"Phantom" companies are done for - companies with annual turnover of less than 2m RSD will not be paying VAT starting January 1st

Companies that have annual turnover of less than 2m RSD will not be paying value added tax any more. Namely, according to the announced changes and supplements in the Law on value added tax, starting from January 1st, only companies with annual turnover of more than 4m RSD will have to be registered in the VAT system.

So far, this census was on the limit of 2m RSD, while those companies with the turnover amounting between 1 and 2m RSD were able to chose whether they want to enter the VAT system. Now only those companies with the turnover ranging between 2 and 4m RSD will be able to choose, whereas all those companies with the annual turnover of less than 2m RSD will not be part of the VAT system.

That practically means that the company that does not pay VAT has no right to its return.

In this way, the legislator is trying to put an end to so-called "phantom" companies, which were founded exclusively for tax evasion.