Ministry of Finance Comments on the registration of foreign entities for VAT Registration in an option, but not obligatory for foreign entities
On 23 May 2016 the Ministry of Finance issued Comments no. 011-00-1180/2015-04 on the tax representative of a foreign entity for the purpose of complying with the Law on Value Added Tax and the foreign entity’s registration for payment of VAT liability.
a specific entity (the VAT taxpayer) can acquire the status of a tax representative according to article 10a of the Law exclusively based on the decision issued by the Tax Authority (and not just based on the authorization issued by the foreign entity), which means that foreign entity cannot become a VAT taxpayer if all the conditions for its registration for the liability of VAT payment have not been met; all the obligations and all the rights specified by the Law in the name and on behalf of the foreign entity are held by the tax representative;
for the supply performed by a foreign entity in the Republic of Serbia the tax debtor is the recipient of goods or services if the foreign entity has not designated a tax representative in the sense that it did not grant a power of attorney to any VAT taxpayer with which it authorizes such taxpayer to perform all the tasks required by Law, or that the foreign entity had granted the power of attorney, but that the tax representative had not filed an application for approval of tax representation to the Headquarters of the Tax Authority, or the approval procedure for tax representation is pending, or the application for tax representation has been denied.
Besides this, we note that the foreign entity performing the supply of goods and services in the Republic of Serbia shall not be subject to any sanction for not granting a power of attorney which authorizes a specific entity for performing all the tasks required by Law, and therefore for not registering for the liability of VAT payment. In the event that a foreign entity is not registered for the liability of VAT payment, the Law specifies that the counterparty entity has the status of the tax debtor.”
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