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