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  • Tax Highlights- July 2018-2
Article:

Tax Highlights- July 2018-2

12 July 2018

AMENDED RULEBOOK ON THE MANNER AND PROCEDURE FOR ACCOMPLISHING VAT EXEMPTIONS WITH THE RIGHT TO PRELIMINARY TAX DEDUCTION

The Ministry of Finance of the Republic of Serbia has published an amended version of the Rulebook on the Manner and Procedure for Accomplishing VAT exemptions with the right to preliminary tax deduction. The main reason behind the amendments to the said Rulebook is the harmonisation of its provisions with the provisions of the Value Added Tax Law in order to ensure consistent and balanced practice with tax exemptions. The amended Rulebook has been applicable since 1 July 2018, except for the amendments related to exercising an exemption on the supply of goods that foreign individuals carry abroad in their luggage, which shall be applied from 1 January 2019.  Below are presented some of the important amendments:

The application shall be effective as of 1 July 2018

  • The new Rulebook specifies that a tax exemption regarding  transportation services related to the import of goods may be accomplished regardless of whether the transport of goods is performed by one ore more entities. The Rulebook further stupulates that the fee for the transport services includes all amounts charged by the carrier (e.g., tolls, storage etc.); Such an amendment shall facilitate the application of the tax exemption for carriers and importers as it ensures the application of the tax exemption in a consistent manner, which has been disputable so far with the transportation of goods by a larger number of carriers in a chain;

  • The Rulebook amendments with regard to exercising the right to a tax exemption when exporting goods are now harmonised with practice and the existing opinion of the Ministry of Finance as follows:

    • If the customs clearance is carried out in one tax period and the transfer of goods is confirmed in the following tax period, the taxpayer can obtain a tax exemption for the tax period in which they hold the customs declaration with the confirmed clearance from the Republic of Serbia, whereas the taxpayer is not obligated to be charged for VAT or to report the turnover or the period in which only  customs clearance is performed. However, ifhe clearance of goods is not confirmed in the following tax period, the taxpaxer is obliged to calculate VAT for the tax period in which the customs clearance of goods is carried out by submitting an adjusted tax return for that period;

  • The Rulebook now provides more detailed conditions, in accordance with the Value Added Tax Law, for accomplishing a tax exemption on the introduction of goods to a free zone and the related transportation services in circumstances when goods are introduced to the free zone (i.e. delivered to a free zone consumer in the Republic of Serbia) and the supply is made and/or a supply invoice is issued to a foreign entity with which the free zone consumer has entered into a contract on embedding such goods into other goods that the consumer will be delivered to. Consequently, this enables the application of a tax exemption in practice for many companies in the Republic of Serbia that do business in free zones in the regime of active refinement or processing under customs control;
  • When submitting a request for a tax exemption certificate on the supply of goods and services in accordance with international treaties , it is no longer necessary to have the seal of an authorized user of the funds, but only their signature. This will to a ceretain degree simplify the procedure of obtaining the right to a tax exemption in such circumstances ;

  • Transportation and other services related to the export, transit or temporary import of goods, apart from the services that are exempt from VAT without the right to tax a deduction, refer to the transport of goods from the place of their first loading in the Republic of Serbia to the last destination outside the Republic of Serbia; In this way, the harmonisation between the provisions of the Rulebook and previous amendments to the Value Added Tax Law has been achieved.

The application shall be effective as of 1 January 2019

  • A taxpayer may be entitled to a tax exemption on the transfer of goods that a passenger carries abroad in their personal luggage in the tax period in which the taxpayer has evidence that the passenger has sent goods abroad.

AMENDED RULEBOOK ON THE FORM, CONTENT AND MANNER OF KEEPING VAT RECORD AND ON THE FORM AND CONTENT OF THE VAT CALCULATION

A new Rulebook on the Form, Content and Manner of Keeping VAT Record and on the Form and Content of the VAT calculation (hereinafter: record) came into force on 1 July 2018.

In accordance with this Rulebook, the VCR (VAT calculation review) form is to be submitted with the tax return, in an electronic form, starting from the tax return for the tax period of July 2018 or July – September 2018. Below are presented some of the important proposed amendments:

  • The taxpayer is obliged to provide the data on transactions, activities or other business changes in this record, activities, and in particular the data about the goods and services supplied by and to  the VAT payer - it is necessary to provide these data by submitting documents confirming a  business change (contracts, etc.);

  • In addition to the data that have already been available, the record should also include the data on the supply of investment gold and supply of brokerage services in the supply of investment gold on which no VAT is charged;

  • The records related to the special procedure for taxation of travel agencies and used goods, art works, collector's goods and antiques shall include at least the following information: (1) the selling price, including any of its increase/decrease , (2) the received advance and (3) the purchase price of the good, including any of its increase/decrease;

  • Records related to the import of goods placed in free circulation in accordance to the customs regulations should include VAT information paid upon import of goods, which can be deducted as a prior tax, in addition to all other known data that it should contain;

  • Records relating to the circulation of goods and services performed outside the Republic, with or without compensation and other non-taxable transactions, include, among other things, data on the supply of goods and services within the framework of the implementation of the public-private partnership contract with elements of the concession, with or without compensation as a stake;

  • A taxpayer who is engaged in supply of investment gold is required to keep a separate record of all investment gold activities, and Article 24a of the Rulebook specifies which data these records should contain;
  • The Rulebook contains precise explanations on how to fill out the VCR form;

RULEBOOK ON DETERMINATION OF GOODS AND SERVICES WHOSE SUPPLY IS TAXABLE AT A REDUCED VAT RATE

A new Rulebook on the Determination of Goods and Services whose Supply is Taxable at a Reduced VAT Rate came into force on 1 July 2018.The Rulebook amendments specify certain goods that are taxable at a special rate, namely livestock feed, supplementary livestock feed and firewood.