Business News, September 2021

NEW FISCALIZATION ACT

WHO MUST HAVE A FISCAL CASH REGISTER

The new fiscalization model introduces a broader scope of entities that must conform with the fiscalization requirements, plus launches an entirely novel technical solutions compared to the current model.

To support the new Fiscalization Act, the government enacted a series of bylaws which bring new rules regarding fiscal devices, fiscal receipts, use of the security element, and the preparations for the shift to the new model of fiscalization and the inclusion of new taxpayers therein.

Furthermore, the new Decree Defining the Professions Which Are Not Required to Record Their Retail Sales Using a Fiscal Device allows for a much smaller number of exceptions from the obligation to record retail transactions in relation to the current status.

A fiscal cash register is mandatory for all small trading companies and sole traders, proprietors of sole traders operating through a kiosk and similar businesses (newsagent’s), sole proprietorships and hospitality and catering establishments paying lump sum tax, as well as other taxpayers engaged in the retail sale of products or services to individual customers.

WHO IS EXEMPT FROM HAVING TO USE A FISCAL CASH REGISTER

Fiscal cash register is not a requirement for the following types of taxpayers and business activities:

Sale of passenger tickets for road, railway and air travel;
Transport of merchandise by road;
Taxi transfers;
Services offered by banks and other financial organisations, insurance and reinsurance, postal services;
Tour operators and travel agencies;
Religious organisations;
Health institutions charging copayments to insured persons for their services;
Lawyer services;
Persons selling icecream, popcorn, lottery tickets and newspapers (newsboys) on the street;
Sale of products through printed and electronic media involving cash-on-delivery orders;
Shoeshiners and porters;
Goods sold via vending machines.

WHERE TO OBTAIN INFORMATION ABOUT FISCALIZATION AND FISCAL CASH REGISTERS

Taxpayers are encouraged to seek all the necessary information about fiscalization, licenced manufacturers, authorized service centers etc, as well as the time frame for implementing fiscal cash registers and recording sales transactions at a local branch and/or organisational unit of the Tax Administration.

There is a time slot between 15th October 2021 and 31st January 2022 for taxpayers to apply for a government subsidy to help them buy a novel device designed to be used as an instrument in the new fiscalization practice. Such persons will receive 100 euros from the government per device and business location. Taxpayers can count on 200 euros in government grants, with the amount multiplied by the number of individual retail stores.

Although the new fiscalization model was intended to kick off on 1st January 2022, it was nevertheless amended to include a transitional period in which the old and new systems coexist side by side, allowing the taxpayers to get accustomed. This transition to e-fiscalization will last from 1st November 2021 to 30th April 2022.

Anyone interested in receiving a grant from the Government of the Republic of Serbia consisting of 100 euros per fiscal device and store should apply between 15th October 2021 and 31st January 2022 on the website of the Tax Administration. By failing to do so, the company forfeits its right to a government grant related to fiscalization.

Entities which are not registered for VAT will receive a 20% higher subsidy to install a fiscal cash register, due to their inability to use input VAT, as a means of reimbursement for the anticipated expenses.

The money will be paid directly to each taxpayer to cover for the expenses of securing the necessary device. There will be no additional expenses for business entities implementing the system.

All those who report the locations of their business units will after 1st November 2021 receive in their tax mailbox on the ePorezi portal an electronic invitation to apply for security elements that will be provided by the Tax Authority free of charge.

The Tax Authority has published the Technical Guide Outlining the Conditions and Characteristics of the Elements of the Electronic Fiscal Device For the Purpose of Being Approved For Use In the e-Fiscalization System.

This guide comprises a glossary of terms, a section on electronic fiscal devices (EFD), with subsections detailing the security element, processing unit of fiscal receipts and electronic system used for issuing receipts, as well as a section on fiscal receipts, their content and types.

The guide can be downloaded from the website of the Tax Authority at the following link: https://www.purs.gov.rs/sr/fiskalne-kase/pregled-propisa/tehnicki-vodic/7162/tehnicki-vodic-sa-uslovima-i-karakteristikama- elemenata-elektronskog-fiskalnog-uredjaja-radi-odobravanja-za-upotrebu-u-sistemu-e-fiskalizacije.html.

TIME LIMIT TO CONTRACT AUDITING WORK

A shareholders’ assembly and/or another body named in a general act of the entity undergoing an audit shall select an auditing company to review its financial statements for Fiscal Year 2021 no later than 30th September 2021.

If the entity’s financial year differs from the calendar one, a shareholders’ assembly and/or another body specified in the general act of the company shall choose an auditing firm at least three months before the expiry of the established financial year to which the audit refers. For example, if regular annual financial statements are made as at 31st October 2021, the final deadline to choose a contractor to perform the audit is 31st July 2021.

Newly formed entities are incapable of complying with the requirement indicated in Paragraph 1 of Article 32 of the Auditing Act (i.e. they cannot hire an auditing company by 30th September 2021), because they cannot assess the size of the company (i.e. determine whether it is a micro, small, middle-sized or large legal entity) before the end of 2021. The law provides for an extension of the deadline to choose the right supplier to audit consolidated financial statements until 30th November 2021.

PRACTICAL APPLICATION OF ELECTRONIC INVOICES

COMMENCEMENT DATES OF THE ELECTRONIC INVOICING ACT

Here are the commencement dates for the various requirements outlined in the Electronic Invoicing Act:

1st January 2022 – a public enterprise must receive and store electronic invoices;
1st January 2022 – a public enterprise must issue electronic invoices to another public enterprise;
1st July 2022 – a public enterprise must issue an electronic invoice to a private company;
1st January 2022 – a public enterprise must electronically record its value added tax calculations;
1st January 2022 – a private enterprise must issue electronic invoices to a public enterprise;
1st July 2022 – a private company must receive and store electronic invoices issued by a public enterprise, as well as the electronic invoices issued by a private company;
1st January 2023 – electronic invoices must be issued and stored for transactions between two private companies;
1st January 2023 – electronic record-keeping of VAT, save from the transactions in which one of the parties is a public enterprise.

It is worth noting that according to Article 23 of the Electronic Invoicing Act, as of 31st December 2021 the following provisions of the Deadlines to Settle Monetary Liabilities in Commercial Trasactions Act („The Official Journal of the Republic of Serbia“, issue 119/2012, 68/2015, 113/2017 and 91/2019) are rendered invalid with respect to the following:

Central Registry of Invoices – To be erased – Item 9 of Article 2 of the Act;
Manner and/or process of registering invoices in the Central Registry of Invoices – Article 4a of the Act;
Manner and/or process of settling the invoices previously registered in the Central Registry of Invoices – Article 4b of the Act;
Penal provisions for the registration and payment of invoices in the Central Registry of Invoices– Paragraphs 6 and 7 of Article 12 of the Act;
Manner and/or process of registering electronic invoices in which public entities are debtors – Article 4v of the Act;
Process of accepting and settling an electronic invoice – Article 4g of the Act.

RECORD-KEEPING AND REPORTING ON WASTE STREAMS

The Government of the Republic of Serbia passed the Decree amending the Decree on the products which become specific waste streams, the form used for day-to-day record-keeping of the quantity and type of produced and imported products and on the annual report, manner and deadlines for filing the annual report, on the entities required to pay the fee, the criteria for the calculation, amount and method of computing and paying the fee („The Official Journal of the Republic of Serbia“, issue 77/21, hereinafter: the Amending Decree).

The Amending Decree came into force on 7th August 2021.

The key change outlined in the Amending Decree is the removal of the obligation to file the annual report in paper

form beginning with the report for Fiscal Year 2021. Monthly reporting obligation remains in place.

The annual report shall be submitted to the Environmental Protection Agency (hereinafter: the Agency) electronically, by entering data into the information system of the National Registry of Pollution Sources, in line with the regulations governing electronic documents, electronic identification and confidential services in electronic transactions, by 31st March of the current year using data from the previous year.

If the reporting entity did not import and/or manufacture products that become specific waste streams during the year for which data is being supplied, they need to send a statement to that effect to the Agency.

This statement, provided it has been signed with a qualified electronic signature of an authorized person or their authorised representative, should be delivered as an electronic (PDF) document to the appropriate electronic mail address published on the web portal of the Agency until 31st March of the current year for the previous year.

THE EFFECTIVENESS AND APPLICATION OF THE DOUBLE TAXATION AGREEMENT WITH SINGAPORE

The Convention for the Avoidance of Double Taxation Between the Government of the Republic of Serbia and the Government of the Republic of Singapore (hereinafter: Singapore) for the Avoidance of Double Taxation with Respect to Taxes on Income and for the Prevention of Tax Evasion and Tax Avoidance (hereinafter: the Convention) came into effect on 16th August 2021.

The Convention shall be applicable in the Republic of Serbia:

With respect to taxes on income realised in each tax year starting on or after 1st January 2022;
In relation to Article 25 (Exchange of notices) of the Convention, for the requests filed on or after 16th August 2021 with respect to the notification relating to tax periods beginning on or after 1st January 2022; or if there is no tax period, for all tax liabilities incurred on or after 1st January 2022.