Serbia Passes VAT Law Amendments Effective 2026: Key Changes for Taxpayers and Invoicing

Serbia has adopted a major package of amendments to its Value Added Tax (VAT) Law, introducing significant changes that affect invoicing obligations, corrections, tax base adjustments, time‑of‑supply rules, and VAT deduction procedures. These changes were adopted on 3 December 2025 and largely apply from 1 April 2026, with some measures deferred to 2027. [assets.kpmg.com], [vatcalc.com]

1. New Invoicing Rules

1.1 Mandatory Electronic Invoicing (SEF) for Internal Documents

Serbia is strengthening its digital VAT controls by requiring the use of the SEF (electronic invoicing system) for:

• Internal invoices
• Self‑billing situations
• Tax base adjustments
• Advance payments

This requirement applies to all SEF system users and forms part of the broader shift toward real‑time VAT visibility. [vatcalc.com]

1.2 Periodic Invoices – Time of Supply

For periodic invoices related to utilities (water, electricity, natural gas, heating/cooling), the supply is deemed performed on the last day of the invoicing period, which may not exceed one year.
Effective 1 January 2026. [assets.kpmg.com], [vatupdate.com]

2. Adjustments and Corrections

2.1 Credit Notes for Decreases in Tax Base

Suppliers must issue a credit note for any subsequent decrease in the tax base. The corresponding reduction in calculated VAT is allowed in the VAT period in which the change occurred, provided conditions are fulfilled by the day before the tax return submission deadline, and no later than the 10th day of the following month.
[assets.kpmg.com], [vatupdate.com]

2.2 Increase in Tax Base

Where the tax base increases, the supplier (as the VAT debtor) must issue a document reflecting the increase. Similar timing rules apply for reporting adjustments. [pwc.rs]

2.3 Error Corrections Without Amended Return (Effective 2027)

From 1 January 2027, taxpayers may correct historical VAT errors directly in the current VAT return without filing an amended return. This applies to:

• Under‑declared output VAT
• Over‑claimed input VAT
  [vatcalc.com]

3. Time of Supply Rules

Beyond periodic invoices, Serbia clarifies additional timing rules tied to tax base adjustments and internal invoice issuance deadlines. For utilities (as mentioned), the supply is deemed on the last day of the period billed.
[assets.kpmg.com]

More broadly, time‑of‑supply implications now link to internal invoice preparation deadlines, which directly affect VAT deductibility timing (see next section).

4. VAT Deduction Rules

4.1 Conditions for Exercising Input VAT Deduction

Where the recipient is the VAT debtor, the right to input VAT deduction can be exercised if:

• The internal invoice is prepared before the tax return submission deadline, and
• No later than the 10th day of the month following the relevant tax period

Input VAT may be deducted within five years from the end of the year in which the obligation to calculate VAT arose.
[assets.kpmg.com], [vatupdate.com]

4.2 New Restrictions

For supplies requiring internal invoicing (including tax base adjustments and advances), no deduction is allowed unless the internal invoice is created in accordance with the SEF rules. This aligns with Serbia’s transition to mandatory e‑invoicing. [vatcalc.com]

5. Expanded Definition of VAT Debtors

Serbia broadens the scope of persons who become VAT debtors, including:

• Anyone who incorrectly states VAT on an internal invoice without legal obligation
• The recipient in transactions involving investment gold between two VAT payers
  [assets.kpmg.com], [vatcalc.com]

6. Implementation Dates Overview

Conclusion

The 2025–2026 VAT amendments represent one of Serbia’s most comprehensive changes to its VAT framework in recent years. The reforms introduce stricter invoicing rules, clearer tax base adjustment procedures, more precise time‑of‑supply definitions, and tighter requirements for VAT deduction—while simultaneously strengthening the role of the national SEF electronic invoicing system.