Tax Alert, November 2017

The Ministry of Finance has, in Ruling no 430-00-45/2017-04 of October 18, 2017, confirmed the usability of residence certificates for Google and Facebook, issued by the competent authority of the Republic of Ireland in electronic format.

Namely, the aforementioned ruling states that beginning with 2017, residence certificates in the Republic of Ireland are exclusively issued in electronic format (PDF), and that such certificates will no longer contain a reference to a specific agreement on the avoidance of double taxation. However, these certificates will nevertheless include the date of issuance, the full name of a taxpayer and his tax registration number, confirmation that the taxpayer is a resident of the Republic of Ireland, the signature of the authorized tax inspector and the seal of the competent tax authority.

Bearing in mind the aforementioned, the Ministry of Finance concludes that a certificate of residence issued in electronic format by the competent tax authority of the Republic of Ireland, which contains all the elements mentioned above, can be considered as a residence certificate in terms of Article 159a paragraph 1 of the Tax Procedure and Tax Administration Law. Therefore, certificates provided by Google and Facebook to Serbian taxpayers may be considered as credible.

Recommendation of the Ombudsman of Serbia regarding a taxpayers’ right to claim interest for overpaid taxes and related duties

In the Recommendation no. 1317-1208/17 as of October 20, 2017, the Ombudsman of Serbia has identified omissions in the work of the tax Authority (in particular, Tax Administration branch in Backa Topola) which led to a violation of the taxpayer’s right to claim interest for overpaid taxes and related duties.

In the aforementioned recommendation, the Ombudsman of Serbia makes the following statements:

• Тhе competent tax authority is obligated to decides on a taxpayer’s request for the payment of interest in the form prescribed by the law, i.e. via a tax administrative act;
• The lack of funds for the payment of interest cannot be a legitimate reason, nor an obstacle for deciding on the taxpayer's request for interest in the legally prescribed form; and
• The Tax Administration, as well as its organizational units, cannot reject the application of explicit legal provisions through internal memos and notifications, nor base its decisions regarding the rights, obligations and legal interests of citizens on these acts.

In accordance with the above, the Ombudsman ordered the tax authority to decide on the taxpayer's request immediately via an appropriate act. Additionally, it ordered that future requests should exclusively be processed in accordance with the provisions of the Constitution, laws and other applicable regulations, along with the proper interpretation of instructions applicable to the work of the Tax authority.

Finally, the Ombudsman stated that the tax Authority should, in cooperation with the Ministry of Finance, undertake all measures and activities within its competence in order to provide funds for the fulfillment of legally determined citizens' rights, including the right to interest for overpaid taxes and related duties.

In accordance with the Law on the Ombudsman, if the tax authority fails to act upon the recommendation within the deadline of 60 days, the Ombudsman may inform the public, the Parliament and the Government of this fact, and may also recommend that the official who manages the particular tax authority be held accountable of any determined omissions.