Serbia is preparing a major update to its value-added tax system that would strengthen links between electronic invoicing, tax registration and corporate reporting from 1 January 2027. The proposed amendments would keep the existing RSD 8 million VAT registration threshold and most current exemptions unchanged, while introducing stricter reporting deadlines, automated tax procedures and a broader digital record trail for companies, entrepreneurs and agricultural producers.
- Electronic invoicing becomes central to VAT compliance
- Changes proposed for voluntary VAT registration and deregistration
- VAT clearance requirements affect corporate restructuring
- Tax Administration gains broader filing powers
- New rules address late registration and transaction reporting
- Annual disclosures expand supply-chain transparency
- Existing exemptions and refund rules largely preserved
- Transition rules affect 2026–2027 contracts
The reform is not focused on changing VAT rates. Instead, it would increase the role of Serbia’s electronic tax infrastructure by allowing the Tax Administration to reconstruct and, in certain cases, submit VAT returns using information already available through the electronic invoicing system and tax databases. The amendments remain a legislative proposal and would become effective only after completion of parliamentary procedures and publication in the Official Gazette. Under the proposed schedule, secondary legislation would need to be adopted by the Ministry of Finance by 15 December 2026.
Electronic invoicing becomes central to VAT compliance
The planned changes build on reforms introduced during late 2025 and 2026, including expanded use of the Electronic Invoicing System (SEF), updated invoice correction rules and the planned introduction of preliminary VAT returns. For businesses, the changes would require closer coordination between invoicing, accounting records, contractual documentation and tax reporting processes.
The mandatory VAT registration threshold would remain at RSD 8 million, approximately €68,000, based on turnover generated during the previous 12 months. New businesses would continue calculating eligibility based on expected turnover for the following year. The proposal would not include equipment and business buildings when determining turnover for small-taxpayer status. It would also clarify that compensated investments in business premises are excluded from the calculation. The clarification could affect arrangements involving construction works, concessions, leasehold improvements and investor-contractor agreements where one party finances or carries out works on an asset owned or used by another party.
Changes proposed for voluntary VAT registration and deregistration
Businesses and agricultural producers that voluntarily enter the VAT system would face a revised minimum participation period. Instead of the current requirement to remain registered for at least two years, taxpayers would remain in the VAT system for the calendar year of registration and the following calendar year. The effective duration would depend on the registration date. A company registering in January could remain subject to VAT rules for almost 24 months, while one registering in December could potentially leave after around 13 months if statutory conditions are met. The timing of voluntary registration could therefore become more important for start-ups and seasonal businesses planning significant investments and expecting VAT deductions on equipment, construction works or services.
The deregistration process would also become more formalised. Taxpayers whose turnover remained below RSD 8 million during the previous 12 months could request removal from the VAT register. Applications would have to be submitted within five days after VAT activity ends. If conditions were fulfilled, the Tax Administration would issue a deregistration certificate. The certificate would become a prerequisite for removal from Serbia’s business registers. Companies and other registered entities could not be deleted from the relevant registry before the Tax Administration confirms that VAT deregistration has been completed.
VAT clearance requirements affect corporate restructuring
The proposed rules would also affect mergers, demergers, liquidations and other corporate reorganisations. If a taxpayer ceases to exist due to a restructuring, its legal successor would have five days to notify the Tax Administration. VAT deregistration could then be completed automatically by the authorities.
The changes would make VAT clearance a more significant element of corporate transactions. Investors, lenders and advisers would need to review outstanding tax obligations, final returns, invoice corrections, input VAT adjustments and deregistration documentation during due diligence procedures. The existing distinction between monthly and quarterly VAT reporting would remain.
Companies with annual turnover above RSD 50 million, approximately €427,000, would generally continue filing monthly VAT returns, while businesses below that level would remain quarterly taxpayers. Businesses that voluntarily switch from quarterly to monthly reporting would have to remain under the monthly regime until the end of the calendar year following the year in which they request a change. Requests to modify or cancel a tax period would be submitted between 20 and 31 December.
Tax Administration gains broader filing powers
VAT return deadlines would remain unchanged, with returns due within 15 days after the end of the relevant tax period. The proposal introduces a new mechanism for taxpayers that fail to submit returns on time. The Tax Administration would be authorised to submit a VAT return ex officio using a preliminary VAT return generated from available electronic data. Such a return would include only information on output VAT.
The system could create additional financial exposure for companies because automatically prepared returns may record VAT charged on sales without recognising deductible input VAT that has not been documented or confirmed. A missed filing deadline could therefore result in higher immediate tax obligations, interest charges and enforcement risks. Businesses would need to reconcile SEF records, accounting systems, customs documentation, credit notes, advance payments and reverse-charge transactions before filing deadlines. Companies would also need accounting and ERP systems capable of identifying differences between internal records and preliminary VAT data before returns are submitted.
New rules address late registration and transaction reporting
The proposal introduces procedures for businesses that register late for VAT or exceed the registration threshold during a tax period. A taxpayer becoming VAT-registered during an ongoing tax period could be required to submit two separate VAT returns: one covering the period before registration and another covering transactions after registration. Late registrants would be allowed to correct VAT obligations from previous periods in their first return after registration. Such corrections would be treated as adjustments to tax liabilities and could trigger rules related to amended returns and potential liability.
Companies approaching the RSD 8 million threshold would need continuous turnover monitoring rather than relying only on annual financial statements. The proposed framework would also require electronic reporting within five days of changes affecting VAT calculation or payment, including changes to business activities, tax status, addresses, organisational structures or other registered information.
Annual disclosures expand supply-chain transparency
The reform would introduce an annual electronic disclosure submitted together with the final VAT return of the year.
Taxpayers would report transactions involving:
- non-VAT-registered suppliers of secondary raw materials and related services;
- agricultural producers outside the VAT system.
The requirement could have particular relevance for metals recycling, waste management, construction materials, manufacturing supply chains and agricultural processing industries where transactions often involve numerous smaller suppliers and additional documentation requirements.
For agricultural producers, the mandatory VAT registration threshold would remain RSD 8 million. Farmers below this threshold would continue operating outside the VAT system unless they voluntarily register. They would not charge VAT, display VAT on invoices or deduct input VAT.
VAT-registered buyers purchasing agricultural and forestry products and eligible services from qualifying farmers would continue calculating an 8% VAT compensation payment. The payment would have to be transferred directly into the farmer’s current or savings account, increasing transaction traceability. Changes in transaction value would require additional documentation, including new receipts for increases or reduction documents where values decline.
Existing exemptions and refund rules largely preserved
Most existing VAT exemptions would remain unchanged under the proposal. The exempt categories would continue to include financial and capital transactions, payment services, loans, deposits, securities, investment and voluntary pension funds, insurance services and virtual currency transactions conducted under digital-asset legislation. Exemptions would also continue covering land transactions, land leases, certain real-estate transactions, residential leases, healthcare, education, social care, cultural and religious services, public broadcasting, gambling and certain non-profit sports activities.
The wording concerning postal services would be narrowed to explicitly cover universal postal services and related supplies provided by the designated public postal operator. The restriction preventing VAT exemption for sales of goods where the seller previously received only partial input VAT deduction would remain in place. Companies selling vehicles, machinery, property or other fixed assets would therefore need to review the original VAT treatment before determining whether the sale qualifies for exemption.
VAT refunds would continue to apply where deductible input VAT exceeds output VAT. Taxpayers could request payment or carry the balance forward as a tax credit. Refund deadlines would remain 45 days for ordinary taxpayers and 15 days for businesses primarily exporting goods. For exporters, the shorter refund period remains important because accumulated VAT on domestic purchases can affect working capital.
Transition rules affect 2026–2027 contracts
Advance payments made before the new rules enter into force would continue to follow existing VAT treatment, even where the related supply occurs after the new regime begins. Contracts extending across 2026 and 2027 would therefore need to address VAT treatment for advance payments, milestone invoices, retention payments, price adjustments and final acceptance certificates. The issue is particularly relevant for EPC contracts, construction projects, equipment deliveries, long-term services and real-estate developments where taxable events may occur across different regulatory periods.
Deregistration procedures started by 31 December 2026 would continue under existing rules. Late or amended returns related to December 2026 or the fourth quarter of 2026 would also remain under transitional rules. The Ministry of Finance would need to complete implementing regulations by 15 December 2026, leaving businesses and software providers limited time to adapt systems before the proposed 1 January 2027 implementation date.
