VAT treatment of cross-border industrial supply

Import VAT is charged on the duty-inclusive customs value at the standard rate and is, in principle, recoverable by a registered taxable person who uses the goods for taxable supplies. Whether that recovery is available depends on who imports and on their registration status — which is why the VAT position cannot be separated from the import structure.

A foreign supplier without a Serbian establishment faces different registration and recovery mechanics from a domestic contracting party. The most frequent error is to agree a commercial price and only then discover that the party positioned to import cannot recover the VAT, converting a recoverable cost into a real one.