A VAT rulebook introducing a new form – called POPDV
– was published in the Serbian Official Gazette no.80/16
dated 30th September, 2016. The rulebook has been met with strong
criticism, particularly due to its adoption without consultation
and cooperation with the private sector, as well as without taking
into account the actual applicability of the amendments.
It is believed that the new rulebook drastically and
unnecessarily increases the level of complexity of records. One of
the most controversial provisions includes a requirement for
reporting data specifying detailed goods' or services'
characteristics (such as name, type, model, quantity, etc.) which
would have a serious impact, particularly in large retail chains.
Research has shown that the average number of tax return fields in
the EU is 39; however, with the latest amendments in Serbia, the
VAT return fields would amount to a total of 297 (17 fields in the
application form and 280 in the detailed records).
Although officials have stated that the new form is being
introduced for purposes of better understanding of the business
activities of VAT payers as well as improved efficiency of tax
collection, it remains to be seen how the additional reporting
requirements (including reporting related to tax-exempt items) will
contribute towards that goal. EU practices have shown that
increasing the number of reporting fields in VAT returns does not
contribute to the increase in VAT collection.
The initially-prescribed deadline to implement the regulations
was merely 3 months, thus the race towards finding an appropriate
software solution has already commenced. Tax professionals have
also highlighted the expected increase human resource expenditures
due to the increases reporting workload, which is in turn expected
to result in higher outsourced accounting/tax advising fees.
However, as a result of the joint initiatives of various parties,
the Ministry of Finance declared on 28th October 2016 that it will
defer the implementation of the POPDV form until 2018 and will
– in the meantime – work on amending the Serbian Law on
VAT in order to eliminate perceived deficiencies.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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