Tax Representative of a Foreign Entity for VAT Purposes
A foreign entity that supplies goods or services in the territory of the Republic of Serbia is generally required to appoint a tax representative for VAT purposes. Exceptions apply to certain types of services, including certain electronically supplied services and specific passenger transport services.
A tax representative may be an individual, entrepreneur, or legal entity domiciled or registered in Serbia, provided that it has been registered as a VAT taxpayer for at least 12 months and has no due and unpaid public revenue obligations. However, a power of attorney granted by the foreign entity alone is not sufficient to establish the status of a tax representative. The tax representation must be approved by a decision of the Tax Administration based on the relevant application and supporting documentation.
A foreign entity may appoint only one tax representative, and a permanent establishment of that foreign entity cannot act as its tax representative. From the date on which the tax representation becomes effective, the representative exercises the rights and fulfils the obligations prescribed by the VAT Law on behalf and for the account of the foreign entity. The tax representative is jointly and severally liable for the foreign entity’s VAT obligations.
If a foreign entity has not appointed a tax representative, or if the representation has not been approved by the Tax Administration, the recipient of the goods or services generally becomes the taxpayer responsible for VAT on the relevant transaction. In certain cases, where the consideration is collected through a Serbian VAT taxpayer, that taxpayer may be considered the person liable for VAT.
Subject to the statutory requirements, a foreign entity may also register for VAT purposes without appointing a tax representative; however, such registration is not mandatory. If the foreign entity is not registered for VAT and has no tax representative, the applicable rules determine another party as the person liable for VAT.
When dealing with a foreign entity, the recipient of goods or services is advised to verify the foreign entity’s VAT status and the status of its tax representative in the relevant register published by the Poreska uprava Republike Srbije. This is particularly important because the approval of a tax representative or the VAT registration of a foreign entity may take effect from a date earlier than the date on which the relevant decision is issued. Therefore, in certain cases, a subsequent check of the register may also be necessary.
If the recipient initially accounts for VAT as the person liable for VAT and it is subsequently established that the foreign entity is actually the person liable for VAT, the recipient must submit an amended VAT return for the relevant tax period.
It is particularly important to note that the tax representative is jointly and severally liable for the foreign entity’s VAT obligations from the date on which the tax representation becomes effective under the decision of the Tax Administration.
