AMENDMENTS TO THE VAT LAW

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At the session of the National Assembly, held on 17.12.2020, the Law on Amendments to the VAT Law was adopted. The Law was published in the “Official Gazette of RS”, No. 153/2020 on 21.12.2020 and will apply from 1.1.2021, except for the provision concerning the tax exemption relating to virtual currencies, which will apply from the day of the beginning of the application of the law which regulates digital property and the provisions containing the authorization for the adoption of the bylaw which will be applied from the day the amendments enter into force.

The most significant amendments to the Law on VAT relate to the following:

  • the transfer of the right of disposal of movable property which is performed with the transfer of the right of disposal of a construction object or economically divisible unit within a construction object which is considered immovable property in the sense of the law governing real estate transactions is considered ancillary supply of goods (in addition to the transfer of the right of disposal on a construction object or an economically divisible whole within a construction object that is considered real estate in terms of the law governing the transfer of real estate).
  • Ancillary provision of services is not considered to be the service of renting, ie giving for use of a construction object or economically divisible unit within a construction object which is considered real estate in the sense of the law which regulates real estate transactions.
  • Precise definition of a value voucher
  • Investment funds are considered taxpayers
  • For turnover in the field of construction, it is prescribed that the tax debtor is the recipient, provided that the value of that turnover is higher than 500,000 dinars, without VAT. In the case of turnover whose value is up to 500,000 dinars without VAT, the tax debtor will be the taxpayer performing the turnover – the contractor in accordance with the general rules.
  • Precise definition of amounts that are not included in the tax base
  • Tax exemption for sales of goods that are in the process of inward processing: VAT is not paid on sales of goods that are in the process of inward processing for which the taxpayer-acquirer would have the right to deduct previous tax if he purchased those goods with calculated VAT.
  • VAT is not paid in the turnover of capital, money in the transfer of virtual currencies and the exchange of virtual currencies for cash, in accordance with the law governing digital assets.
  • Occasional transactions of shares, securities, postal securities, taxes and other valid securities at their imprinted value in the Republic, except for ownership shares referred to in Article 4 of the Law on VAT, are not included in transactions for determining the percentage of proportional tax deduction
  • Complete amendment of the rules governing the special procedure for taxation of second-hand goods, including second-hand motor vehicles, works of art, collectibles and antiques
  • Prescribes the right to choose the taxpayer (engaged in the sale of second-hand goods) to choose whether to apply special or general taxation procedure.
  • Submission of a registration application after the prescribed deadline.
  • When deleted from the VAT system, VAT is not stated as due, but as a correction of the previous tax deduction (from 1 January 2021, it will not be shown in field 3.5, but in field 8e.4 of the VAT Return Form)
  • It is prescribed that the taxpayer may issue an invoice in electronic form if there is the consent of the recipient
  • The reversal and correction of the invoice in which the VAT was erroneously stated is regulated in more detail

Detailed explanations of the amendments to the Law on VAT: link Tax Alert.