14 Feb 2023

Novelties in Tax Procedures – What You Need to Know

Amendments to the Tax Procedures and Tax Administration Act (“Act“) were adopted and entered into force on December 20, 2022. The following is a reminder of the most significant changes you should keep an eye on.

(Non)postponement of the enforcement procedure

The legislator removed paragraph 6 from Article 77 of the Act through the amendments. This article stipulated that the Tax Administration would only initiate compulsory enforcement after a decision had been made on a taxpayer’s request to postpone tax payment. This move implies that the Tax Administration may, without restrictions, initiate enforcement proceedings even though a request for tax deferment has been submitted.

In that case, the enforcement procedure will increase the tax debt. The taxpayer will incur the enforcement, collection, and other collateral costs regardless of whether the taxpayer submitted a proper request for postponement of tax payment and the eventual positive outcome thereof.

Ex officio defense attorney

Moreover, the Act in this version introduces an ex officio defense counsel.

In the pre-investigation procedure, the tax police shall appoint ex officio an attorney if the suspect did not provide a defense attorney. This applies when there is reasonable suspicion that the defendant has committed a tax crime under the Serbian Code of Criminal Procedure, which prescribes a sentence of eight years in prison.

Amendments mentioned above harmonize the Act with the Criminal Procedure Code and its provisions on mandatory defense and ex officio defense counsel.

New criminal acts

The amendments to the Act introduced liability for two new criminal offenses: the illegal supply of fiscalization equipment and the illicit supply of accounting and other software.  Criminal liability applies to persons who illicitly produce, process, sell and transfer fiscalization equipment, accounting, and other software, which may avoid recording turnover, resulting in tax evasion. For both counts, the amendments prescribe a five-year prison sentence and introduce a ban on the responsible person of the company and the sole trader from performing certain related activities for one to five years by a court order. Electronic devices, equipment, and software, as well as accounting and other software that are the subject of these criminal acts, will be confiscated.

Tax return for the personal income tax

Finally, there is news for individuals who earned more than three average annual salaries in Serbia based on the Serbian Statistical Office data. The taxpayer – a natural person – should submit the yearly personal income tax return exclusively in electronic form through the portal of the Serbian Tax Administration.

By introducing the so-called self-taxation regime, the Tax Administration aims to facilitate and speed up the process by inserting the data in the tax return in advance and uploading it to the portal no later than April 1 of the current year for the previous one for which the annual tax is determined. The above will applies from January 1, 2023, to tax returns for the 2022 annual personal income tax.


Authors: Danica Misojčić, Žarko Popović