Serbia VAT Law Amendments: Key Changes from 2026

The Parliament of the Republic of Serbia adopted amendments to the VAT Law that came into effect on December 12. However, the amended rules will generally apply from April 1, 2026, except for provisions expressly designated to apply earlier or later, either on January 1, 2026, or January 1, 2027.

Key Amendments to the VAT Law

Firstly, the introduction of the preliminary VAT return has been postponed by one year. As a result of this decision, this obligation will first apply to the tax period of January 2027, or, for quarterly taxable persons, to the period from January to March 2027. 

Additionally, the amendments introduce greater flexibility to correct past errors, allowing taxable persons to report under-declared output VAT and over-claimed input VAT from previous tax periods directly in their current VAT return. This measure, which simplifies administrative requirements for taxable persons, will take effect on January 1, 2027.

The amendments also expand the scope of persons regarded as VAT debtors by expressly including those who state VAT on an internal invoice without a legal obligation, as well as the recipient of investment gold in transactions involving the supply of investment gold between two VAT-registered taxable persons. 

Furthermore, the rules governing input VAT deduction are also refined. Therefore, in situations where the VAT debtor is the recipient of goods or services, the right to deduct input VAT for a given tax period may be exercised only if the internal invoice is prepared by the day preceding the submission of the VAT return for that period, and at the latest by the 10th day of the following calendar month.

Additionally, the amendments confirm that taxable persons retain the right to deduct input VAT within a five-year limitation period, calculated from the end of the year in which the obligation to calculate that VAT arose, providing long-term certainty while reinforcing compliance discipline.

Other amendments include those relating to the issuance of periodic invoices for the supply of water, electricity, natural gas, and energy for heating or cooling for final consumption, the correction of input VAT in case of a change of tax base, the preparation of an internal invoice, and the cancellation of invoices and internal invoices.

Conclusion

The amended VAT rules, coming into force between January 1, 2026, and January 1, 2027, reflect a careful balance between enhancing compliance and providing practical flexibility for taxable persons. By postponing certain obligations, simplifying error corrections, and clarifying the scope of VAT debtors and input VAT rights, the changes aim to reduce administrative burdens while maintaining fiscal control.

Source: KPMG