Anti-evasion Provisions Applicable to Value-added Tax in Serbia

Vasović, Miloš (2025) Anti-evasion Provisions Applicable to Value-added Tax in Serbia. Zbornik radova Pravnog fakulteta u Nišu, 64 (105). pp. 117-132. ISSN 0350-8501

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Abstract

Value-Added Tax (VAT) constitutes the largest share of total tax revenue collected in Serbia. Due to the high VAT rate and the credit-invoice method, where a taxpayer can offset input VAT against output VAT, VAT is highly vulnerable to tax evasion/fraud schemes. This paper analyzes two domestic anti-evasion rules applicable to VAT. The Serbian Value-Added Tax Act contains reverse charge provisions designed to prevent potential tax evasion. In situations not covered by these provisions, Serbian tax procedure law includes a measure that tax authorities could implement to collect unpaid taxes, including VAT. This is the secondary tax liability provision. The main aim of the paper is to highlight the issues that arise from the application of these anti-evasion measures. Based on the hypothesis that domestic measures are not sufficiently effective in curbing evasion, and that solutions provided by EU legislation should be considered, the author uses the normative-dogmatic and content analysis methods, with particular reference to the case law of the Court of Justice of the European Union, as well as comparative method to provide recommendations to the Serbian legislator to ensure legal certainty and effective VAT collection.

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