Serbia Introduces Targeted VAT Reforms Effective From 2026
Serbia has adopted a new package of VAT amendments that will reshape several core compliance and reporting rules from 2026 onward, while deferring some of the more far-reaching obligations until 2027. The changes were enacted by Parliament in December 2025 and published in the Official Gazette, providing businesses with greater clarity on the transitional roadmap for VAT administration.
Unless specific transitional dates apply, the revised VAT framework will take effect from 1 April 2026.
Deferral of the Pre-filed VAT Return
One of the most anticipated reforms—the introduction of a pre-filed VAT return—has been formally postponed. Rather than applying in 2026, the obligation will now commence with the January 2027 tax period. This deferral gives both taxpayers and the tax administration additional time to adapt systems and processes before the new reporting layer becomes operational.
Correcting Historic Errors Through Current Returns
From 1 January 2027, Serbian VAT taxpayers will be permitted to correct certain historical errors directly within their current VAT return. Under the new approach, previously under-declared output VAT or overstated input VAT from earlier periods may be disclosed without the need to file an amended return.
Once included in the current return, the error will be treated as corrected, removing the administrative burden traditionally associated with reopening closed tax periods.
Timing of Supplies for Periodic Utility Invoicing
For utilities supplied on a periodic basis—such as water, electricity, gas, and heating or cooling energy—the amendments clarify when the taxable supply is deemed to occur. Where invoices are issued for defined consumption periods, the supply will be regarded as taking place on the final day of the invoicing period.
This clarification applies from 1 January 2026 and provides greater certainty around tax point determination for suppliers and consumers alike.
Adjustments to the VAT Tax Base
The revised law introduces more structured rules for situations where the VAT tax base is reduced after an invoice has been issued. In such cases, suppliers acting as the VAT debtor will be required to issue a credit note, and the adjustment must be reflected in the VAT period in which the change arises.
A reduction in output VAT will only be permitted if the prescribed conditions are satisfied before submission of the relevant VAT return, and no later than the 10th day of the following calendar month.
Input VAT Deduction Rules Refined
Where the VAT liability rests with the recipient—most notably under reverse charge scenarios—the right to deduct input VAT will depend on timely preparation of an internal invoice. To secure deduction in a given tax period, the internal invoice must be prepared before the VAT return is submitted and within the statutory monthly deadline.
In addition, the law introduces a five-year limitation period for exercising the right to deduct input VAT, calculated from the end of the year in which the VAT liability arose.
Internal Invoicing and Electronic Systems
The amendments consolidate and expand the rules governing internal invoices. Recipients must prepare internal invoices not only for supplies subject to reverse charge, but also for advances, and for subsequent increases or decreases in the tax base.
Notably, taxpayers using Serbia’s electronic invoicing platform are now required to generate internal invoices directly within that system, reinforcing the central role of digital reporting in VAT compliance.
New Rules on Invoice Cancellations
Where an issued invoice showing VAT is cancelled, the supplier may reduce the tax base—and potentially the VAT due—for the same tax period, provided strict conditions are met within the statutory deadlines. These include issuing a replacement invoice where required and obtaining confirmation from the recipient that the VAT has not been claimed as input tax or used in a refund request.
Equivalent principles apply to cancelled internal invoices. VAT declared on an internal invoice remains payable unless the cancellation and corresponding corrections are completed within the prescribed timeframe, including adjustment of any input VAT previously claimed.
