28 Feb, 2018

Mandatory Registration of Invoices to Public Sector Entities Officially Introduced

The rule according to which business entities will have to register invoices1 issued to entities in the public sector is set to enter into force on March 1, 2018. Business entities will be obliged to register the invoices with the Central Registry of Invoices whose management has been entrusted to the Treasury of the Ministry of Finance of the Republic of Serbia, and if they fail to carry out the registration they will not be able to settle their claims and may even be charged with a misdemeanor.

This obligation is envisaged in the Amendments to the Late Payments in Commercial Transactions Act2 and has been concretized by the adoption of the appropriate bylaw, and it refers to invoices issued in relation to the supply of goods and services to public sector entities for a fee3 .Since the public sector includes public enterprises, the Republic of Serbia, and all local self-governments, introduction of a mandatory registration of invoices represents a change that should affect a significant number of business entities.

It is very important to note that members of the public sector will not be allowed to carry out payments regarding invoices that have not been registered in advance with the Central Registry of Invoices – which aims to ensure the timely registration. To ensure that this prohibition is respected, a misdemeanor has been prescribed for the responsible person in the public sector (e.g. mayor) in the amount of up to RSD 150,000.00 in the event that the payment is made for a non-registered invoice. On the other hand, the business entity which does not register an invoice in accordance with the Act can be fined for a misdemeanor in the amount of up to RSD 2,000,000.00.

The situation is further complicated by the fact that the obligation of registration does not enter into force on March 1st for all members of the public sector, but only for public sector entities who make payments through the account held with the Treasury. The moment in which the mandatory registration of invoices issued to public sector entities that operate through accounts held with commercial banks will commence has not yet been determined, and will depend on the development of the technical capabilities of the Central Registry of Invoices.

This practically means that businesses entities will have to check whether a certain public sector entity whom they supply with goods/services makes its payments through the Treasury or through a commercial bank. Although this may seem simple to experienced jurists we believe that, in practice, a significant number of business entities may get confused – and therefore we advise caution, especially because the failure to comply with the obligation of registration may render the settlement of claims impossible, and may also even lead to misdemeanor charges.

Bearing in mind that this is a new reporting obligation and, in a sense, а new debt collection procedure – it is recommendable that all business entities that do business with the public sector entities timely prepare for the application of amendments to the Act. Of course, if you have any questions, or if you need assistance in the preparation, please feel free to contact Gecić Law team.


[1]In terms of the said obligation, an invoice includes all documents that show the fee for the delivery of goods or provision of services in commercial transactions.
[2] “Official Gazette of the Republic of Serbia”, No. 119/2012, 68/2015, 113/2017.
[3] Including construction and investment works and public utilities.