Serbia implementing taxes on all digital services from abroad

Serbia is implementing taxes on all digital services and services from abroad. In late 2016, the decision was made that VAT would be charged in Serbia for digital products and services sold by foreign legal persons to local natural persons (b2c). This change in fact brings the regulations in line with those in the EU, where they have been implemented for more than two years.

The first ones to find about this were Serbian gamers when Steam announced that the prices for Serbian customers would be higher by 20% beginning with April 1. However, the same fate awaits domain vendors, providers of various streaming services (Netflix, Amazon Prime, Spotify), Google products, mobile apps and everything else one can buy as a private user.

For those who sell digital services from Serbia, this is good news, as it will help them become more competitive, given the fact that they are paying the taxes anyway.

However, the change is not quite as welcome to those who sell their services to clients in Serbia. Aside from there not being a limit up to which there is no taxation, it is not possible to register online to collect taxes either, so foreign vendors need to hire tax agents in Serbia so as to have tax requests prepared and filed.

Serbian startups registered elsewhere also need to be careful, as the penalties for failing to adhere to this law range from RSD 10,000 to RSD 2 million. Furthermore, Serbian companies purchasing digital services from a company abroad (for example, Facebook or Google advertising), can be exempt from withholding tax.

Poreska uprava Srbije

Ministarstvo finansija Republike Srbije

Google Inc. United States

Netflix Inc Los Gatos

amazon.com Inc. SAD

Spotify Limited London

digital service tax

foreign service tax

digital product VAT

foreign legal person service VAT

Steam

Netflix

Amazon Prime

Spotify

mobile apps

tax payment

tax agent

exemption from withholding tax