VAT Guide for Freelancers in Serbia

Regardless of where you're based, you must deal with Serbian VAT rules if you have clients in Serbia. VAT, or Value Added Tax, is a consumption tax levied on almost all goods and services. While you may already know that, you might be unaware of the specific rules in Serbia surrounding your product, which you should follow if you wish to stay tax compliant.

If you are a freelancer in Serbia looking for more information on Serbian VAT laws, you're in the right place. We at Xolo created this guide to help you through the process and answer all your VAT-related queries! We also offer a range of VAT-related services if you still find yourself confused. Start scrolling!

What are the VAT Rates in Serbia?

The Serbian government levies three different VAT rates, and freelancers must charge the appropriate amount based on the products and services they supply.

  • Standard VAT rate of 20% – applies to the supply of almost all goods and services, unless they fall under the reduced or zero rate categories or are VAT-exempt.
  • Reduced VAT rate of 10% – applied on certain goods and services such as the sale of certain food products, public transportation services, medicines, medical care devices, utilities, daily newspapers, etc.
  • Zero-rate – 0% VAT is applicable on different exports and goods and services related to aeroplanes and ships used in international traffic. Although there are no charges on zero rates, you should record sales of goods and services and create a report based on your returns.

VAT Exempt Goods and Services
Here is a list of products and services that are exempt from paying VAT:

  • Insurance Services - Insurance and reinsurance
  • Financial Services - Trading in shares and securities
  • Rent of flats used for housing 
  • Land and properties
  • Postal Services
  • Supply of goods whereby the buyer did not have the right to deduct input tax 
  • Religious Services
  • Education Services
  • Sale of publications and printing
  • Public broadcasting related services

VAT Registration and Returns in Serbia

How to register for VAT in Serbia? 

Serbia does not have a VAT registration threshold, which means that you need to register for VAT even if you make a single sale in Serbia. You are required to submit the EVPPDV VAT registration form to the tax authorities electronically via the tax authorities portal, no later than the end of the first period for submitting a VAT return. After this, the tax authorities will issue you a certificate of VAT registration. You will also receive a VAT registration number, which links your freelancing services to the Serbia tax system. This number can be used to track the taxes you pay, the tax credits you receive, plus the tax you charge your customers.

The  VAT amount you must pay is derived after subtracting the VAT you charged your customers from the VAT you paid on purchasing materials required for your goods or services. If the VAT you paid for your materials is more than what you charged your customers, the difference can serve as a VAT credit and be carried forward or be refunded to you.

You can check the Serbian tax authority website for more information. 

Alternatively, you can hire an accountant or agency to handle your VAT returns and dealings with the Romanian Fiscal Department. Xolo provides services like Xolo Go and Xolo Leap, which help with precisely this and any other VAT concerns you may have. But more on that later.

Financial obligations of VAT-registered freelancers in Serbia 

What next? Registering for VAT is just one part of the process. After registration, you must:

  • Issue a VAT Invoice (electronic invoicing is optional) for each of your VAT-taxable transactions
  • Maintain records of the invoices/transactions received and issued
  • File your VAT returns monthly if your annual turnover is less than RSD 50 million, or quarterly if your annual turnover exceeds RSD 50 million
  • File your VAT returns and make your VAT payments within 15 days after the expiration of the tax period. The VAT returns are required to be filed electronically.

If your annual turnover is less than RSD 50 million, you may choose to report and pay VAT after you have received the full payment of your goods and services supplied.

Getting overwhelmed? Xolo’s got your back! We automatically generate, send, and store all your invoices for you, so you won’t have to worry about missing any steps or misplacing any documents ;)

VAT Penalties in Serbia

  • In case of late VAT return filing and payment, you may be charged a penalty of RSD 50,000.
  • If you make an error in determining tax liability or miss out on any important details, you have to file an amended tax return free of any such error. You are allowed to file this amended tax return only twice.
  • VAT reporting with incorrect details will be accountable to a penalty of 30% of the difference between the unreported/incorrectly reported VAT amount and the correct VAT amount. This penalty amount typically lies between RSD 10,000 to RSD 100,000.
  • Any fraudulent activity can result in imprisonment.

VAT for Expat Freelancers in Serbia

If you are an expat freelancer in Serbia, you are required to register for VAT through a local tax representative. There is no registration threshold applicable. 

You may receive returns on the VAT you paid if you do not supply any goods or services in Serbia. In this case, you must submit an annual refund request before 30th June for the purchases made in the previous year. 

If you’re still confused, Xolo can help you register as a freelancer in Serbia and handle all the necessary dealings on your behalf. With Xolo Go, you can use a slice of our company as a legal framework to invoice your clients whether they're in Serbia or beyond.

How Xolo Can Help?

The tax registration process can be tricky at times, but we hope this guide has helped clear your doubts! If you’re still overwhelmed by the different schemes and numbers, and paperwork, Xolo offers a range of solutions that handle all the hassle while you focus on your core competencies. 

Xolo Leap is the easiest and most effective way to create your own company through Estonian e-Residency! Reduce time spent on mundane business administration and focus on what you do best!

  • We offer different tiers of service depending on the solopreneur’s, or as we call them, Xolopreneur's, individual needs.
  • Once you get your business set up, you can run it from anywhere in the world! So whether you’re looking to gain access to the EU market or a digital nomad - this is the place for you! 

With Xolo Go, you can easily freelance and invoice your clients, even without a registered company or LLC. 

  • Signing up takes only 10 minutes, and once you do, taxation, corporate compliance, and all the tricky VAT calculations are all automatically taken care of in the background!
  • We charge a flat rate of 5% from every withdrawal to your personal bank account. No surprise fees, no contracts, and no BS.

 

Simply put, we do the hefty work for you so that you can enjoy the freedom of freelancing. So connect with us immediately, and we’ll help you get your one-person business up and running in Serbia in no time!