What is e-fiscalization and what are the new features that have been introduced?

E-fiscalization represents electronic monitoring of fiscal obligations related to the registration and control of sales of goods and services. This system enables real-time monitoring of fiscal transactions and prevents the possibility of manipulation and tax evasion.

In the Republic of Serbia, with the new Law on Fiscalization, e-fiscalization has become mandatory for all business entities, which in practice means that all business entities must use electronic systems for issuing fiscal receipts and monitoring their fiscal obligations. However, the transition period for all business entities lasted from November 1st, 2021 until April 30th, 2022, and the Law on Fiscal Cash Registers ceased to be valid on May 1st, 2022.

The e-fiscalization system consists of fiscal cash registers that are connected to the central database of the Tax Administration.

In order for business entities to use this system, they must acquire and install a fiscal cash register, which must be connected to the Tax Administration through an internet connection. However, it is important to note that based on their business activities, the number of issued receipts, and other business characteristics, the taxpayers will choose whether they want a software or hardware solution, that is, whether they will install a “device” on their computer, tablet or buy a physical device.

What are the benefits of implementing e-fiscalization?

E-fiscalization has numerous advantages, including reducing administrative costs, reducing the possibility of errors in issuing fiscal invoices, faster processing of fiscal transactions, as well as increasing transparency and efficiency in monitoring fiscal obligations.

The implementation of e-fiscalization in the Republic of Serbia is an important step towards modernizing business practices, as well as combating the shadow economy and illegal activities in business.

It is also important to note that e-fiscalization in the Repuplic of Serbia is part of a broader trend of digitizing business, which is being implemented to facilitate business and reduce costs. Electronic systems such as e-fiscalization and e-invoicing enable businesses to perform their operations faster, more efficiently, and at a lower cost.

In addition, e-fiscalization also contributes to improving the work of the Tax Administration and facilitates the control of business operations, which can lead to a reduction in illegal activities and improvement of the business environment in the Republic of Serbia.

It is important to mention that businesses in the Republic of Serbia were already required to use fiscal cash registers before the introduction of e-fiscalization, but e-fiscalization has brought significant advantages in terms of speed and efficiency in processing fiscal transactions, as well as better control over tax payments.

 

What is e-invoices and what are the new features that have been introduced?

An electronic invoice, or e-invoice is, according to the Law on Electronic Invoicing, a request for payment for transactions with compensation, any other document that affects payment or the amount of payment, an invoice issued for transactions without compensation which are issued, sent and received in a structured format that enables fully automated electronic processing of data through electronic invoicing systems.

In other words, instead of a paper invoice, all invoice information such as items, quantities, prices, taxes, and total amounts is transmitted electronically between the computer systems of two business entities.

The aforementioned Law on Electronic Invoicing, which came into force on January 1^st, 2023, regulates in detail certain issues related to registration in the Electronic Invoicing System, issuance of electronic invoices, exceptions to the obligation to issue e-invoices, as well as which transactions e-invoices are sent for.

For example, the Law on Electronic Invoicing regulates in detail who is obliged to issue e-invoices. The obligation to issue e-invoices applies to the following entities:

• private sector entities based on mutual transactions;
• private sector entities based on transactions with public sector entities, including all requests for payment to public sector entities;
• public sector entities based on transactions with private sector entities;
• public sector entities based on mutual transactions, including all requests for payment;
• tax representatives of foreign entities in the Republic of Serbia, in accordance with the regulations governing value-added tax, based on transactions with private and public sector entities.

What are the advantages of introducing e-invoices?

Electronic invoices have numerous advantages compared to invoices issued in paper format. Some of the most important ones are greater efficiency, as e-invoices are issued and received in real-time, which means that business processes can be completed much faster than with invoices issued in paper format.

The next advantage is certainly cost reduction, as e-invoices reduce the costs of printing, sending, and storing paper invoices, which can significantly reduce business costs in the long run. Another important advantage is precision, as e-invoices are automatically processed, reducing the possibility of errors in data entry.

The conclusion drawn from all the aforementioned legal changes is that it is necessary to keep up with modern solutions. The new legal regulations enable faster, more efficient, and more transparent business operations for companies, while at the same time greatly facilitating the work of state authorities responsible for tax control and supervision, primarily the Tax Administration. However, it remains to be seen how the new legal framework will perform in practice, and how companies will adapt to and accept the modern way of doing business.