Value-added tax or VAT is a general consumption tax that is calculated on the turnover. Certainly, this is one of the basic things in the focus of the accountants and the accounting firms when it comes to providing accounting services.
The VAT is paid on the realized turnover from selling goods and given services, which is realized during every sale. The VAT is also paid during the import of goods on the territory of the Republic of Serbia.
The rates of value-added tax (VAT)
According to the Value added tax law in Serbia, there are two rates of VAT. These are:
- The general rate of VAT – 20%
- Special rate of VAT – 10%
According to the consumption rate of a 20% taxable supply of goods, services or the import of goods. Everything else, where turnover is not freed from paying VAT is taxed according to the special rate of 10%
General VAT rate of 20% for supply of goods
According to paragraph 4. of the Value added tax law, the supply of goods taxable with a 20% rate includes the transfer of ownership right on corporal things to another person, which would be considered as an owner. Water, electricity, gas, and energy for warming or cooling are also considered as goods.
The supply of goods includes:
- The transfer of ownership rights on goods with compensation.
- The delivery of goods based on the sale on credit contract.
- The delivery based on a leasing contract, or rent, concluded on a certain period, for movable and immovable properties.
- The delivery from the owner to the commission agent and vice versa.
- The delivery of goods according to the contract where the commission is paid during the sale.
- The delivery from the owner to the consignee and from the consignee to the owner.
- The delivery of goods produced or composed according to the customer’s order from deliverer’s materials.
- The transfer of ownership rights or the transfer of the owner’s share on construction objects or economically dividable aggregates of those objects.
- The trade of goods for other trades and services.
Supply of goods with compensation includes:
- Taking of goods which are a part of the business property of the taxpayer for the personal needs of a founder, an owner, the employees or other persons.
- Any other supply of goods without compensation.
- Expressed expenditure (ullage, spillage, breakage, and defect) above quantity regulated by the act of the government of the Republic of Serbia.
General VAT rate of 20% for supply of services
According to paragraph 4. of the Value added tax law, the supply of services includes all the jobs which are not the supply of goods, but where the certain services are done:
The supply of services includes:
- The transfer, assignment and giving permission for usage of copyrights and similar rights, patents, license, trademarks and the other rights of intellectual property.
- Provision of services with compensation.
- The delivery of goods produced or composed according to ordered by a client, from deliverer’s materials.
- The trade of services for goods or services.
- The delivery of food and drinks for consummation on the spot.
- Ceding of share or rights.
- The supply of services with compensation includes:
- The usage of goods which are a part of the business property of the taxpayer for the personal needs of a founder, an owner, the employees or other persons.
- The supply of services which taxpayer carries out without compensation for the personal needs of a fonder, an owner, employees or other persons.
Special rate of value added tax (VAT) – 10%
Paragraph 23 of the Value added tax law defines the list of goods and services taxable according to the special rate of VAT. This pertains:
- Bread and other bakery products, milk and dairy, flour, sugar, edible sunflower oil, corn, coleseed, soya and olives, edible fat of animals and plants and honey.
- Fresh, cooled and frozen fruit, vegetable, meat including entrails and other butchery products, fish and eggs.
- Cereals, sunflower, soya, sugar beet and coleseed.
- Medicines, including those used in veterinary medicine.
- Orthopedic and prosthetic articles, as well as medical articles – products surgically incorporated in the organism.
- Dialysis material
- Fertilizer means for protecting plants, reproduction semen, seeding material, compost with mycelium, complete and additional mixtures for feeding cattle and live cattle.
- Schoolbooks and teaching material, daily newspaper, monographic and serial publications
- Firewood, briquette, pellet and other similar products.
- Services of accommodation in hospitality objects according to the Law on tourism.
- Services paid by selling tickets (only if this volume of sales is not freed from VAT.
- Natural gas; thermal energy used for heating.
- The transfer of ownership rights on construction objects or economically dividable aggregates of those objects, as well as the owner’s shares on these goods.
- The services which precede delivery of drinking water through plumbing, so as drinking water except for the bottled one.
- Abstersion and draining of atmospheric and wastewaters; control of communal waste; cleaning public places; maintenance of green areas and shores
- The transport of passengers and their luggage; controlling cemeteries and burial services.
When is a company obliged to calculate VAT in Serbia
The companies which administer the sale of goods/services on the territory of the Republic of Serbia and whose volume of sales in the last 12 months wasn’t higher than 8 000 000 RSD, don’t have to calculate VAT. The same is for the companies which sell products in foreign countries if it is not higher than 8 000 000 RSD.
There is no obligation for paying VAT when after setting up the company is determined that the volume in the next 12 months won’t be higher than 8 000 000 RSD in. If some company wants to get within the VAT system, it can do it freely
Bondager of VAT has a duty to issue an account for every volume of sales of goods and services. All the legal persons within the VAT system must issue an invoice with all the necessary elements and do that for every sale.
The deadlines for delivering VAT applications and vat refund
The VAT bondagers must apply for VAT to amenable Tax administration. The application is made on a formal file in the appointed deadline.
The deadline for making the VAT application is a maximum of 15 days, from the expiration date of the tax period (one-month or three-months). Tax application is compulsory and in most cases, it is done by the accountant or the engaged accounting company, no matter if the company is obliged or not to pay VAT in that period.
Let us remind that during expressing VAT besides tax application, the company must also file a review of VAT accounts because without it tax application is considered incomplete.
The tax period for which VAT is accounted for and filed can be one month or three months.
A company has right on different refunds in the case when the accounting agency determines that the company which is VAT bondager has a higher amount of previous tax than the amount of tax due.
For the unused difference the company can ask for:
- Tax refund.
- The difference is considered as a tax credit.
If a legal person decides for a tax refund then it is necessary to enter a plea to the authorities and the deadline for the tax refund is 15 to 45 days starting from the day of delivering tax application.
If you have any doubts with VAT accounting, we advise you to consult the accounting agency specialized for demanded accounting services in Belgrade and has experience in VAT accounting.