The Law on Fiscalization (Official Gazette of the RS, Nos. 153/2020, 96/2021 – hereinafter: “LOF”) introduces new rules for recording retail transactions compared to the rules known under the Law on Fiscal Cash Registers (Official Gazette of the RS, Nos. 135/2004 and 93/2012 – hereinafter: “LFR”). Taxpayers are required to align their business operations with the LOF by April 30, 2022, when the LFR is set to cease to be in effect.
Namely, the subject of fiscalization is the retail turnover of goods and services as well as the received advance for retail turnover. According to the LOF, the taxpayer subject to fiscalization is:
- every taxpayer on income from independent activities;
- every taxpayer on corporate profit tax;
who conduct retail transactions.
However, the LOF has left room for a by-law to specify activities for which there will be no obligation to record transactions through an electronic fiscal cash register. In this regard, the Regulation on Determining Activities for Which There Is No Obligation to Record Retail Transactions through an Electronic Fiscal Device (Official Gazette of the RS, No. 32/2021 – hereinafter: “Regulation”) introduced a “list” of activities that are exempt from recording retail transactions through an electronic fiscal cash register.
Fiscalization is a set of measures and procedures that enable the control of retail turnover. The LOF is not the only regulation governing this issue. It should be noted that the new rules on fiscalization are only a segment of a broader process which, together with the introduction of the electronic invoicing system, is called “electronic fiscalization.” Therefore, the connection between the Law on Electronic Invoicing (Official Gazette of the RS, No. 44/2021 – hereinafter: “LEI”) and the LOF should be noted. For example, the LEI stipulates that for retail turnover, as well as received advances for retail, conducted by a VAT taxpayer, there is an obligation to record the calculation of VAT in the electronic invoicing system only if there is no obligation to issue a fiscal receipt for that turnover or received advance. In other words, VAT taxpayers who are exempted by the Regulation from recording transactions through electronic fiscal cash registers (e.g., lawyers) are not simultaneously exempted from the obligation to record the calculation of VAT in the electronic invoicing system. This calculation also allows a certain degree of control over retail turnover.
A taxpayer subject to fiscalization is required to submit information to the Tax Administration about the business premises where the fiscal cash register will be used before starting to use the electronic fiscal cash register. The taxpayer is obligated to do this for each business space and business room separately. The submission of information is done electronically by submitting the “PGJO” form. After receiving the specified information, the Tax Administration is required to generate a unique designation for the business space and business room, which will be used in the electronic fiscal cash register.
The Tax Administration supervises the application of the LOF. For violation of the provisions of the LOF, a measure of prohibition of performing activities is imposed:
- for a duration of up to 15 days if an irregularity is detected at the taxpayer subject to fiscalization for the first time during the supervision process;
- for a duration of up to 90 days if an irregularity is detected at the taxpayer subject to fiscalization for the second time during the supervision process;
- for a duration of up to one year if an irregularity is detected at the taxpayer subject to fiscalization for the third time during the supervision process.
The prohibitions are imposed on the business space and business rooms where the irregularities were detected. The supervision period relevant for determining the duration of the prohibition of performing activities is 24 months from the first detected irregularity.
The application of the LEI and LOF also envisages misdemeanors for which fines ranging from 20,000 dinars to 2,000,000 dinars are imposed, depending on the type of fiscal misdemeanor and whether the offender is an individual, entrepreneur, or legal entity. This is further regulated by by-laws (3 regulations and 3 rulebooks), as well as an internal technical instruction from the Ministry of Finance that has been in effect since January 1, 2022. Misdemeanors are prescribed for violations of regulations in the field of electronic invoicing.
