How to Unblock Tax Identification Number

There are different ways for the tax administration in Serbia to force the tax debtor to settle his debt in the end.

In situations when the state is your creditor, even when the law nominally puts you in an equal position, it is clear that this is not really the case.

Starting from the doctrine of state authorities, the socialist heritage and the still existing awareness of citizens about the supremacy of the “public” over the “private”, state authorities are not uncomfortable to use it at all (some would even say abuse).

Law on Tax Procedure and Tax Administration* (“Law“) prescribes the possibilities of the tax administration for forced collection of tax debt.

One of the legal ways to force a tax debtor, whether a individual or a legal person, to settle a tax debt, is to confiscate the Tax Identification Number (“TIN”) of the legal entity.

When can a TIN be revoked?

In order for your TIN to be revoked, you must first be granted with a TIN, either as an entrepreneur, legal entity, permanent establishment of a non-resident legal entity or a fund.

The Law on the first place prescribes that TIN cannot be granted in situations when:

1) a legal entity whose founder or member (hereinafter: founder) – a legal entity, entrepreneur or individual has due and unsettled obligations based on public revenues arising in connection with the performance of activities, or if the legal entity or entrepreneur is temporarily deprived TIN in accordance with this Law. It is not possible to grant a personal identification number to a legal entity whose founder is a legal entity, entrepreneur or individual who is also the founder of an entity whose TIN has been temporarily revoked, in accordance with the Law;

2) a legal entity whose founder is an individual who is at the same time the founder of another legal entity that has outstanding obligations based on public revenues related to the performance of activities;

3) a legal entity resulting from a status change of allocation with establishment, or mixed allocation in accordance with the law governing companies, or status changes of special forms of organization, if the legal entity, as well as the fund which is the subject of division has outstanding liabilities based on public revenues, or if its TIN was temporarily taken away in accordance with the Law;

4) an entrepreneur who has due but unpaid obligations on the basis of public revenues, arising in connection with performing activities in other legal entities in which he is also the founder with a share of more than 5%, or if his TIN is temporarily taken away in accordance with the Law.

Given that most legal entities are granted TIN through the Business Registers Agency, the Law says that on that occasion, TIN will be granted within the legally prescribed very short deadline and that no prior verification of the fulfillment of the above mentioned conditions will be performed.

Therefore, if the tax administration in the control procedure, or in the verification procedure on the basis of data from official records, determines that at the time of the TIN issuance there were enumerated obstacles to the issuing of TIN, the tax administration will temporarily revoke the assigned TIN.

Unbound of the tax debt, the tax administration has the right to revoke your TIN on the basis of data from its records and records of other competent authorities when it determines that the TIN application contains data that are not credible or finds a prohibition to perform activities in misdemeanor or criminal proceedings. The most common such example is when the tax administration determines that the seat of the legal entity is fictitious, because the delivery of the sent letter to the address of the seat remained unsuccessful.

Therefore, these are the only reasons why TIN can be revoked and they must be prescribed by the Law.

What are the consequences?

With the decision, the tax administration will temporarily confiscate the assigned TIN – until the observed disturbances are eliminated, and a copy of the decision will be delivered to the bank and the organization responsible for forced collection of funds on the taxpayer’s account. Your company’s bank accounts will be blocked, and you will not be able to issue invoices. In any case, your company will be completely blocked and excluded from any type of legal traffic.

What to do next?

As the Law says, the TIN is temporarily confiscated by a decision – until the perceived disturbances are eliminated. Although this may sound like a temporary condition at first reading, this situation can last quite long.

If the reason for confiscating TIN is a tax debt, as it is the most common case, it is necessary to first inspect the structure of debts, to check whether certain claims are obsolete or incorrectly recorded, and accordingly submit appropriate requests to the competent tax administration branch according to the headquarters of your company. Especially, if the mentioned procedures are necessary for the conclusion of the reprogramming of the tax debt, which, along with the settlement of the tax debt, is another way to eliminate the reasons for the TIN confiscation.

Considering that your entire business is blocked and in addition to tax debt, losses are accumulating, you need to act quickly, accurately and most importantly – persistently!

After eliminating the reasons for confiscating the personal identification number, it is necessary to submit a request to the tax administration (also to the competent branch), for a decision by which the TIN is returned. Although in the described situation, it may sound again that it is a formality, the mentioned persistence is necessary for the stated solution too. The Law does not prescribe a specific deadline for the return of TIN. Consequently, the head office of the tax administration that decides on the submitted request has a general deadline of 30 days to resolve your request, which can be extended for another 30 days.

However, although it often doesn’t seem that way at the beginning of a business, it is much better to invest time, effort, and even money if necessary, in personal legal security and legal security of the entire business, in order to have clear and happier possibilities without pressure of losses and debts. Taxes, of course, must be paid.

*Law on Tax Procedure and Tax Administration (“Official Gazette of RS”, No. 80/2002, 84/2002 – amended, 23/2003 – amended, 70/2003, 55/2004, 61/2005, 85/2005 – other law, 62/2006 – other law, 63/2006 – amended other law, 61/2007, 20/2009, 72/2009 – other law, 53/2010, 101/2011, 2/2012 – corrected, 93/2012, 47/2013, 108/2013, 68/2014, 105/2014, 91/2015 – authentic interpretation, 112/2015, 15/2016, 108/2016, 30/2018, 95/2018 , 86/2019 and 144/2020)