Business in Serbia

Exemption from VAT on the sale of goods intended for the personal needs of diplomatic agents, consular officials, staff members of international organizations, as well as the right of foreign nationals to refund VAT

LAW ON VALUE ADDED TAX (“Official Gazette of RS”, No. 84/2004, 86/2004 – amended, 61/2005, 61/2007, 93/2012, 108/2013, 6/2014 – harmonized, 68/2014 – other law, 142/2014, 5/2015 – harmonized, 83/2015, 5/2016 – harmonized, 108/2016, 7/2017 – harmonized, 113/2017, 13/2018 – harmonized, 30/2018, 4/2019 – harmonized, 72/2019, 8/2020 – harmonized and 153/2020)

Article 24, paragraph 1, item 4) and 16 and Article 56

If the diplomatic or consular mission or international organization does not decide to procure or import goods intended for their official or personal needs with tax exemption, they have the right to VAT refund under the prescribed conditions. Also, when the buyer – a foreign citizen purchases goods purchased in the Republic in luggage that he carries with him abroad, he can exercise the right to VAT refund, and the seller – VAT payer who performed VAT refund to the buyer is entitled to tax exemption with the right to deduct the previous tax on the basis of turnover made to a foreign citizen

“1. The provision of Article 24, paragraph 1, item 16) of the Law on Value Added Tax (“Official Gazette of the RS”, No. 84/2004, 86/2004 – amended and 61/2005 – hereinafter: the Law) prescribes tax exemption with the right to deduct the previous tax, ie. that VAT is not paid on goods and services intended for:

(1) the official needs of diplomatic and consular missions;

(2) the official needs of international organizations, if provided for in an international agreement;

(3) the personal needs of foreign staff of diplomatic and consular missions, including members of their families;

(4) the personal needs of foreign personnel of international organizations, including members of their families, if provided for in an international treaty.

Rulebook on the manner and procedure of exercising tax exemptions for VAT with the right and without the right to deduct previous tax (“Official Gazette of RS”, No. 124/2004, 140/2004, 27/2005, 54/2005 and 68/2005 – more: Rulebook) in part 1.8. Diplomatic and consular missions and international organizations, Article 17, item 2) prescribes that the tax exemption referred to in Article 24, paragraph 1, item 16) of the Law may be exercised by the taxpayer for the supply of goods and services performed for personal needs:

(1) diplomatic agents and members of their families living with them in a joint household, if they are not citizens of the Republic or do not have a permanent residence in the Republic,

(2) consular officials and members of their families living with them in a common household, if they are not citizens of the Republic or do not have a permanent residence in the Republic, with the exception of honorary consular officials and members of their families,

(3) members of the administrative and technical staff of diplomatic and consular missions, if they are not citizens of the Republic or have no residence in the Republic, with the exception of members of consular staff headed by honorary consular officers,

(4) consular officers, if they are not citizens of the Republic or do not have a permanent residence in the Republic, with the exception of consular officers in consulates headed by honorary consular officers,

(5) members of the staff of international organizations, ie representations of international organizations and members of their families, living with them in a common household, if they are not citizens of the Republic or do not reside in the Republic if such exemption is provided by an international agreement,

(6) members of the administrative and technical staff of international organizations, ie representations of international organizations if they are not citizens of the Republic or do not have a permanent residence in the Republic if such exemption is provided by an international agreement.

According to Article 19, paragraph 2 of this Ordinance, the taxpayer may obtain the tax exemption referred to in Article 19, paragraph 1 of the Ordinance if he has a photocopy of the basic certificate (certificate of reciprocity, ie a document confirming that the tax exemption is provided by an international agreement). foreign ministry), as well as the original order for the supply of goods and services and import of goods, excluding VAT, for the personal needs of the right holder, issued by an authorized person of the right holder referred to in Article 17, item 1) of this Rulebook, whose signature is deposited with Central.

Paragraph 2 of the same Article of the Ordinance stipulates that the order referred to in paragraph 1, item 2) of this Article shall be issued on the Form LNPDV – Order for procurement of goods and services and import of goods, excluding VAT, for personal needs of the right holder, which is an integral part of this regulations.

The order referred to in paragraph 1, item 2) of this Article shall be issued in three copies, two of which shall be given to the obligor, and the third shall be retained by the right holder referred to in Article 17, item 1) of this Rulebook for his needs (Article 19, paragraph 3 of the Rulebook).

Paragraph 4 of this Rulebook stipulates that the responsible representative of the right holder (head of mission, permanent representative, etc.) is obliged to submit to the Central Office by January 31 of the current year a list of persons entitled to procure goods and services without VAT with deposited signatures of these persons, as well as to submit a notice of change