Serbia: New practice regarding collection of tax
The tax administration notified taxpayers of a new practice regarding collection of tax.
The tax administration notified taxpayers of a new practice regarding collection of tax.
The tax administration informed taxpayers that beginning 20 December 2022, a request for deferral of tax payment, as well as a request for transfer between tax accounts after delivery of a warning (within a period of five days indicated in the warning), will not interrupt the collection procedure as per the warning. The tax administration will issue a decision on enforced collection after five days from the day of receipt of a warning.
Request for deferral of tax collection
The implications of initiating the enforced collection procedure when a decision has not been made on a request for deferral of tax payment are as follows:
- Assessment of increase of tax debt in enforced collection procedure
- Assessment of potential costs of enforced collection procedure
- Establishment of a measure for securing tax collection in enforced collection procedure, irrespective of the invoked facts and potential outcome in processing the request filed by a taxpayer
Only approval of a taxpayer’s request for deferral of tax payment results in interruption of the initiated enforced collection procedure in respect of the tax amount owed.
Request for transfer between tax accounts
The tax administration’s position that a request for transfer between tax accounts also does not interrupt an initiated collection procedure implies the following:
- Equating the institution of transfer between tax accounts with deferral of payment of tax liabilities, from a process perspective
- An unresolved request for tax payment through transfer between tax accounts does not constitute an impediment to initiating enforced collection procedure
In the event that the tax administration accepts the taxpayer’s request for transfer between tax accounts within the period indicated in a warning, enforced collection procedure will not be initiated against the taxpayer. Otherwise, if the tax administration fails to reach a decision on the request for transfer between tax accounts within the period indicated in the warning, the taxpayer’s liability which they wish to settle through transfer between tax accounts will be subject to enforced collection, irrespective of the taxpayer’s intentions regarding how to settle outstanding tax due.
KPMG observation
This interpretation by the tax administration limits the taxpayer’s rights, as the initiation of enforced collection procedure depends on the speed with which the tax administration responds to a request for deferral of owed taxes and a request for transfer between tax accounts.
Read a January 2023 report prepared by the KPMG member firm in Serbia
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