AMENDMENTS TO TAX LAWS
On 3rd of December 2025, the National Assembly of the Republic of Serbia adopted draft amendments and supplements to a set of tax laws, which were published in Official Gazette of Republic of Serbia on 4th of December 2025
The most significant amendments and supplements to the aforementioned laws are presented below.
LAW ON TAX PROCEDURE AND TAX ADMINISTRATION
The law entered into force on December 12.
Expanded options for advertising in forced sale proceedings
The amendments to the Law introduce the possibility for the sale of real estate to be advertised also through the website of the competent Local Self-Government authority (hereinafter: LSG), in addition to the existing channels (notice board, website of the Tax Administration, daily newspapers).
Sale of real estate by direct agreement
Under the adopted amendment, the Mayor, or a person authorized by him within the LSG, may determine by decision the sale of real estate by direct agreement, where such real estate has not been sold in accordance with the rules on oral public auction within a period of three months from the decision determining the public sale.
Until now, this authority was vested solely in the Director of the Tax Administration or a person authorized by him within the Tax Administration..
New powers of the Tax Administration in the control of tax incentives
If, during a tax audit, the Tax Administration determines that an employer does not meet the conditions for the use of tax incentives, the competent tax authority may, by decision, the employer is ordered to pay taxes and mandatory social security contributions, without the obligation to submit amended tax returns.
This represents a departure from the previous practice, which required the mandatory filing of amended tax returns.
Simplified write-off procedure for low-value amounts
A simplified procedure for the write-off of tax liabilities and tax overpayments arising due to the statute of limitations or other reasons is introduced, whereby individual decisions are not issued for amounts below RSD 100, and such write-offs are carried out ex officio.
PERSONAL INCOME TAX LAW
Applicable from 1 January 2026.
Non-taxable amount
Non-taxable amount for calculation of salary tax increased from RSD 28.423 to RSD 34.221.
Losing the right to tax credit
In terms of calculating annual income tax, deadline in which a taxpayer loses the right to tax credit when selling investment units used to realize tax credit is decreased from three to two years.
Meaning taxpayer who realized the right to use tax credit by acquiring investment units of alternative investment fund is allowed to sell the units within two years from the year of the acquisition, instead within three years until now.
Submission of tax returns
The competence of the Tax authority to which tax returns are submitted has been specified for realizing:
- Income from self-employment – in electronic form via the Tax Administration portal; instead of submitting it to local the tax authority where the registered seat is located;
- Income from immovable properties – in electronic form via the Tax Administration portal or by mail to the organizational unit of the competent Tax Administration at the territory where the taxpayer has permanent or temporary residence; instead to the tax authority where property, home-based business premises, or rural tourism household facility, is located;
- Income from the provision of hospitality services – to the organizational unit of the competent Tax Administration at the territory where the hospitality facility is located; instead to the tax authority where property, home-based business premises, or rural tourism household facility, is located;
- Capital gains and other income to which tax is not paid by withholding – in electronic form via the Tax Administration portal, in person, or by mail to the organizational unit of the competent Tax Administration at the territory where the taxpayer has permanent or temporary residence; instead of the tax authority where the taxpayer has permanent or temporary residence.
Tax incentives for hiring new employees
Deadline for using tax incentives related to newly employed persons realized as tax refund (65%-75%) of paid tax and social security contributions on salary has been extended from 31st of December 2025 to 31st of December 2026.
The minimum period of six months during which a newly employed person, for who the employer is entitled to partial tax refund, should be registered as unemployed at National employment agency does not apply to unemployed persons under age of 30 that are registered for the Youth Guarantee program.
VALUE ADDED TAX LAW
The Law entered into force on 12 December, while the majority of its provisions will apply as of 1 April 2026.
Postponement of the introduction of the concept of the preliminary tax return
One of the most significant amendments to the Law concerns the postponement of the introduction of the preliminary tax return by one year. The obligation to introduce the preliminary tax return is postponed to the tax period of January 2027.
Correction of errors from previous tax periods in the current tax return
It is stipulated that a VAT taxpayer may to, in the current tax return, report a lower amount of calculated VAT or a higher amount of previously declared input tax from prior tax periods. This shall be deemed to correct an error that resulted in an incorrectly determined tax liability, meaning there is no obligation to submit an amended tax return.
This amendment shall apply as of January 1, 2027.
Persons considered as tax debtor
Tax debtors are considered as:
- A person who declares VAT on an internal invoice without a legal obligation, and
- The recipient of investment gold in the trade of investment gold between two VAT-registered persons
Issuance of periodic invoices for the supply of goods
In the case of issuing periodic invoices for the supply of water, electricity, natural gas, and energy for heating or cooling for final consumption, the supply shall be deemed to have been performed on the last day of the period for which the invoice is issued.
The period for which such a periodic invoice is issued may not exceed one year.
This amendment shall apply as of January 1, 2026.
Adjustment of the tax base
It is stipulated that a credit note must be issued in the event of a subsequent reduction of the tax base for a supply for which the VAT obligor, as the supplier of goods and services, is the tax debtor.
The adjustment of the tax base is made in the tax period in which the change occurs.
It is prescribed that, in the case of a reduction of the tax base, the reduction of the calculated VAT shall be applied in the tax period provided that the prescribed conditions for the reduction are met by the day preceding the submission of the tax return for that tax period, and no later than the 10th calendar day of the month following that tax period.
Correction of input tax deduction in case of a change in the tax base
The method and deadlines for correcting input tax in the event of a change in the tax base have been adopted
- A VAT taxpayer shall adjust – by reducing the input tax deduction for the relevant tax period – if, as of the day preceding the filing of the tax return for that period, and no later than the 10th calendar day of the month following that period, the taxpayer possesses a previously issued reduction document or has canceled the document that gave rise to the obligation to reduce the input tax within that timeframe.
- A VAT taxpayer shall make a correction – an increase in the input VAT deduction for the tax period for which the statutory conditions for entitlement to input tax deduction are satisfied. In the event of a cancellation, the correction – increase of input VAT deduction – shall be applied to the tax period if, as of the day preceding the filing of the tax return for that period, and no later than the 10th calendar day of the month following that period, the document underlying the correction has been canceled.
Method of preparing of an internal VAT invoice
The tax debtor, or the recipient, issues an internal invoice on the basis of the supply of goods and services, any increase or decrease in the tax base for the supply, as well as on the basis of advance invoices and reductions of advance invoices.
A new provision has been introduced whereby a user of the Electronic Invoice System (SEF) prepares the internal VAT invoice within SEF.
Requirements for the deduction of input VAT
In the case where tax debtor is the recipient of goods and services, the right to claim input tax deduction for the tax period may be exercised provided that the internal invoice is prepared by the day preceding the submission of the tax return for that tax period, and no later than the 10th calendar day of the month following that tax period.
A VAT taxpayer is entitled to claim input tax deduction within five years following the end of the year in which the VAT liability arose. instead of within a period of 5 years from the expiry of the deadline in which the taxpayer acquired the right to deduct input VAT.
Cancellation of an internal invoice
A person is obliged to pay the VAT stated on the internal invoice.
It has been determined that if an internal invoice is canceled by the day preceding the submission of the tax return for the tax period, and no later than the 10th calendar day of the month following that tax period, the tax base for that period shall be reduced, and the amount of VAT may also be reduced for the same tax period if, within the specified timeframe:
- a new internal invoice is issued (if there is an obligation to issue an internal invoice), and
- the input tax deduction is corrected, provided that the calculated VAT was used as input tax
Cancellation of the invoice
It has been adopted that if a VAT taxpayer cancels an invoice with the stated VAT by the day preceding the submission of the tax return for the tax period, and no later than the 10th calendar day of the month following that tax period, the tax base for that period shall be reduced, and the VAT amount may also be reduced for the same tax period if:
- a new invoice has been issued (if there is an obligation to issue an invoice), and
- possesses a notice from the invoice recipient, VAT taxpayer, or the party entitled to reclaim VAT, confirming that the VAT indicated on the reversed invoice has not been claimed as input tax, and that no claim for a refund has been or will be submitted.
It is further clarified that the notification from the invoice recipient is issued after the invoice has been cancelled.
LAW ON ELECTRONIC INVOICING
Applicable from 1 January 2026.
Following the amendments to the Law on Electronic Invoicing, the electronic invoicing system now allows not only the issuance, sending and receipt of invoices, but also the storage of documents processed or created within the system.
Obligation to issue an electronic invoice
By the amendment of Article 3 of the Law, the obligation to issue an e-invoice is introduced:
- when retail transactions are performed with corporate card holders, including any advance payments received;
- when retail transactions are performed with public sector entities, provided that the public sector entity submits a request for an electronic invoice within seven days from the date of the transaction.
In addition, to prevent double recording of the same transaction, an electronic invoice in the above-mentioned cases may only be issued after the fiscal receipt has been issued.
Electronic registration of VAT calculation
The amendments clarify that VAT taxpayers are not required to electronically record VAT in cases where no electronic invoice has been issued for retail transactions involving corporate card holders or public sector entities.
Electronic invoice issuance and receipt
In addition, the amendments allow private sector entities to directly receive electronic invoices from foreign entities issued in compliance with the European electronic invoicing standard, once the required technical and technological conditions are implemented in the electronic invoicing system.