A new tax offense, tax fraud related to VAT, was introduced into the Serbian legal system on December 5, 2020. Article 173a, Paragraph 1 of the Law on Tax Procedure and Tax Administration (hereinafter: “ZPPPA”) stipulates that anyone who, with the intention of enabling themselves or another person to obtain an unwarranted VAT refund or VAT credit in the previous 12 months, submits one or more VAT returns with false content, where the amount of the refund or credit exceeds one million dinars, shall be punished with imprisonment from one to five years and a fine. This is a specific form of fraud, which distinguishes this tax offense from tax evasion under Article 225 of the Criminal Code. The basic form of tax fraud related to VAT involves an evasion intent, as well as an objective incrimination condition of one million dinars. The evasion intent must be directed towards obtaining an unwarranted tax refund or tax credit and must be manifested at the time of committing the act.
The second form of tax fraud related to VAT is prescribed by Article 173a, Paragraph 2 of the ZPPPA, and is committed by anyone who, with the intention of enabling themselves or another person to completely or partially evade VAT payment in the previous 12 months, fails to submit one or more VAT returns, submits one or more VAT returns with false content, or in the same intent evades VAT payment in another way, where the amount of the evaded tax exceeds one million dinars, shall be punished with imprisonment from one to five years and a fine. The objective incrimination condition is set at one million dinars, and the evasion intent must be directed towards completely or partially evading VAT payment. Given that the characteristics of the tax evasion offense include failure to submit a tax return, as well as providing false information about facts that affect the determination of (any) tax liability, practical problems may be expected in distinguishing between tax evasion and tax fraud related to VAT.
Tax fraud related to VAT has two more severe forms. If the amount of VAT exceeds five million dinars, the offender shall be punished with imprisonment from two to eight years and a fine, and if the amount of VAT exceeds fifteen million dinars, the offender shall be punished with imprisonment from three to ten years and a fine.
A security measure prohibiting the exercise of a profession, activity, or duty for a period of one to five years is also provided.
