VAT reciprocity would bring Serbia EUR 140m?

“By establishing reciprocity in VAT return with all countries in the region, the EU and Turkey, Serbia would gain a total annual benefit of EUR 140m”, says Mirko Vincetić, director of "Cash Back", to Tanjug.

He claimed that VAT reciprocity with all EU countries and the region would bring EUR 100m to the Serbian economy, whereas regulating the issue with Turkey would bring a further EUR 40m to the Serbian budget.

“Sixteen EU member states abide unconditionally by the 13th VAT Directive and return VAT to all countries including Serbia, whereas 12 EU member states apply this directive with the condition of reciprocity”, explained Vincetić.

“This means, for example, that Croatia will return VAT to Serbian companies if the Serbian Tax Administration returns VAT to Croatian companies”, said Vincetić, who manages a company that has been providing foreign VAT refund services to legal entities in Serbia for the last 8 years.

Vincetić added that VAT from Croatia cannot be refunded to Serbia, Macedonia, Montenegro or Bosnia and Herzegovina.

“Considering the problems that Serbian companies face because they cannot get VAT refunded from some EU countries and in the region, we are advocating adoption of our initiative to establish reciprocity in VAT return”, Vincetić pointed out.

“All companies in the region would be more competitive if they could obtain VAT refunds from countries of the region”, Vincetić said, adding that Serbian business people see their interest in this.

When it comes to establishing reciprocity with Turkey, Vincetić pointed out that Turkish trucks passing through Serbia do not buy fuel in our country because it is expensive for them, instead they buy in Slovenia and Austria because they can get the VAT refunded.

“Calculated according to international methodology, the benefits for the Serbian budget would be EUR 40m per year, through fuel sales and better use of our roads, because we will then attract more Turkish trucks that now use Corridor IV or other routes to Central Europe”, Vincetić pointed out.

He added that it is also important for Croatia to establish reciprocity with Turkey, so that Corridor X can become more attractive for Turkish trucks.

Vincetić remarked that one of the recommendations in the Foreign Investors Council's 2013 White Book to the Serbian Government and Tax Administration was to establish reciprocity with all European countries, but there has been no progress.

According to his statements, the only barrier to solving this problem is the unfamiliarity of decision-makers with this rather specific subject.