The amendments came into force on July 25, 2005. The VAT Law previously required NGOs to pay VAT on the import of humanitarian goods and allowed for a rebate. This had an adverse impact on the flow of foreign humanitarian aid to Serbia. On behalf of the Federation of NGOs - an umbrella group composed of local NGOs the International Center for Not-for-Profit Law (ICNL) provided specific recommendations on this and other issues in the VAT Law relating to the status of foreign humanitarian aid. While the amendments fell short of embracing ICNL's recommendation that the purchase of internal goods and services rendered to foreign donors be also exempt, they nevertheless represent a significant step toward creating a more enabling fiscal environment for foreign donors operating in Serbia.
