Guide
Entering the VAT system
We monitor your turnover, register you in the VAT system on time, and take over output VAT, input tax deduction, VAT records and returns.
Entering the VAT system means your company or sole trader becomes a value-added tax payer, so you add output VAT to your invoices while at the same time gaining the right to deduct the input VAT you paid to suppliers. VAT registration is mandatory once total turnover in the previous 12 months exceeds 8 million dinars, but you can also enter the system voluntarily if that suits you better. Entry changes how you operate: it introduces VAT records, regular returns and new deadlines, so the transition needs to be planned and carried out correctly. That way you avoid penalties while fully using your right to deduct input tax.
What you should know
- VAT registration is mandatory once total turnover in the previous 12 months exceeds 8 million dinars, regardless of whether you are a sole trader, a flat-rate trader or a company.
- You can also enter the VAT system voluntarily before crossing the threshold, which often pays off when you deal with customers who are VAT payers or have large input costs with VAT; with voluntary entry you commit to staying in the system for at least two years.
- After registration you charge output VAT at the prescribed rate on every taxable supply (the standard 20 percent, the reduced 10 percent) and show it on your invoices, which for supplies to other VAT payers are issued electronically via the Electronic Invoicing System (SEF, eFaktura).
- As a VAT payer you gain the right to deduct input VAT, the tax charged to you by suppliers, but only if you hold a valid invoice, use the purchase for taxable supplies and meet the other statutory conditions.
- You keep the prescribed VAT records (POPDV) and for each tax period file the PP PDV return electronically via the ePorezi portal; the tax period is a calendar month or a quarter, and the deadline to file and pay is 15 days after the end of the tax period.
- Entering the system also changes your pricing and contracts, since prices now include VAT; the Tax Administration is notified of the transition and the date you acquire VAT-payer status, and new recording and reporting obligations are taken on.
How we handle it
- 01 Turnover tracking and assessment We regularly monitor your turnover over the previous 12 months and warn you in good time when you approach the 8 million dinar threshold or when voluntary entry pays off.
- 02 Decision and strategy We decide together whether you enter the system mandatorily or voluntarily and explain how prices, contracts and your relationship with customers and suppliers change.
- 03 VAT registration We prepare and file the VAT registration application with the Tax Administration within the prescribed deadline and determine the date from which you become a VAT payer.
- 04 Setting up VAT records We establish the POPDV records, connect invoice issuing and receipt through SEF (eFaktura) and set up the calculation of output VAT and the deduction of input tax.
- 05 Regular VAT returns For each tax period we compile the POPDV and the PP PDV form and file the return electronically via ePorezi before the deadline, with a note on the amount to pay or to be refunded.
- 06 Controls and advice We check the conditions for deducting input VAT, follow changes in the regulations and advise you on tax risks and optimizing your operations within the VAT system.
Company formation
We register your company with APR and handle all tax and banking obligations.
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