Following the positive trend of countries all over the world that are taking wide range of economic measures to cushion, as much as possible, the negative effects of Covid-19 pandemic for their people and their affected economies, recently Serbia started implementing its aid package in the approx. amount of EUR 5.1 billion.
Newly adopted measures are mainly aiming their attention on:
Below is more detailed overview of the most significant elements of the adopted measures.
Legal entities, branch and rep. offices of the foreign legal entities included, as well as sole-proprietors may defer payment of salary tax and social security contributions for the months of March, April and May 2020, until January 4th 2021.
The above-mentioned entities may also defer corporate income tax advance payments for the months of March, April and May 2020 until the submission of the final corporate income tax return for 2020. All these measures apply accordingly to the sole-proprietors.
Both, deferred tax and social security contributions and corporate income tax can be paid in monthly instalments (starting from 2021 in up to 24 instalments).
Moreover, sole-proprietors and legal entities classified as micro, small and medium-sized companies who applied for deferral of tax liabilities will also receive benefit in the form of direct payment in the amount of minimum net salary (cc EUR 300) for three months per employee, while large legal entities are entitled to direct aid in the amount of 50% of minimum net salary for those employees whose employment is stopped in line with the Labor Law (they are still employed, but receive only the reimbursement in the amount of 60% or 65% of full salary).
Furthermore, VAT shall not be calculated and paid for the supply of goods or services performed free of charge by a VAT payer to a publicly owned health institution as well as to the Ministry of Health, while a VAT taxpayer has the right to deduct input VAT.
Banks, insurance and reinsurance companies, voluntary pension funds management companies, financial leasing providers as well as payment institutions and electronic money institutions do not have the right to defer tax liabilities and payment of grants.
Additionally, every adult citizen of Serbia shall receive the support in the amount of EUR 100 net.
The Regulation refers to support to the economy through the Development Fund, which is a measure to preserve liquidity, and then maintaining the stability of the financial and economic system. The Development Fund foresees RSD 24 billion for granting loans which will be approved for a period of 36 months, with a grace period of 9 to 12 months and an interest rate of 1%. Loans are approved and paid back in dinars.
According to this program, beneficiaries of funds include sole-proprietors, cooperatives, micro, small and medium-sized companies that are mostly privately owned or cooperative and which performing services from production, service, trade and agricultural activities.
The Regulation defines more precisely the conditions that beneficiaries must fulfill in order to qualify for the use of funds.
The minimum loan amount:
The maximum loan amount:
The Regulation provides the simplification and shortening of the procedure for issuing debt securities, as well as a significant reduction of costs of issuing debt securities.
The Regulation applies to all situations when a company has made a decision to issue debt securities during a state of emergency in the Republic of Serbia, or within 180 days from the date of termination of a state of emergency.
Along with other measures which were taken before the above-explained (moratorium on the repayment of loans, decreased interest rates, etc.) the Government of Serbia has established the base which should help companies to survive crisis and save work places. Of course, it is yet to be seen how these measures will be implemented and if the economy will be able to recover and overcome crisis in the foreseeable future.
In case you have any questions regarding described measures, Crowe Team will be glad to answer them.