Tax Alert - November 2020 - Amendments to the VAT Law
The Parliament adopted amendments to the VAT Law that entered into force on November 9, 2020
The amendments to the VAT Law provide certain incentives for the taxpayers in times where business operation is hampered due to the health crises caused by COVID 19. The amendments provide incentives upon certain donations, broaden the list of supplies subject to the preferential VAT rate, introduce a possibility in the VAT return to settle obligations of another taxpayer and prescribe easier issuance of electronic invoices. Also, the deadline for payment of VAT is extended.
1. VAT exempt supplies
The VAT exemption on supplies of goods and services that are donated to a budget user for coping with the COVID-19 crisis is extended. The same applies for supplies which are paid by donated money to budget users for coping with COVID-19. The right of tax exemption is conditioned by certain administrative obligations and issuance of documents.
This VAT exemption will apply until 31 December, 2021.
2. Preferential VAT rate
As of 1 January 2021, the preferential VAT rate of 5% will be applicable on craftsman services performed by suppliers registered in the Craft Register in accordance with the Law on Craft, as follows:
(a) repair of bicycles, shoes and leather goods, apparel and household linen (including patching and tailoring) and
(b) hairdressing services.
From 1 January 2021, new preferential tax rate of 10% will apply to restaurant services and on-site catering services, excluding alcoholic beverages.
3. Extension of the deadline for VAT payment
The deadline for payment of the tax is extended for additional 5 days, which means that VAT should be paid no later than 30 days after the end of the relevant VAT period.
This extended deadline will be applicable until 31 December, 2021.
4. Using VAT claim to settle tax liability of another taxpayer
As of 1 January 2021, there is a possibility for the taxpayer to use its VAT claim to settle the tax liability of another taxpayer by way of a request made in the VAT return. In case the amount claimed is higher than the amount used for settling the tax liabilities of the other taxpayer, the remainder will be paid out to the requestor.
The request could be made in the VAT return as long as the taxpayer has settled all other taxes and public duties.
5. Amendment of the provisions for electronic invoice
Any invoice that is electronically submitted to the recipient, is in an electronic form (pdf or other electronic format) and contains all the elements prescribed by the VAT Law, will be deemed as electronic invoice.
The supplier is obliged to inform the recipient about the electronic manner of submitting invoices. If the recipient does not accept this type of delivery of the invoices, the recipient is obliged to notify the supplier within 10 days after receiving the notification. Otherwise, the supplier will consider that the recipient has consented.
The recipient has the right to deduct the input VAT charged on these electronic invoices.
Electronic invoices can be issued in this manner until 31 December, 2021.
How can we help you?
1. Advice on the application of the new provisions of the VAT Law;
2. Advice on legal aspects of implementation of e-invoicing system using a digital certificate, according to your needs;
3. Assistance and advice on various issues related to the introduction of electronic invoices.
