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 VAT worries many entrepreneurs, most often out of a fear that they will have to raise prices by 20%. The truth is that this depends on who your customers are, and the system itself is predictable once you set it up. Below we clearly separate the VAT threshold (8 million) from the flat-rate limit (6 million), explain what changes in your invoices, records and deadlines, and how to use your right to deduct input tax, so you enter the system without unpleasant surprises.
What you should know
- VAT becomes mandatory once total turnover over any 12 consecutive months passes 8,000,000 dinars, whether you are a flat-rate trader, a sole trader on books or a d.o.o. You file the VAT registration form (EPPDV) electronically, within 5 days of crossing the threshold.
- 8 million (VAT) and 6 million (flat-rate) are two different thresholds. At 6 million you lose the right to flat-rate and move to books; you become a VAT payer only at 8 million. You can keep books and still not be in VAT.
- Whether you raise prices depends on your customers. If your customers are VAT payers, they deduct your VAT so it does not burden them. If you sell to final consumers, the VAT-inclusive price effectively rises, so plan your margins before you enter.
- You deduct the VAT you pay suppliers. As a payer you have the right to deduct input VAT with a valid invoice, and on entry a one-time right to deduct it on stock and equipment you hold on the entry date (with a stocktake).
- Returns and records go electronically. You issue invoices to other payers and the public sector via SEF (eFaktura), keep POPDV and file PP PDV. New payers file monthly in the entry year and the whole next year, and only after that quarterly if under 50 million.
- Deadlines and duties. The PP PDV return is filed and VAT paid within 15 days after the tax period ends. Voluntary entry commits you to at least 2 years in the system, so plan it ahead.
| Item | Value |
|---|---|
| Threshold for mandatory entry | Turnover over 8,000,000 RSD in any 12 consecutive months |
| Flat-rate vs VAT | Flat-rate up to 6,000,000 RSD, VAT from 8,000,000 RSD (different thresholds) |
| VAT registration (EPPDV) | Within 5 days of crossing the threshold |
| Standard VAT rate | 20% |
| Reduced VAT rate | 10% |
| Tax period | Month or quarter; new payers monthly for the first two years |
| Filing and payment deadline | 15 days after the tax period ends |
| Voluntary entry | Commitment to stay in the system at least 2 years |
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.
Frequently asked questions
When exactly do I have to register for VAT?
When your total turnover exceeds 8,000,000 dinars over any 12 consecutive months (a rolling window, not the calendar year). Once you cross it, you file the EPPDV registration form within 5 days.
Is the paušal limit the same as the VAT threshold?
No. The flat-rate (paušal) limit is 6,000,000 dinars, while the VAT threshold is 8,000,000 dinars. You can lose flat-rate status at 6M and still not be a VAT payer until you reach 8M.
Do I have to raise my prices by 20% once I'm in VAT?
It depends on your customers. If they are VAT payers, they deduct your VAT so it doesn't burden them. If you sell to final consumers, your price effectively includes the VAT, so plan your margins before you enter.
How often do I file VAT returns, and when?
New VAT payers file monthly for the entry year and the whole following year; afterwards quarterly if turnover stays under 50,000,000 dinars. The return is filed and VAT paid within 15 days after the period ends.
Can I get out of the VAT system later?
If you entered voluntarily you must stay at least 2 years. Otherwise, you can request deregistration once your turnover falls below 8,000,000 dinars and the conditions are met.
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