15 Apr 2021

New Electronic Invoicing Act – which novelties can we expect?

One of the significant novelties in Serbian legislation refers to the regulation of electronic invoicing through the  Electronic Invoicing Bill (the “Bill“).  The adoption of the Bill is on the agenda of the National Assembly on April 21, and it remains to be seen whether the Bill will be modified and and if so, which provisions will be changed.

Reasons for the adoption of the Bill

One of the key reasons for the adoption of the Bill is further harmonization of Serbian legislation  with European Union law.  Additionally, in the words of the Minister of Finance, the Bill ”improves the transparency, legal certainty and consistency of the national legal framework which regulates electronic invoicing”.  The solutions envisaged by the Bill should also provide for time savings.

What constitutes an electronic invoice according to the Bill?

In accordance with the Bill, the electronic invoice includes the following documents:

  1. a) request for payment transactions with fees,
  2. b) any other document that affects the payment, i.e., the payment amount,
  3. c) an invoice issued for transactions with no fees,
  4. d) invoice issued for received advance payments.

To constitute an electronic invoice, the listed documents must be issued, sent and received in a structured form that enables fully automated electronic data processing through a system of electronic invoices.

The Bill also lists the elements that the electronic invoice usually contains, and the plan is to regulate in more detail, through an act of the Minister of Finance,  cases when certain elements can be omitted, cases when there is an obligation to list additional elements, the form and manner of delivery of accompanying documentation and other issues through an act of the Minister of Finance.

And to whom does the Bill apply?

The Bill applies to transactions between public sector entities, the private sector, but also in transactions between private and public sector entities.  When citing private sector entities, the Bill refers to value added  taxpayers.

The obligation to issue an electronic invoice applies to private sector entities, the public sector, as well as for tax representatives of foreigners in Serbia, in transactions with private and public entities.  On the other hand, the obligation to issue electronic invoices does not apply to the retail trade, contractual obligations directed towards the users of funds from international framework agreements, nor in procurement, modernization and overhaul of weapons and the procurement of security-sensitive equipment.

In addition, the Bill introduces the obligation to create an electronic record of the calculation of value added tax in the system of electronic invoices.

The electronic invoice as a credible document in terms of the Enforcement and Security Interest Act

In accordance with the Bill, the electronic invoice is considered a credible document in terms of the Enforcement and Security Interest Act (the “Act“).  To be considered credible, it needs to be sent through the electronic invoicing system.

The Bill also stipulates that the credibility of origin and the integrity of content of the electronic invoice are to be ensured by issuing the invoice in the format prescribed by the Bill and maintaining it in a format suitable for electronic storage of the document.  In addition, the Bill provides for the possibility for a private-sector entity that issued or received an invoice, to print it within the prescribed period for the mandatory storage of electronic invoices and in a manner which  guarantees the credibility of the invoice.

On the other hand, the Act stipulates that enforcement and security can be carried out on the basis of an enforceable or credible document and invoices are credible documents.  However, the Act also stipulates that “the enforcement creditor shall enclose an original certified copy or transcript of a credible document with the motion”.  Although the Act envisages the possibility of the motion for enforcement to be in electronic form, the same possibility is not envisaged for a credible document.

It remains to be seen whether the use of an electronic invoice as a credible document in terms of the Act will create problems in practice.

Sanctions prescribed by the Bill

Finally, the Bill regulates the handling of electronic invoices, as well as oversight procedures.  The Bill prescribes fines for violations related to electronic invoices of up to 2,000,000 dinars for legal and public sector entities, up to 150,000 dinars for a legally a representative within a legal entity and up to 500,000 dinars for entrepreneurs.

What’s the conclusion?

It can be concluded that the Bill introduces changes that will inevitably affect the the economy and the enforcement procedure.  Thus, it confirms the importance, legality, and legitimacy of electronic invoices.

Authors: Ognjen Colić and Mina Kuzminac