The Law on Amendments to the Law on Value Added Tax was published in the "Official Gazette of the Republic of Serbia", no. 153/2020, dated 21.12.2020 and entered into force on the 29th of December 2020. It is applicable as of January 1st, 2021.
The ordinance on amendments to the ordinance on determining goods and services in the field of construction, for the purposes of determining the tax debtor for Value Added Tax, provides for a threshold in the amount of RSD 500,000, excluding VAT, for the purpose of determining turnover in the field of construction in accordance with Article 10 paragraph 2, item 3) of the Law on VAT, which is determined on the day of the transaction.
A limit of RSD 500,000 excluding VAT below which a special rule for trade in goods and services (Law on VAT, Art.10, para 2, item 3) in the field of construction does not apply.
Accordingly, for the purposes of determining the value of turnover for the purposes of applying a special rule for turnover in the field of construction, the following is envisaged:
– The value of turnover is determined on the day of that turnover.
– The value of turnover is determined separately for each partial delivery.
– Subsequent increase or decrease in the value of turnover (i.e. subsequent issuance of a book approval / debit) has no impact in determining whether that turnover is considered a turnover of goods and services in the field of construction.
The stated value of turnover also refers to the partial delivery of goods and services.
In this regard, if an advance is paid which at the time of payment is considered an advance for turnover in the field of construction, after which the VAT payer performs a turnover that is not considered a turnover in the field of construction, the VAT payer is obliged to calculate VAT in accordance with the Law, and the recipient of goods, i.e. services in the field of construction makes a correction of the calculated VAT and VAT that was deducted as previous tax.
For all our clients as well as potential ones, we can provide additional information regarding the amendments to the Law on VAT, according to the new rules in the field of construction.
For further information, please contact Natasa Nedic, Country Executive, at natasa.nedic@eurofast.eu .
Eurofast is a regional business advisory organisation employing local advisors in over 23 cities in South East Europe & Middle East (SEEME). The Organisation is uniquely positioned as one stop shop for investors and companies looking for professional services in South East Europe & Middle East.
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.
