For many outsides of Europe, meaning of Value Added Tax (VAT) is unknown.

In general, VAT is a consumption tax levied and paid on the delivery of goods and services, at all stages of production and trade in goods and services, as well as on the import of goods. Additionally, Value Added Tax is a consumption tax that replaces the existing sales tax on products and services. It is important to understand that at each stage of the production-traffic cycle, a tax is calculated and paid on that part of the value, added at that stage.

Subjects of this taxation in the Republic of Serbia are delivery of goods and provision of services performed for a fee by the taxpayer in the Republic of Serbia within the scope of their business activity and imported goods (entry of goods into the customs territory of the Republic of Serbia).

Taxpayers are entities that perform sale of goods and services or imports goods within the scope of its business activity, as a permanent business activity, for the purpose of earning income, as well as Republic of Serbia and its bodies and special organizations, bodies of territorial autonomy and local self-government, as well as legal entities established for the purpose of carrying out activities within the scope of the state administration bodies are not obliged.

On the other side, tax debtor are taxpayers, a tax proxy appointed by a foreign individual or legal entity who has no headquarters or permanent establishment in the Republic of Serbia, but who carries on the supply of goods and services in the Republic of Serbia.

This type of taxation occurs on the day when traffic of good and/or services are completed, on the day when the payment is done, and on the day of the obligation of paying the customs debt.

In the Republic of Serbia VAT is rated at 20%, but some exemptions are known, and those are stipulated in the Law on Value Added Tax of Republic of Serbia in the Article 23.

Also, special taxation procedures are Stipulated in the previously mentioned Law, and they refer to small taxpayers – sole proprietor and companies whose total year turnover is less than 8.000.000,00 RSD (around 65.000,00 EUR), farmers, travel agencies. Used goods, works of art, collectibles and antiques also fall into the group for special taxation procedures.

If you have any question or doubt about VAT in Republic of Serbia or in other European countries like Slovakia, Hungary, Slovenia, etc. feel free to contact us, and let our team of accounting professionals and business consulting partners provide you with all necessary information.