How to correctly invoice a foreign client, which exchange rate to use, what to put on the invoice and how to report foreign-currency revenue.

Invoicing foreign clients: the foreign-currency invoice step by step

Freelancers working for foreign clients must follow specific rules when invoicing and reporting revenue.

Mandatory elements of a foreign-currency invoice

The invoice must contain:

the name and address of your business (entrepreneur's name, address, PIB — tax identification number)
the client's name and address
the invoice number and date
a description of the service (preferably in English)
the amount in a foreign currency (EUR, USD, etc.)
a VAT note (if you are not in the VAT system: "PDV nije obračunat" — VAT not charged)
the bank account number for payment

Which exchange rate to use?

Foreign-currency revenue is converted to RSD at the NBS (National Bank of Serbia) middle exchange rate on the invoice issue date. You can find the rate on the NBS website or in the app.

Reporting the revenue

Foreign-currency revenue is recorded in the KPO knjiga (revenue ledger) in its RSD equivalent. The entry date is the date the payment arrived in your foreign-currency account.

Foreign-currency account

For collecting payments from foreign clients, it is recommended to open a foreign-currency account at a commercial bank. Domestic banks offer foreign-currency accounts for entrepreneurs.

Taxes on foreign-currency revenue

Foreign-currency revenue is taxed in the same way as dinar revenue. There are no special reliefs and no higher rates for income from abroad.

Contract with a foreign client

It is recommended to conclude a Service Agreement that clearly defines the scope of work, the amount and the payment terms. The contract can be in English.