VAT paid when importing goods). This will become mandatory regardless of whether taxpayers can claim the right to deduct the recorded input VAT;
• The deadline for the electronic recording of VAT (including input VAT) has been shortened to 10 days after the end of the tax period instead of 15 days;
• If a change occurs after the 10-day period affecting the electronic recording of VAT, the taxpayer must amend the recording within the deadline for the VAT return submission for the tax period in which the change occurred.

The amendment is available here (in Serbian).

Since the beginning of this year, the e-invoicing system has been going through a number of updates.

Previous upgrades

The upgrades started with the adoption of version 3.1 from 28 January 2023 and continued with version 3.1.5 from 3 February 2023, version 3.1.6 from 10 February 2023, version 3.2 from 2 March 2023, version 3.2.1 from 13 March 2023, version 3.2.2 from 14 March 2023, and version 3.2.3 from 24 March 2023.

The changes related to the recording of VAT were introduced on 7 April 2023. Furthermore, the Internal Technical Manual for e-invoice exchange through the system within the Republic of Serbia was updated on 31 March 2023.

What are the main amendments about?

The upgraded versions and updates mainly concern a technical improvement of the system. Here are some of the most important provisions, including but not limited to:

• Improvement of the mechanism for generating and sending daily e-mail notifications due to perceived problems with this functionality;
• Optimization of queries to the database based on the assessment of the database administrator;
• Optimization of application to improve system performance;
• New currencies were added to the system (VEF, XAG, XAU, XBA, XBB, XBC, XBD, XPT and XTS);
• The registration number of the business entity is no longer a mandatory field;
• When uploading an XML file, a product description shall contain no more than 2000 characters. Otherwise, an error message will appear;
• While creating an invoice via the API service, the invoice item shall have a name containing no more than 2000 characters. Otherwise, an error message will appear;
• Adjustment of the information systems that integrate with the Electronic Invoice System using the application interface for immediate access (API);
• Enablement to see the history when archiving invoices;
• Correction to the total value in the list of outgoing and incoming invoices with the calculation considering advance payments from invoices.

Although there is still time left for companies and governmental entities to begin complying with this new mandate, the Serbian electronic invoicing system is already live, working and processing e-invoices.

The transition from voluntary to mandatory e-invoicing

The current voluntary period for public entities to register and use the Serbian e-invoicing platform, eFaktura, will last until 1 May. After that, the Serbian law on electronic invoicing will systematically regulate the areas of sending, receiving and storing e-invoices for all local governments, public companies and institutions.

Business transactions are next to fall under the scope

After the regulation for e-invoicing transactions in the public sector, it will be the turn of private entities to be able to comply with the obligation of receiving and keeping electronic invoices from the public sector. This obligation will enter into force on 1 July 2022.

The final step comes with the obligation for businesses to be able to issue and keep the electronic invoice. This regulation will become effective as of 1 January 2023.

Read the full statement of the Serbian government here.

Thus, the obligation of the public sector entity to receive and keep electronic invoices and to issue such invoices to another public sector entity comes first and will apply from 1 May 2022 (previously planned for 1 January 2022). The same postponement will apply to the mandatory B2G e-invoicing.

Other timelines stated in the law, such as 1 July 2022 for receiving e-invoices and 1 January 2023 for B2B e-invoicing, are realistic, according to the Serbian Minister of Finance, Mali. They will continue to be valid even after the above changes.

The amendments will still need to be approved by the deputies in the Assembly of Serbia.

Read the full announcement here.

MoF has launched a new website developed to share information on the upcoming e-invoicing mandate. They have as well created several instructional videos describing the manual process for eFaktura system login procedure for end-users and some of the system’s functionalities.

Along with the introduction of the website, it is also expected that:

• A test environment of the system will be available to the public in July 2021;
• Optional use of the system will be implemented from October 2021.

Legal developments

The law on electronic invoicing was released on 29 April 2021, preceded by a draft earlier in February this year. Moreover, many other decrees and ordinances guiding the use of the eFaktura system to follow have been proposed. Some of them were put to the public for consultation which was open until 28 June 2021.

Timelines

Following timelines for the use of the eFaktura system are stated in the law.

Therefore, Serbia is determinedly paving its way towards e-invoicing and digitalisation of the business operations.

As reported earlier in our previous update, Serbia published a draft law on the implementation of mandatory e-invoicing in the country. The provisions of the law were supposed to apply starting from 1 July 2021 for B2G transactions. However, an updated version of the draft law has been published, including some changes on the envisaged implementation deadline.

The changes affect B2G e-invoicing, which will become mandatory as of 1 January 2022. It should be noted, however, that the anticipated timelines for B2B transactions remain the same. That is, reception and storage of e-invoices will be mandatory starting from 1 July 2022, and the issuance of e-invoices - starting from 1 January 2023.

On 25 February 2021, the ministry of finance of Serbia published a draft law mandating the use of B2B and B2G e-invoicing.

In that respect, a public discussion on the draft law was organized by the Chamber of Commerce and Industry of Serbia, in cooperation with the Ministry of Finance.

The law is supposed to mandate among others:

• The issuance of electronic invoices for B2B and B2G transactions;
• The central e-invoicing system;

   

• The elements which e-invoices should contain; and
• E-archiving.

The provisions of the law are supposed to apply starting from 1 July 2021 for B2G transactions, while for B2B transactions reception and storage of e-invoices will become mandatory starting from 1 July 2022 and the issuance of e-invoices starting from 1 January 2023.

However, based on the industry feedback, the mandatory deadlines are not very realistic, further delays are possible. Additionally, it is suggested in the Report (supporting Report from the Public Discussion conducted in respect of the Draft law) that the deadlines stated in the Draft Law should:

• Be postponed for the 6 months as the day of entering into force of the supporting bylaw that regulates technical characteristics of the platform for issuance and reception of e-invoices in a more detailed manner; or
• To postpone the deadline for obligations regarding transactions where one party is a public sector entity to July 1st, 2022, along with the determination of a certain transition period for entities of both the private and public sector to become familiar with the new system.

Finally, one should bear in mind that the amendments of some of the Draft Law provisions are still possible since this act is still in its drafting phase and it has to be presented to the local parliament for voting.