Electronic invoices

The Law on Electronic Invoicing entered into force on May 7, 2021. Its implementation has been postponed until the first day of 2022. With this text, we will briefly point out the novelties brought by this law, the dates from which legal entities will be obliged to issue their invoices in electronic form, as well as some expected benefits of its application.

According to the Law, “electronic invoice” is a request for payment based on transactions and any other document that affects the payment or it’s amount , issued, sent and received in a structured format that allows fully automated electronic data processing through electronic invoices.

The new institute of this law are Data Intermediaries, to which the private sector entity can, by contract, entrust performing of tasks related to issuing, sending, receiving and storing electronic invoices, as well as electronic recording service, providing that the Intermediary previously had obtained Ministry of Finance formal approval for operating. However, the Intermediary cannot be found responsible for the content of the electronic invoice and the accompanying documentation.

Electronic invoices issued or received by a public sector entity are to be stored permanently in the system of electronic invoices, while electronic invoices received by the private sector are kept for a period of 10 years counted from the end of the year in which they were issued. A private sector entity that has issued or received an electronic invoice is allowed to print it in one or more hard-copies until the expiration of mandatory storage period, in a manner that ensures the authenticity of the origin and integrity of the printed invoice.

The system of electronic invoices can be used by public sector entity and private sector entity upon the establishment of technical-technological conditions. However, public sector entities in mutual financial transactions will be obligated to receive, issue and keep invoices in electronic form starting from January 1, 2022. From the same moment, private sector entities are obliged to start issuing electronic invoices to public sector entities. The obligation of a private sector entity to receive and keep an electronic invoice issued by a public sector entity, as well as electronic invoices issued by a private sector entity, shall apply from 1 July 2022.

By prescribing the obligation of electronic recording in the electronic invoices system, tax calculation obligations shall become visible and enable control and insight into those transactions.

The improvement of electronic invoices storage will be achieved by proscribing their obligatory storage in the provided electronic format in the electronic invoices system, or, in certain cases, with the Intermediary.

Benefits of the Law implementation might be primarily expected in time and place-saving effects since the need for issuing, receiving and keeping invoices in paper form has been eliminated. This effect is supported by providing an efficient electronic archiving system, which search will require less time and the integrity authenticity of the of the electronic invoice will be ensured by its  storage in an electronic format.

We point out that the new Law on Fiscalization (“Official Gazette of RS”, No. 153/2020), which implementation is also due on January 1, 2022. (new Law on Fiscalization), is also based on an online regime that shall enable Tax Administration to have a real time insight into trade transactions and any received advance payment.

Simultaneous application of the mentioned laws is gradually creating a legal framework that will contribute to the suppression of black-market transactions, and the real-time insight will provide an improvement to the process of tax collection.

We can assume that the implementation of these new and significant changes will impact the daily work of most market participants, but since the law requires technical improvement implementation it’s effects may be delayed.