Regulation on the procedure and conditions for payment of tax liability by compensation

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1 Pursuant to the Article 67 Paragraph 4 Point 1 of the Law on Tax Procedure and Tax Administration ("Official Gazette of the Republic of Serbia", reference number 80/2002, 84/2002 and 23/2003), Minister of Finances and Economy Regulation on the procedure and conditions for payment of tax liability by compensation ("Official Gazette of the Republic of Serbia", reference number 63/2003) Article 1 This regulation shall govern the manner and conditions under which the tax debtor (hereinafter referred to as borrower) in the current year may settle tax liabilities due by 31 st December of the previous year (hereinafter referred to as debt) through compensation. Article 2 A debtor who also has claims on the budget of the Republic of Serbia may, through bilateral compensation, settle the debt by submitting a request for payment of debt through compensation (hereinafter referred to as application) under the conditions that: 1) According to compliance of accounting documentation defining obligations of the budget of the Republic of Serbia (hereinafter referred to as budget) against the debtor which is at least twice the total debt that can be settled through compensation. 2) Subject to compensation, debt that is public revenue of the budget to the amount that belongs to budget. If the debt is made up of taxes that are shared between the budget and the budgets of territorial autonomous provinces and local self-governments (hereinafter referred to as another participant in the distribution of ), the borrower is required to pay part of the debt that belongs to another participant in the distribution. Article 3 The debtor submits request to the Ministry of Finances and Economy Department of Treasury (hereinafter referred to as Treasury). Together with request, the following documentation has to be submitted: 1) Certificate of Obligation on COO Form Certificate of Obligation, certified by the budget users (hereinafter referred to as user) that has an obligation to the debtor, along with documentation proving grounds for debt; 2) Proof of Debt on COD Form Certificate of Debt, certified by the authorized organizational unit of the Tax Administration (hereinafter referred to as organizational unit) according to the residence of debtor; 3) Completed Statement of Compensation, in four copies, certified by the debtor on SOC Form Statement of Compensation of mutual debts and claims; 4) Filed an order at the cost and the benefit of appropriate public payment account; 5) Completed and verified account on charge and the benefit of your account.

2 Forms COO Certificate of Obligation, COD Certificate of Debt, SOC Statement of Compensation of mutual obligations and receivables, are printed within this regulation and form an integral part of. Article 4 User and tax administration organizational unit will certify COO Form and COD Form, within seven working days from the receipt. Article 5 Upon accepting the request and meeting the requirements prescribed in Article 2 of this Regulation, within seven working days from receipt of documents as described in Article 3 of this Regulation (hereinafter referred to as documentation), the Treasury certifies SOC Form and it turns out the orders for the calculation of the cost and the benefit of the budget. Article 6 Compensation can not be made within 30 days from the date of the certification of SOC Form. If the borrower does not realize compensation, within the period referred to in paragraph 1 of this article, it is considered as not approved, and the deadline for its implementation can be extended. Article 7 Treasury shall submit the documentation of the Administration for Public Payments (hereinafter referred to as Administration) to implement the compensation. Article 8 Upon receipt of documentation, the Administration shall notify the debtor of the amount of debt that has been approved for compensation, and if part of the debt belongs to another participant in the distribution and the amount of debt that belongs to that user, with a request to present evidence on the settlement. Article 9 Administration, based on the documents and the receipt of evidence of payment of debt belongs to another participant in the distribution, executes the calculation on the charge and in favor of the budget, and appropriate invoices for the payment and record the changes made in the report on gross collection revenue, completed returns, allocated and unallocated public. After order for calculation has been proceed, Administration will provide a debtor with a copy of SOC Form together with the receipts and copies of order for calculation in charge and in favor of the budget and payment account. The debtor is required to carry out calculation and settlement through its account and to provide the proof of registration to the organizational unit, with the documents referred to as in paragraph 2 of this article. Article 10 The debtor may, by compensation, in accordance with this Regulation, pay and settle the debt that belongs to other participants in the distribution revenue, by filling the requirements from Article 3 of this Regulation to the competent body of territorial autonomy or local self-government in charge for Finances, that if the requirements from Article 5 of this Regulation are met, the documentation shall be submitted to Administration to implement the compensation.

3 Article 11 Statement verified by both participants in the compensation forms an integral part of accounting records based on which proper accounting record is performed in the accounting books of compensation participants. Article 12 This regulation shall enter into force eight days after publication in the "Official Gazette of the Republic of Serbia ". Republic of Serbia COO Form Certificate of Obligation (The name of budget funds user) (Place) (Date) CERTIFICATE OF OBLIGATION I. NAME AND ADDRESS OF THE TAX DEBTOR: (Name) (Address ) (TaxIDNo.) II. COMMITMENT TO DEBTORS: Basic Payables: Division: Head: Function: Economical classification: The amount of debt: In Belgrade, year AUTHORISED User of budget funds

4 Republic of Serbia Ministry of Finances and Economy Tax Administration Authorized Organizational Unit CERTIFICATE OF DEBT COD Form Certificate of Debt Name and address of tax debtor: (Name) (Address) TAX ID NUMBER: Banks in charge of the current accounts: The Tax debt by type, amount, and commitment to budget: Type belongs to the budget of the Republic of Serbia Another participant in the distribution belongs to other participants in the distribution of public Total Amount Account for the payment In Belgrade, year Verified by: Authorized Organizational Unit

5 SOC Form Statement of Compensation STATEMENT OF COMPENSATION MUTUAL LIABILITIES AND CLAIMS I. PARTICIPANT (Budget Funds User) Account No: Division: Head: Function: Economical classification: The amount of obligation to another party (Amount) In Belgrade, year II. УЧЕСНИК Name and address of the tax debtor: (Name) (Address) TAX ID No: Place of Stamp Place of Stamp SIGNATURE VERIFIED BY _ I. PARTICIPANT TREASURY Bank in charge of the current accounts: The Tax debt by type, amount, and commitment to budget: Type belongs to the budget of the Republic of Serbia In Belgrade, year Another participant in the distribution belongs to other participants in the distribution of public Total Amount Account for the payment Verified by: II. PARTICIPANT - TREASURY

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