Serbia Proposes Raising Mandatory VAT Registration Threshold to RSD 12 Million

Summary

Members of the National Assembly of the Republic of Serbia submitted a draft law on 24 August 2026 proposing to increase the mandatory VAT registration threshold from RSD 8 million to RSD 12 million, measured by reference to gross receipts during the preceding 12 months.
If enacted, the higher threshold would apply from 1 January 2027 and could release some smaller businesses from compulsory VAT registration. The measure remains a proposal and should be distinguished from Serbia’s separately enacted amendments to registration, deregistration and return-correction procedures. [vatupdate.com]
Businesses with turnover between RSD 8 million and RSD 12 million should model the cash-flow and commercial consequences but should not change their VAT status before enactment. Input VAT recovery, customer profiles and the minimum registration period may materially affect any deregistration decision. [vatupdate.com]

Article

Members of the National Assembly of the Republic of Serbia submitted a legislative proposal on 24 August 2026 that would increase the country’s mandatory VAT registration threshold. Under the proposal, businesses would become subject to compulsory VAT registration when their gross receipts during the preceding 12 months exceed RSD 12 million, rather than the current RSD 8 million threshold. The proposed effective date is 1 January 2027.

The measure remains a proposal and should not yet be treated as enacted law. Until the legislative process is completed and the final legislation is published, businesses must continue applying the existing RSD 8 million threshold. Companies approaching that amount should maintain rolling turnover controls and comply with the current registration requirements.

If adopted, the higher threshold could reduce VAT compliance obligations for smaller businesses whose rolling 12-month turnover is above RSD 8 million but does not exceed RSD 12 million.

Potential benefits may include fewer return-filing, invoicing and recordkeeping obligations. However, operating outside the VAT system may prevent the recovery of input VAT and increase the embedded tax cost of purchases, operating expenditure and capital investment.

The commercial outcome will depend heavily on the business’s customer profile. A supplier dealing mainly with private consumers may benefit from greater pricing flexibility outside the VAT system. A supplier serving VAT-registered businesses may find that continued registration is commercially preferable because its customers can generally recover the VAT charged, while the supplier retains its own entitlement to input VAT recovery.

The proposal should also be considered alongside Serbia’s broader VAT reforms. Separately enacted amendments generally applying from 1 January 2027 revise registration, deregistration, final-return and correction procedures. Under those rules, small taxpayers, farmers and businesses entering the VAT system after exceeding the applicable threshold must generally remain registered for the current calendar year and the following calendar year. The amendments also permit the tax administration to prepare a return in specified cases where a taxpayer fails to file. [vatupdate.com]

Businesses should not assume that enactment of the RSD 12 million threshold would result in automatic deregistration. The minimum registration period, formal deregistration conditions, inventory and capital-asset adjustments, and outstanding filing obligations would still need to be considered. Finance and tax teams should therefore monitor the proposal, maintain turnover calculations under both thresholds and prepare system changes only after the final legislation is confirmed.

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