Although the existing legislative framework in the Republic of Serbia has been providing for electronic invoicing for some time now, which was undeniably confirmed by the joint explanation of the Ministry of Finance and Ministry of Trade, Tourism and Telecommunications of 12 December 2017, the National Assembly of the Republic of Serbia has recently enacted the Law on Electronic Invoicing (“the Law”) that regulates this matter in a significantly different manner.

The law came into force on 7 May 2021, however, due to immense changes it imposes on the current operation of business entities, its application has been delayed, as we will elaborate below.

Subject of regulation

The law regulates issuance, sending, receipt, processing, storage, content, and elements of electronic invoices in transactions between the entities in the public and private sector.

As a major novelty, the law introduces electronic invoice (e-invoice) as a digital, dematerialised version of the invoice which is transferred from issuer to recipient through software.

Categories of payers

Electronic invoicing is envisaged between the entities from the private and public sector, between two entities in the private sector, between two entities in the public sector, as well as VAT representatives of foreign entities in the Republic of Serbia.

Private sector entity implies only VAT payer, whereas lump-sum taxpayers and corporate taxpayers can be voluntary users of electronic invoicing system.

A significant novelty compared to previous interpretations of electronic invoicing is the so-called electronic invoicing system which is an IT solution managed by the central information mediator as a unit within the Ministry of Finance, which mediates in sending, receipt, registration, processing, and storage of electronic invoices.

Three cases are an exception to the obligation of issuing e-invoices:

• For advance payment/retail in accordance with the law regulating fiscalisation
• For contractual obligation applying to beneficiaries of funds under international framework agreements;
• For purchase, modernisation, and repair of military equipment, purchase of security-sensitive equipment, as well as related procurements.

Legal differences between the entities in the private and public sector in view of e-invoice

I             Different treatment of recipients of e-invoice

• If the recipient of an e-invoice which is a public sector entity does not accept or reject e-invoice issued by the issuer of e-invoice, directly or through an information mediator, the e-invoice shall be considered accepted upon the expiry of 15 days after the day of receipt.

• If the recipient of an e-invoice which is a private sector entity does not accept or reject the issued invoice, directly or through an information mediator, the recipient will be re-informed that the e-invoice has been issued upon the expiry of 15 days after the day of receipt of e-invoice.

If a private sector entity, as an e-invoice recipient, does not accept or reject the e-invoice within 5 days after being re-informed about the e-invoice issuance, the e-invoice will be considered rejected upon the expiry of such period.

II            Differences in the prescribed storage duration

• E-invoice issued or received by a public sector entity shall be permanently stored in the e-invoice system.
• E-invoice issued or received by a private sector entity shall be stored for a period of 10 years after the expiry of the year of its issuance.

Start of application

Transfer to electronic invoicing will be realised in stages, gradually during one year starting from 1 January 2022 to 1 January 2023, namely:

• The obligation for a public sector entity to receive and keep e-invoice as well as the obligation to issue e-invoices to other public sector entities shall be applied from 1 January 2022.
• The obligation for a public sector entity to issue an e-invoice to a private sector entity shall be applied from 1 July 2022.
• The obligation for a public sector entity to electronically register VAT shall be applied from 1 January 2022.
• The obligation for a private sector entity to issue an e-invoice to a public sector entity shall be applied from 1 January 2022.
• The obligation for a private sector entity to receive and keep e-invoice issued by a public sector entity, as well as invoices issued by private sector entity shall be applied from 1 July 2022.
• The obligation to issue and store e-invoices in transactions between private sector entities shall be applied from 1 January 2023.
• The obligation for electronic registration of VAT, except for transactions where one party is a public sector entity, shall be applied from 1 January 2023.

Penalty provisions

For misdemeanours prescribed by the law, a legal entity shall be fined with RSD 200,000.00 to 2,000,000.00, a responsible person in a legal entity shall be fined with RSD 50,000.00 to 150,000.00. and an entrepreneur shall be fined with RSD 50,000.00 to 500,000.00.

This article is to be considered as exclusively informative, with no intention to provide legal advice. If you should need additional information, please contact us directly.