Obligatory Electronic Invoicing in Serbia

In May 2021, the Law on Electronic Invoicing (“Law”) was enacted in Serbia. The Law introduces a new concept of electronic invoicing and regulates this matter in a significantly different manner than the previous legislative framework. Even though the Law was recently enacted, the Law was amended in December 2021 in order to prolong the deadlines for the implementation of the electronic invoicing system. This article sets forth the most important novelties which are important for Serbian entities.

Definition of the E-invoice

The Law defines an electronic invoice (“e-invoice”) as:

• a request for payment based on a transaction (with or without a remuneration);
• any other document that affects the payment or the amount to be paid (eg debit notes, credit notes, etc); or
• an invoice issued for an advance payment.

In accordance with the Law, an e-invoice shall be issued in XML format and further processed through the electronic invoicing system (ie sent to and received by the recipient, edited and stored).

Electronic Invoicing System

The Law introduces for the first time (i) an electronic invoicing system (in Serbian: sistem elektronskih faktura) which is an IT interface managed by the central information intermediary (in Serbian: centralni informacioni posrednik) of the Serbian Ministry of Finance and (ii) informative intermediaries (in Serbian: informacioni posrednici), licensed providers for electronic invoicing services which can be engaged by entities in order to issue and further process the e-invoices on their behalf.

With respect to electronic invoices which are issued by foreign entities in accordance with the European electronic invoicing standard, the Law stipulates that (i) private sector entities shall receive such invoices through their respective informative intermediaries (which makes the appointment of the informative intermediary necessary for private sector entities doing cross-border business) and (ii) public sector entities can receive such invoices either through their respective informative intermediary or directly through the electronic invoicing system.

Entities that are obligated to issue E-invoices

The following Serbian entities are obliged to issue e-invoices:

• private sector entities which are VAT taxpayers in Serbia;
• Serbian tax proxies of foreign entities; and
• public sector entities, ie state level entities (eg the Republic of Serbia, government, governmental bodies, autonomous provinces, social security public institutions, etc) and public companies (ie public utility companies and similar entities).

There is no obligation to issue an e-invoice in case of:

• retail trade carried out and respective payments made in accordance with the Serbian Law on Fiscalisation;
• contractual obligations applicable to users of funds under international framework agreements; and
• procurement, modernisation and repair of weapons and military equipment as well as products and services associated therewith.

Deadlines for the implementation of E-invoicing

Deadlines for the implementation of e-invoicing depend on the type of entity which is obliged to issue e-invoices (public sector entities vs private sector entities) and can be divided into three phases.

• PHASE 1.
  Following 1 May 2022, e-invoices shall be issued in case of (i) invoices issued by public sector entities to other public sector entities and (ii) invoices issued by private sector entities to public sector entities.
• PHASE 2.
  Following 1 July 2022, e-invoices shall be issued in case of invoices issued by public sector entities to private sector entities.
• PHASE 3.
  Following 1 January 2023, e-invoices shall be issued in case of invoices issued by private sector entities to private sector entities

Obligation to record the calculation of the VAT

In addition, the Law also stipulates an obligation to record the calculation of the VAT through the electronic invoicing system as follows:

• following 1 May 2022 for public sector entities; and
• following 1 January 2023 for private sector entities.

Public list of users of the Electronic Invoicing System

In accordance with the Law, the Serbian Ministry of Finance shall issue a list of users of the electronic invoicing system (ie public sector entities, private sector entities and voluntary users of the electronic invoicing system). It is expected that such list will be published shortly before or after 1 May 2022.

Electronic invoicing and foreign entities

The Law stipulates the possibility to receive electronic invoices issued to Serbian entities in accordance with the European electronic invoicing standard by foreign entities. However, the current legislation does not stipulate an obligation for Serbian entities (both public and private sector entities) to issue e-invoices to foreign entities.

Penalties

Non-compliance with the obligations under the Law represents a misdemeanor, for which the non-compliant Serbian entity may be fined up to RSD 2,000,000 (approximately EUR 17,000), while the responsible person in the respective entity may be fined up to RSD 150,000 (approximately 1,200).

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