Purchasing a first apartment is a significant milestone for every citizen, and Serbia provides a VAT refund as an incentive for buyers who meet certain conditions. However, regardless of eligibility, it is important to note that the right to a VAT refund is not unlimited and is subject to statutory deadlines.
How long does the right to a VAT Refund last?
The right to a VAT refund for the purchase of a first apartment expires within five (5) years from the first day of the year following the year in which the buyer acquired the right to the refund. In other words, the deadline starts on 1st January of the year after the year in which the buyer fully paid the total purchase price of the apartment.
Regardless of any interruptions in the statute of limitations, this right expires in its entirety ten (10) years after the end of the year in which the buyer acquired said right.
What does this mean in practice?
Let’s imagine that a person bought its first apartment and fully paid the price, including VAT, during 2020. The deadline for submitting a request for a refund of VAT starts on 1st January 2021 and lasts until 31st December 2025. If the first-time homebuyer in this example does not submit the request within this period, his/her right to a VAT refund will expire, and he/she will no longer be able to claim a refund of VAT for the purchase of its first apartment.
If there is an interruption in the statute of limitations, for example, by submitting an incomplete request that is later supplemented (e.g., in 2021 and 2022), the five-year period restarts after each update. However, even with interruptions, the right to refund a VAT completely expires after ten years, meaning that, in our example, the absolute deadline would be the end of 2030.
How to ensure you don’t miss the deadline?
Buyers of the first apartment should keep track of the deadlines for submitting a request for a refund of VAT to avoid losing their right due to the statute of limitations. The best approach is to submit the request as soon as possible after the full payment of the purchase price to prevent potential issues with deadlines and administration.
If you are in a dilemma whether you first meet the conditions for a refund, as well as whether you are still entitled to it, it is most expedient to consult with experts in the legal and tax field.
Author: Goran M. Ćiraković, attorney-at-law
Photo: Unsplash.com | Vitaly Gariev