VAT

CALCULATION AND COLLECTION OF VAT IN ALLOWED CUSTOM CLEARING PROCEDURES OR TREATMENT OF CUSTOM CLEARED GOODS

The subject of VAT is primarily trade in goods and services conducted by tax obligors in the Republic of Serbia as a part of their usual business activities. In addition, subject of VAT is also import of goods, i.e. placement of goods in custom clearance procedure applicable in the Republic of Serbia. Article 58 of the Law on Value Added Taxes prescribes application of custom-related regulations in import of goods if the Law on Value Added Taxes does not prescribe otherwise, and Article 59 of the Law on Value Added Taxes sets forth that calculation and collection of VAT in import of goods falls under competence of customs authority implementing the custom clearance procedure, if the Law on Value Added Taxes does not prescribe otherwise.

Therefore, in order to ensure proper application of regulations related to calculation and collection of VAT in import of goods, custom-related regulations and specific provisions of the Law on Value Added Taxes pertaining to import of goods are of utmost importance.

Pursuant to Article 7 of the Law on Value Added Taxes, import of goods subject to VAT is defined as any introduction of goods into customs territory of the Republic of Serbia. Customs territory of the Republic of Serbia, compliant with Article 3 of the Law on Customs, shall include land, territorial waters of the Republic of Serbia, as well as airspace above the Republic of Serbia. Customs territory is limited by a custom line which is identical to state border of the Republic of Serbia.

Pursuant to the above listed provisions of the Law on Value Added Taxes and Law on Customs, subject to taxation shall be any introduction of goods into customs territory of the Republic of Serbia, which is identical to the territory inside the state borders of the Republic of Serbia.

Although any introduction of goods into the customs territory of Serbia is subject to VAT, this does not mean that VAT is calculated and collected for all introductions of goods. Whether any introduction of goods into the customs territory of Serbia is subject to VAT depends on the type of custom clearance procedure and on the provisions contained in the Law on Value Added Taxes related to exemption from taxes for certain custom clearance procedure.

We can conclude that if we take into account identification principles, determination whether certain introduction of goods into customs territory of the Republic of Serbia is subject to VAT or not requires fulfilment of two degrees of identification:

1. it is introduction of goods into customs territory of the Republic of Serbia;
2. such introduction is subject to VAT, i.e. it is not exempted from VAT.

Tax exemptions pertaining to introduction of goods into customs territory of the Republic of Serbia are regulated by Article 26 of the Law on Value Added Taxes.

For the purposes of easier expression of text related to calculation and collection of VAT in introduction of goods into customs territory of the Republic of Serbia, wording „introduction of goods into customs territory of the Republic of Serbia“ hereinafter shall be referred to as „import of goods“.