The VAT refund in Serbia

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The procedure of VAT refund represents exercising the right on tax return to the VAT payer. The refund is given to the recipient of goods or to user of services who paid the VAT during the purchase of that good or service.

If the amount of previous tax is higher than the amount of tax obligation, the VAT payer can exercise his right on a tax return. To do that, it is necessary to show the VAT on tax application and the amount of return tax. He has two possibilities: to choose tax return (refund) or to use it as a tax credit.

1. The VAT refund in Serbia and tax credit –basic differences

To a foreign person or any other taxpayer who has the right on TAX refund and who chooses this option, the tax is refunded on the account of bank that was named in the application for registering the VAT payers. Choosing the option of VAT refund isn’t considered as demand and this right can be exercised by applying for it to the Tax Administration on ZPPPA form.

On the other hand, if a taxpayer doesn’t choose for VAT refund, that amount can be used as a tax credit. He can use it for paying regular tax obligation during a certain tax period. If he still has an unused amount of tax credit after paying for all the tax obligations, a foreign citizen or another taxpayer can get the refund of the unused tax credit. In that case, the application is submitted to authorised tax authorities earliest before the end of deadline for submitting the tax application for the current tax period.

HLB T&M Consulting is an accounting agency for business and tax consulting. We can help you apply for the VAT refund and exercise your rights.

2. What types of VAT refund exist in Serbia?

According to the current VAT Law and the Rulebook on the procedure for realisation of the right to a VAT refund there are four types of VAT refund: Those are:

VAT refund to foreign taxpayer,
VAT refund to humanitarian organisations,
VAT refund to traditional churches and religious communities,
VAT refunds to diplomatic and consular offices and international organisations.

2.1 VAT refund to a foreign taxpayer

Foreign persons or foreign taxpayers can exercise the right on refund if they perform taxable traffic of movable property and provide services in the Republic of Serbia. The refund of the VAT in Serbia for foreign taxpayers is done under next conditions:

The receipt must contain the amount of VAT for performed traffic of goods and services,
The receipt is paid,
The amount of VAT for which the application for refund is submitted is higher than 200 Euros (in dinar counter value according to the NBS’s exchange rate),
All the conditions are met for exercising the rights of taxpayer for the refund of previous tax for those goods and services,
The foreign taxpayer doesn’t perform the traffic of goods and services in the Republic of Serbia, besides the traffic he can exercise his right on:
The services of transportation of goods which are per the LAW free from VAT,
The services of passengers’ transportation which are under individual taxation,
For the traffic of goods and services in the case where the recipient of those goods and services has to account for the VAT.

Related to the last condition, if a foreign person or foreign company in the Republic of Serbia performs the taxable traffic of goods and services, besides the ones enlisted above, he doesn’t have right on VAT refund.

So that a foreign taxpayer gets the VAT refund, an authorised person must submit the application to the Tax Administration together with the additional documents. The application and documents are sent electronically through the web site of the Tax Administration. The deadline for applying is at the latest to the 30^th of June of the current year and it is submitted once a year for all the goods, or services supplied during the current calendar year (in Serbia).

These are the documents you have to submit:

The VAT refund application on REF 1 form (the application of foreign taxpayer for refund),
The confirmation of VAT registration, issued by the Tax authorities of the country where the headquarter of foreign company is situated (the original and certified translation of the document are submitted),
Paid receipts of foreign goods or used services in Serbia together with the accounted VAT.

HLB T&M Consulting accounting agency we offer support when it comes to the analysis and possibilities for VAT, finding VAT representative and registration in the VAT system, accounting the VAT and everything related to the VAT refund. Contact us for additional questions and submitting the necessary documentation.

2.2 VAT refund to the humanitarian organisations

The organisations registered for humanitarian work can also exercise the right on the VAT refund. These conditions must be met:

the goods are delivered to humanitarian organisations in Serbia,
the traffic of those goods must be taxable,
the amount of VAT for delivered goods is shown in the receipt,
the receipt is paid,
delivered goods are transferred abroad where they are used in humanitarian, charity or educational purposes.

For humanitarian organisations to exercise their right on the VAT refund, it is necessary to apply the application on the prescribed form together with the additional documentation to the Tax administration or their Headquarter. The application is submitted once a year for all the goods supplied in our country during the previous calendar year. The deadline for submission is at the latest until the 30^th of June of the current year.

The submitted documents are:

The application on REF 2 form (The application of humanitarian organization on refund)
a proof of the registration of the humanitarian organisation,
the receipts about supplied (bought) goods in the Republic of Serbia,
a proof that all the receipts have been paid,
proof that the goods have been shipped abroad and proof that goods are being used for humanitarian, charitable or educational purposes,
data about the foreign recipient (the name, the address and the purpose of using the goods.

2.3 The VAT refund to traditional churches and religious communities

Traditional churches and religious communities have the right to exercise the VAT refund. This is the list of them:

Serbian orthodox church,
Islamic community,
Catholic church
Slovakian evangelistic church,
Jewish community,
Reformed Christian church,
Evangelistic Christian church.

The traffic for which you can get the refund is acquiring goods or acquired or received services used in the Republic of Serbia, as well as the import of goods. The product and services for which you can get the VAT refund must be directly related to religion or used for religious communities.

The VAT refund for traditional churches and religious communities can be performed if these conditions are met:

The traffic of goods and services together with import is related to religious work,
The traffic or import is taxed by the VAT,
The VAT is shown on the receipt,
The receipt is paid (from a person who has the right on refund.

The application for the refund can be submitted within 60 days after the end of calendar trimester when the taxable traffic happened. The submitted documents are:

The application on prescribed form REF 3A (The application of traditional church or religious community for refund,
The receipts of supplied merchandise (or goods),
The receipts of services that have been used in Serbia,
The documents of import to our country,
The proofs of paid receipts from the taxpayers who have right on refund or return of shown VAT (that person who has the right on refund, paid the VAT on the import of goods).

HLB T&M Consulting accounting agency stands at your disposal for all the additional questions about the refund. We provide services of business consulting and feel free to send us questionary to schedule the consultations.

2.4 The VAT refund to diplomatic and consular offices and international organisations

Diplomatic and consular offices as well as international organisations can exercise the right on the VAT refund if the traffic of goods and services or import is done for:

Official needs of diplomatic and consular offices,
Official needs of the international organisation if that is arranged by international contract,
Personal needs of foreign stuff from diplomatic and consular offices including the members of their families,
Personal needs of foreign stuff from the international organisation, including the members of their families if that is arranged by international contract.

They can get VAT refund in Serbia if certain conditions are met:

If the delivery of goods, provided service or import are VAT taxable,
The VAT for that traffic or import is shown on the receipt,
The whole amount has been paid,
The complete amount shown in the receipt (or in the customs document) is higher than 50 Euros without the VAT (except for buying the fuel for vehicles).

To exercise the right, it is necessary to submit the application on the prescribed form to the Tax administration. The application is submitted by a person authorized for issuing official and personal orders for the supply of good and services that are VAT free. The deadline for applying for VAT refund is 30 days before the end of calendar trimester in which the supply of goods and services in Serbia was performed or in which the import in the Republic of Serbia happened.

The documents that must be submitted are:

Form REF 5 (The application of diplomatic and consular office and of international organization for VAT refund,
The receipts of supplied goods or used services in the Republic of Serbia (the receipts must be named on a right holder, must have the data about the number of confirmation and contain proofs about their payment),
The documentation about the performed import of goods in the Republic of Serbia, together with the proofs of paying the import VAT,
If a fiscal receipt was issued to a right holder, then on the back of receipt the title, name and surname of the right holder, basic confirmation number and the signature of the supplier must be written.

As your business and tax advisor, we can help you with the submission of demand so that you can exercise the right on the VAT refund in Serbia. Our support includes accounting and expressing the VAT in order to for you to successfully exercise your tax rights in our country. Feel free to contact our team of tax experts and schedule consultations for all additional questions regarding the VAT refund.