Amendments to the Serbian Late Payments Law
The Late Payments Law (Official Gazette of the Republic of Serbia Nos. 119/12, 68/15, 113/17, 91/19, 44/21 – Other Law, and 44/21, ’the Law) is intended to address liquidity issues faced by businesses due to delays in collecting commercial debt.
One weakness of the previous set of late payment rules has been the lack of electronic invoicing, which added to delays, in addition to the requirement to register invoices that hindered collection.
The latest amendments regulate registration and provision of electronic invoices and other electronic payment demands via the electronic invoicing system, and the registration in a central invoice register of these invoices and payment demands pertaining to business-to-government (B2G) and government-to-government (G2G) transactions in which public authorities appear as debtors.
The amendments change the definition of ‘monetary obligation’ to ‘contractual consideration for delivery of goods or services specified in an agreement, invoice, or other appropriate payment demand or electronic invoice or other appropriate electronic payment demand, including direct procurement cost’.
The new rules also define ‘electronic invoice’ as ‘invoice, interim or final certificate, or other appropriate payment demand, produced in an electronic format, which should contain the signature or other identifier of a responsible person or a person authorised to issue such invoice, or an electronic signature within the meaning of the Law on Electronic Document, Electronic Identification and Trust Services in Electronic Business Operations (Official Gazette of the Republic of Serbia No. 94/2017 and 52/2021).
In addition, the amendments provide a definition of the electronic invoicing system as a database to be set up and maintained by the Ministry of Finance in which electronic invoices are to be registered and which is to be used by creditors to deliver invoices to debtors in B2B and G2G transactions (‘commercial transactions’) where public authorities are debtors.
The updated provisions mandate the registration of electronic invoices issued by creditors in commercial transactions with the Central Invoice Register, based on data contained in the electronic invoicing system, ‘after technical requirements have been met’, or at the latest by 1 May 2022.
The amendments require creditors to register electronic invoices issued in commercial transactions with the electronic invoicing system.
The Law stipulates that a debtor is deemed to have received an electronic invoice from a creditor that has performed its contractual obligation as of the date the electronic invoice is registered with the electronic invoicing system.
Moreover, where an electronic invoice is delivered to a public authority on a non-working day, it is deemed to have been delivered on the first subsequent working day.
This set of amendments make it much easier, simpler, and efficient for creditors to deliver invoices to debtors, including by removing the risk of the debtor no longer occupying premises at its address registered in Business Register (which was just one of the many perceived advantages of the new rules).
Debtors are required to verify any electronic invoices they receive through the electronic invoicing system, and have an eight-day window to accept or reject an invoice. Any invoices not specifically rejected within this period of time will be deemed to have been accepted.
Debtors are required to pay only electronic invoices registered in and delivered through the electronic invoicing system.
Statistics have shown that few public authorities and businesses have been registering invoices, even though this is a legal requirement and failure to do so carries a fine of between 100,000 and 2 million dinars.
For the amendments to be effective in practice, businesses must become fully aware of the new rules, and training should be extended to the corporate sector to familiarise firms with the invoice registration procedure. Recognition of the importance of invoice registration would go a long way towards promoting compliance and ensuring the amendments are implemented in their entirety.