Persons who are not VAT payers often do not know that they can find themselves in a situation where they are obliged to charge VAT and pay it. Our experience from practice shows that this is most often happening with entrepreneurs who are not obligated to do bookkeeping and therefore they do not know that they can be found in this situation. Also, it is not a rare case that other non-VAT payers are not aware of this. One of the typical examples that often happens in practice is that these persons purchase some sort of Internet services and licenses for software from a foreign company that is not registered as a VAT payer in Serbia. In this case, a person who receives such a service, and who is not a VAT payer, would be a tax debtor for such turnover and would have to charge VAT and would not have the right to deduct the previous tax because he is not a VAT payer which means he would have to pay the VAT.
What causes certain doubts about these is the legal entities view that the purchasing licenses is not a service. However, in 5th Article of the VAT Act is defined what is considered to be a service. According to this Article, service is transmission, assignment and giving the use of copyright and related rights, patents, licenses, trademarks and other intellectual property rights. Therefore, the purchasing of licenses is considered a service according to this Law. Also in Article 10 of the VAT Law, it is defined who is considered a tax debtor for a particular turnover. According to Article 10, the tax debtor for the sale from a foreign person who is not registered as a VAT payer in Serbia is recipient of goods and services. Accordingly, a legal entity that procures an Internet service or license is certainly obliged to charge VAT and pay it regardless of whether it is VAT payer or not.
Persons who are not VAT payers, but who are found in the role of tax debtors for some transactions, are obliged to submit their tax return on the PPPDV form up to the 10th of the month for the previous tax period (calendar month). Here we should pay attention to another tax form that can occur when purchasing licenses, which is a profit tax after deduction. All taxpayers, other than entrepreneurs, who are not taxpayers of this tax, are obliged to calculate and pay this tax. We especially want to draw your attention to the fact that the VAT base calculation includes a profit tax after deduction, so the obligation for the VAT would definitely be higher.
If you have already purchased some kind of internet services and licenses from abroad or you are going to purchase it, and you are not a VAT payer, you should be aware that you are obliged to charge VAT and pay it. This is just one type of services that are purchased from abroad, certainly the purchase of services from abroad from the point of VAT view is quite wide and complex topic, so we advise you, if you find yourself in such a situation, be free to consult with an expert in this field.
