The Serbian tax authority has provided the latest example of how rapidly international place of supply tax legislation is changing for digital service suppliers.
In mid-January 2017, it was announced that Serbian Value Added Tax (VAT) legislation was to change on April 1, 2017, with serious implications for foreign suppliers of digital services. The specific legal details of the VAT legislation change had been finalised in the Serbian Parliament in December 2016.
This move is a major alteration to existing legislation as the new rules require foreign suppliers of goods and services (including digital services) to register for Serbian VAT and appoint a VAT representative there.
The specific recalibration of Serbian VAT legislation is that if the supply is business-to-consumer (B2C) then the place-of-supply for that sale is the end customer’s location. This change will align Serbian VAT legislation with the European Union’s, where there were similar rule changes (specifically for digital services) introduced back in January 2015.
Little notice given to digital vendors - a recent trend
In common with recent changes in India, global digital suppliers have been given little indication that a rule change was in the legislative pipeline nor what the likely requirements of such legislation might be.
These developments give digital businesses little time to comply with the legislation. This is a global trend that looks likely to continue into 2017.
Taxamo’s analysis of the Serbian VAT rule changes has established the following key points:
- The current VAT rate in Serbia is 20%.
- There is no threshold for this law, so any sales to a Serbian consumer will require compliance by a foreign digital supplier with the law.
- There is currently no online facility for foreign suppliers to register.
- Suppliers need a tax agent in Serbia to prepare and file their VAT returns.
- This rule change, and the fact that there is no threshold, will mean compliance will be very costly if the sale amounts are low.
- Penalties for various levels of non-compliance range from from RSD (Serbian dinar) 10,000 (approx. €80) to RSD 2 million (the equivalent of €16,000).
- Penalty interest on VAT due beyond statutory deadlines is 14.25%.
Partner with Taxamo
Hand Taxamo all your Serbian VAT liabilities so you don’t have to:
- Register with Serbian Tax authority
- Hire Serbian Tax agent to settle you VAT
- File Serbian VAT returns
- Settle your Serbian VAT liabilities in Serbian Dinar to the Serbian Tax authorities
- Comply with local VAT rules
Taxamo aims to support every country which brings in destination based VAT for digital sales.
We know every business is different, we use this knowledge to create bespoke solutions for each partner. By partnering with Taxamo you get full access to the Serbian digital market.
We look after your global tax liabilities so you can continue to sell your services.
Note: Taxamo content is created for guidance only, please consult your local tax advisor for professional advice.