VAT — PDV in Serbian — is a tax a business adds to its price and pays over to the state, while offsetting the tax paid on its purchases. Here is when registration becomes mandatory and what to watch.
The threshold: 8,000,000 dinars
The obligation to register for VAT arises when total turnover in any 12 consecutive months exceeds 8,000,000 dinars. The key point is that this is not a calendar year: it is any twelve months in a row, and the running total must be watched from day one. A company that starts operating in August counts its twelve months from August.
What counts towards turnover
Taxable supplies count — at the general and reduced rates, as well as zero-rated supplies. Exempt supplies with no right to deduct input tax do not, such as financial services and residential rent. Nor does the value of equipment and premises bought for the business.
Deadlines and the cost of missing them
The registration application is filed no later than the deadline for the first periodic return for the period in which the threshold was crossed. If that is not done, the tax is treated as owed from the date the threshold was actually crossed, not from the date of registration. On top of that, the right to deduct input tax on purchases made between crossing the threshold and registering is lost — the amount can be significant.
The rates
The general rate is 20%: that is most goods and services, including professional services, manufacturing, software, construction and most retail. The reduced rate is 10%: basic foodstuffs, medicines, daily newspapers and publications, hotel accommodation, utilities and public transport. The zero rate applies to exports of goods, international transport and a range of related services.
Returns and electronic invoices
Returns are filed monthly if twelve-month turnover exceeds 50,000,000 dinars and quarterly if it does not. In both cases the deadline is the 15th of the month following the tax period. New companies file monthly in their first year. Electronic invoices through the SEF system are mandatory in dealings with the public sector and between VAT payers; from April 2026 some transactions with individuals via corporate payment cards are added. The preliminary VAT return in SEF has been postponed to January 2027.
Voluntary registration
It is possible to register for VAT before reaching the threshold. The point is recovering input tax: if a company invests heavily in equipment, licences and premises, that is a noticeable saving. Registration also builds trust with corporate clients, who prefer VAT-registered suppliers. The downside is obligations: a voluntarily registered payer cannot deregister for two years, and returns and electronic invoices are added. Foreign companies act in Serbia for VAT purposes through a tax representative.