Vat representative in Serbia

If you are a foreign company with a registered headquarters outside the Republic of Serbia and you perform the traffic of goods and services in our country, it is important for you to do business legally. This means that you must be registered in the VAT system. If the users of your products and services are companies or physical persons that aren’t in the VAT system they must determine (choose) the tax representative and authorise him with full power (besides the obligation of paying the VAT). The tax representative is an authorised person who does the VAT related jobs in the name and for foreign entity that are in the VAT system.

HLB T&M Consulting accounting and tax advisory firm does tax advising and offers the services of VAT representative of foreign entity in Serbia. We can help you enter the VAT system and fulfill your tax obligations on time. We also offer support so that you can achieve certain rights per the VAT Law.

 

1. Who are foreign entities that are obliged to register in the VAT system?

 

Foreign companies or foreign physical persons that are selling goods or offer services in Serbia must be registered in the VAT system. They must do that for traffic where there is an obligation of accounting the VAT or where there is a right on withholding tax. This obligation is for foreign companies with headquarters outside our country and for foreign physical persons who don’t have registered residence in Serbia, but offer services to their clients (or supply them with goods) who are not in the VAT system.

As a foreign entity who does a taxable supply of goods and services in the Republic of Serbia, you are legally obliged to choose a tax representative who will deal with the procedure of registration in the VAT system. If you need a professional business associate and a responsible tax advisor, HLB T&M Consulting  from Belgrade offers efficient solutions adjusted to your business needs.  

 

2.  The conditions for becoming the VAT representative for foreign entities

 

The tax representative of a foreign entity can be a legal entity, an entrepreneur and a physical person. These conditions must be met:

• a headquarter registered in the Republic of Serbia (or residence),
• be registered in the VAT system,
• he mustn’t have payable and unsettled debts based on public income,
• he wasn’t convicted for tax crimes.

The status of tax representative is given with the Decision with which the tax representation is approved and the process of registration in the VAT system lasts for 15 days.

 

3. The obligations of tax representative of foreign entity

 

The tax representative of a foreign entity does all the activities and VAT related jobs to fulfilling the obligations and achieving the rights that foreign entity has as a member of the VAT system.

The duties of VAT representative are related to these services

• submission of registration application,
• accounting the VAT,
• issuing VAT bills
• submitting tax applications
• paying the VAT.

 

3.1 Submission of registration VAT application for the foreign entity

 

The tax representative of a foreign entity in Serbia must submit the application for registration in the VAT system. Besides, the other duties of tax representative are:

• correct filling out of the data in the application on prescribed EPPDV form,
• submission of application to the Tax Administration –its Headquarter- based on which the foreign entity is registered in the VAT system

 

3.2 Accounting the VAT and submission of tax applications

 

The authorised tax representative of a foreign entity accounts the VAT and submits the tax application to the authorised tax administration. The account and submission of the tax applications are done on a monthly basis (for the first 12 months), and after the end of the calendar year monthly or every three months. All the duties of the VAT representative of foreign entity in Serbia related to the accounting and submitting the tax applications include next:

• accounting the VAT,
• submitting the Tax application with the review of the accounts on the normed form and normed deadlines   (PP PDV form with  POPDV),
• keeping the records and expressing the data about the total supply of goods and services of the foreign entity (for the traffic being performed or done in Serbia),
• keeping the records and expressing the data about the import of goods put in free circulation.

 

3.3 Issuing the VAT receipt

 

The tax representative of a non-resident foreign entity in Serbia, who is in the VAT system, has an authorisation and obligation to issue a receipt in the name of foreign entity. His obligations include:

• Issuing the receipts per the VAT law for every traffic of goods and services of the foreign entity in the Republic of Serbia (in the name and on behalf of the VAT payer),
• Determination of basis and the amount of the VAT in dinars (to determine the amount the exchange rate of National bank of Serbia is used),
• Issuing the accurate receipt, in the way arranged by the VAT law and per the Account policy.

 

3.4 Paying the VAT

 

The authorised VAT representative in the name and on behalf of foreign entity accounts the VAT and submits the tax application and the review of accounts for a certain tax period. Based on the taxed amount, the VAT representative can pay the VAT for the foreign entity. On the other hand, he can achieve the right on tax credit and ask for return, if the amount of previous tax is higher than the debitable VAT.

When it comes to paying the VAT, if in the tax application the debitable VAT is higher than the previous VAT, the foreign entity who is in the VAT system has the obligation to pay the difference. VAT representative is authorised to do this instead of the foreign entity.

In the other words, if in the Tax application there is a higher amount of debitable VAT compared to the previous VAT, tax representative can pay from the non-resident bank account of the foreign entity or his bank account.

 

4. A joint and several liability of tax representative in Serbia

 

The VAT representative can have a joint and several liability for all the obligations of non-resident foreign entity as the member of the VAT system. The joint and several liability of tax representative start when the Tax authority (administration) issues the Decision where they approve the tax representation. The date of beginning is the date stated in the wording of the Decision as the day when the tax representation is approved.

Besides accounting and submitting tax applications, the obligations of tax representative include:

• removal from the VAT system (including the additional administrative obligations,
• paying the VAT,
• clearing the commitments for fines and rates according to the debt related to the VAT

 

5. The end of the tax representation and removal from the VAT system

 

When the tax representation ends, the tax representative of foreign entity loses the status of the representative. The tax representative loses his position in these cases:

• when the tax authorities cancel the approval for tax representation to the person who was convicted for a certain tax crime,
• when the tax authorities receive the notice about withdrawal (or denial of representation) from the person whose representation ends with withdrawal/denial.

If the tax representation ends, the tax representative is removed from the VAT system. Also, the foreign entity is removed from the VAT system except in the case when they in a prescribed deadline choose another tax representative (who also must in certain deadline submit the new application). In case that tax representation is not approved to another VAT representative, a foreign entity is removed from the VAT system.

According to the current VAT Law of the Republic of Serbia, there are no special conditions for removing of foreign entity who are in the VAT system. It depends on the other factors, concretely if non-resident companies (or foreign physical persons) perform taxable traffic of goods and services in Serbia which has to be recorded.

On the other hand, if the foreign entity performs traffic of goods and services only with those who are in the VAT system is registered as the VAT taxpayer, he can be removed from the system because he wasn’t obliged to register. The tax representative can in the name of the foreign entity submit the application to the tax authorities for removal of the foreign citizen from the VAT taxpayer register.

 

6. Fines for foreign entity in case they don’t have the VAT representative and are not registered in the VAT system

 

Foreign entity who perform taxable traffic in our country have a legal obligation to choose the tax representative and register in the VAT system. If they do not choose the VAT representative and do not register in the VAT system, they can be sanctioned. If they fail to fulfill a legal obligation, that will be considered as a violation, and there are fines for both legal entities and physical persons.

The fines for non-resident companies that don’t choose tax representative and don’t register as taxpayers and perform taxable traffic in the Republic of Serbia can pay fine in the amount between 100 000 RSD to 2 000 000 RSD.

Foreign physical persons who perform the taxable traffic and don’t have the residence in Serbia can be fined in the amount up to 50 000 dinars, if they within legally prescribed deadline don’t choose tax representative and don’t register in the VAT system.

 

The services of VAT representative for non-residents in Serbia

 

HLB T&M Consulting offers services of tax advising, including the accounting and control of the VAT. As an agency with perennial experience in work with foreign business partners, we offer our expert services in the area of the VAT. We can offer you a solution and be your tax representative.

Our services as a tax advisor and VAT representative include:

• the procedure of entering the VAT system
• accounting the tax and issuing the VAT bills (receipts) per the Law
• submitting the tax applications and accompanying forms to tax authorities
• paying the VAT
• exercising the right on deduction and return of previous tax
• keeping the VAT records,
• communication with tax authorities
• all the other activities per the VAT rules that optimise the business when compared to the VAT

We can help you legalise your business in Serbia and avoid eventual penalties. Contact us and schedule consultations and be free to ask as everything you want to about the tax representative or the VAT accounting