The Value Added Tax or VAT is an indirect, consumption tax assessed on the value added to goods and services. It applies to the production and distribution of goods and services.
If the annual turnover of a company is less than 8 million dinars the company does not have to charge VAT on its sales. These companies can request registering for VAT voluntarily.
VAT in Serbia regulation is aligned with EU VAT Directive with special tax administration and huge analytics. These files and tax supporting records must be kept for at least ten years.
-VAT – general 20%,
-VAT – special 10% (bread, milk, fruit, vegetables, oil, meat, medicines, fertilizers…)
The taxpayer shall not be eligible for a deduction of input tax on the following grounds:
1) Procurement, production, and import of motorcars, motorcycles, motorcycles with sidecars, tricycles, quadricycles, yachts, boats, and aircraft, facilities to accommodate these goods, spare parts, fuel and operating supplies intended for these, renting, maintenance, repair and other services related to the use of these transportation means, as well as goods and services that are associated with the use of facilities for the accommodation of such goods;
2) Taxpayer’s entertainment expenses;
3) Expenses for food and transportation of employees or other hired persons for the commute to work or from work;
Notwithstanding the provision of paragraph 1, item 1) of this Article, the taxpayer shall be eligible for a deduction of input tax if it is using the means of transport and other goods exclusively for the conduct of the following business:
1) Selling and renting of the mentioned means of transport and other goods;
2) Transporting people and goods or training drivers for the use of mentioned means of transport.
Representation costs referred to in paragraph 1, item 2) of this Article shall include expenses for catering services, gifts, other than gifts of small value, expenses for holidays, sports, entertainment, and other expenses incurred for the benefit of business partners, potential business partners, and representatives of business partners and other natural persons, provided that there is no legal obligation for such expenses.
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