ECONOMIC MEASURES OF THE GOVERNMENT OF THE REPUBLIC OF SERBIA AS…

After declaring the state of emergency on the territory of the Republic of Serbia on March 15 2020, the Government of the Republic of Serbia announced the adoption of the economic measures package for reducing the negative effects on the Serbian economy caused by the Covid-19 pandemic.

The announced measures came into force on April 10 2020, after the Government’s adoption of three regulations: 

1. Regulation on fiscal incentives and direct grants to the private sector and assistance to all citizens with aim to reduce negative effects on the economy caused by the Covid-19 pandemic (,,Official Gazette RS” no 54/20); („Službeni glasnik RS“, br. 54/20);
2. Regulation on establishing Economic Measures Program for private sector for preservation of liquidity in difficult conditions caused by the Covid-19 pandemic (,,Official Gazette RS” no 54/20); („Službeni glasnik RS“, br. 54/20);
3. Regulation on procedure for issuance debtors securities (,,Official Gazette RS” no 54/20).

In the text bellow you may find information how to use the rights on fiscal incentives and direct grants in accordance with Regulation on fiscal incentives and direct grants to the private sector and assistance to all citizens with aim to reduce negative effects on the economy caused by the Covid-19 pandemic (hereinafter: the Decree).

I Who can benefit from the adopted measures?

Measures stipulated Uredbom with the Regulation were adopted in favor of the private sector entities,i.e. resident legal entities, resident entrepreneurs, as well as branches and representative offices of the foreign legal entities, who fulfil the following conditions:

1. that they were founded and registered before the competent institution before the proclamation of the state of emergency, i.e. that they become VAT payers before the proclamation of the state of emergency;
2. that from March 15 2020 to the day of coming in force of this Regulation, number of their employees was not reduced for more than 10% (beside employees with established fixed-term employment relationship).

Measures are applicable to entrepreneurs, agricultural entrepreneurs and flat-rate tax entrepreneurs who registered temporary termination of the professional activity not earlier than March 15 2020.

From benefiting from adopted measures excluded are certain forms of large legal entities: isključene su određene forme velikih pravnih licabanks, insurance and reinsurance companies, voluntary pension fund management companies, financial leasing companies, payment institutions and electronic money institutions.

II What is stipulated with these measures?

1. Fiscal incentives

Za navedene privredne subjekte propisane su određene fiskalne mere, koje se ogledaju u uvođenju delayed deadlines for::

1. salary tax and social security contributions salaries until January 4 2021, and
2. corporate income tax installments for March, April and May 2020 until submission of final tax report for corporate income tax for the relevant tax period.

When the listed public incomes mature, their payment could be delayed for further 24 months without interest.

2. Direct grants

Regulation prescribes direct grants for the business entities, as they will have a possibility to be entitled with non-refundable cash grants.Realization of this right depends on the division of the legal entities as stipulated with Law on Accounting, and the given funds can be used exclusively for the payment of salary and compensation of salary of employees.

This means that on one side we have entrepreneurs, micro, small and medium companies, who have a right on the non-refundable cash grants in the amount of the minimal salary for March, April and May 2020 for all employees with full-time employment (for whom the Registration is submitted in accordance with the Regulation).

On the other side, large companies have a right on the non-refundable cash grants the SL Form – list of individuals for who the large company has a right on non-refundable cash grants, which shall be submitted by the large company in order to be entitled with the right on the direct grants, in two copies – one for the tax authority and one for the Ministry of Finance – Treasury Administration.

With special Rulebook („Official Gazette RS“ no. 56/20) prescribed is the SL Form – list of individuals for who the large company has a right on non-refundable cash grants, which shall be submitted by the large company in order to be entitled with the right on the direct grants, in two copies – one for the tax authority and one for the Ministry of Finance – Treasury Administration.

III How to be entitled with right on fiscal incentives and direct grants?

It is necessary that the legal entities submit the individual tax registration on accrued taxes and contributions for employment income,, i to najkasnije not later than end of April 2020, in which case they will have benefits for all three months, i.e. by the end of May of June 2020, in which case they will have benefits for two or one month. In the registration, in the field of date of submitting it is necessary to fill in the date January 4 2021.

All business entities will be assigned with a special bank account, for the payment of the cash funds, in the bank in which the company already has bank accounts opened. Companies with more than one bank account have to report until 25th April to the tax authority in which bank this special account (only if you have bank accounts opened in more than one bank);.

IV What more regulations shall business entities meet in order to keep the right on the proscribed measures?

Business entities may lose the right on the proscribed measured if they reduce the number of employees for more than 10% in the period from March 15 2020 until the expiration of three months from the day of the last payment of the direct grants.

For business entities who decide to use the benefits from the Regulation, payment of dividend at any time until the end of 2020 is forbidden.

Please note that Regulation prescribes very high misdemeanor sentencesfor the business entities who do not comply with stipulated, as well as the obligation to return the received funds with interest.

V If you are one of the listed business entities and fulfill all the conditions required for the realization of fiscal incentives and direct grants , you shall take the following steps:

1. Report until 25th April to the tax authority in which bank this special account should be opened (only if you have bank accounts opened in more than one bank);.

2. submit the individual tax registration on accrued taxes and contributions for employment income, not later than end of April 2020 (i.e. end of May or June 2020 when the benefits shall be met).