Amendment of the Decree on Fiscal Benefits and Direct Payments

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Amendments to the Decree on Fiscal Benefits and Direct Benefits to Private Companies and Financial Assistance to Citizens to Mitigate the Economic Consequences of COVID-19 Disease were published in the Official Gazette of the RS, no. 60 of April 24, 2020.

The changes are as follows:

  • Article 9

June tranche of direct payments – the number of employees is also reduced by the number of employees who ceased working with the company from April 10, 2020 to April 30, 2020.

July tranche of direct payments – the number of employees is also reduced by the number of employees who ceased employment with the business entity from May 1, 2020 to May 31, 2020.

The economic entity referred to in this Article shall be obliged to use the received funds from direct benefits by 15 August 2020 at the latest, thus permitting the payment of wages in full from its own funds before the receipt of direct payments.

  • Article 10

Number of employees for whom large legal entities have direct benefits in June – in the amount of the product 50% of the basic minimum net salary for March 2020 and the number of employees referred to in paragraph 1 of this Article increased in accordance with paragraph 2 of this Article, for whose remuneration the employer – a large legal entity submitted the PPP-PD Form for April 2020, for which the decision on termination of work applies for at least 15 working days in the month of April 2020.

Number of employees for whom large legal entities have direct benefits in July – in the amount of the product 50% of the basic minimum net wage for March 2020 and the number of employees referred to in paragraph 1 of this Article increased in accordance with paragraph 2 of this Article, for whose remuneration is the employer – large legal entity has submitted the PPP-PD Form for May 2020, for which the decision on termination of work relates to at least 15 working days in the month of May 2020.

The large legal entity referred to in this Article shall be obliged to use the funds received from direct benefits by 15 August 2020 at the latest.

  • Article 12

Repayment of direct payments with accrued interest is made to a special purpose account opened for this purpose with the Ministry of Finance – Treasury Department.

  • Article 16

Dividends, for the purposes of this Article, shall mean all payments made to their owners by a company on the basis of their ownership of the stocks or shares of that company.

  • Article 19a

Business entities in the private sector which, in the period from the date of entry into force of the Rulebook on the list of users of public funds 26.12.2019. (Official Gazette of RS, No. 93/19), as of the date of entry into force of this Decree, deleted from the List of users of public funds from the Register of users of public funds, maintained as an electronic database with the Treasury Directorate, are entitled to opening a special purpose account referred to in Article 13, para. 2 and 3 of this Decree, as well as fiscal benefits and direct payments under the conditions laid down in this Decree.

New deadlines for submission of financial statements and tax return

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Government of Republic of Serbia has adopted Decree regulating delay of deadlines for submission of annual and consolidated financial statements of companies, cooperatives, other legal entities and entrepreneurs, as well as deadlines for filing company and self-employment income tax returns.

The deadline for submission of annual financial statements with the auditor’s report for all taxpayers whose reporting is regulated by the Capital Markets Law, the Law on Investment Funds or the Law on Alternative Investment Funds with a Public Offering, is extended to 60 days from the date of termination of the state of emergency.

For reporting that is governed by the Accounting Law, the period for the regular annual financial statements is postponed for 90 days from the date of termination of the state of emergency. The deadline for the consolidated financial statements is moved to 120 days from the date of termination of the state of emergency.

The deadlines for filing corporate income tax and self-employment income tax returns are postponed for  90 days from the end of the state of emergency, for legal entities whose tax period is equal to the calendar year, that is, for 120 days for taxpayers of corporate income tax whose tax period is different from the calendar year.

Persons liable to tax on self-employed income keeping business books in accordance with Article 43, para. 2 and 3 of the Law on Personal Income Tax, file a tax return within 90 days from the date of termination of the state of emergency.

Prescribed Form for presenting information on persons for whom a large legal entity is entitled to the payment of direct benefits

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The Government of the Republic of Serbia adopted the Rulebook on the Contents of the Form for presenting information on persons for whom a large legal entity is entitled to the payment of direct benefits, which entered into force on 15.04.2020.

The Rulebook prescribes a Form for presenting information on persons for whom a large legal entity is entitled to the payment of direct non-refundable payments referred to in Article 10 of the Decree on fiscal benefits and direct payments to companies in private sector and financial aid to citizens in order to mitigate the economic consequences caused by disease covid-19.

Decree governing the financial support program was adopted

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On 10.04.2020. a Decree was adopted to mitigate the economic consequences of pandemic. The program defined in this Decree relates to the granting of credit facilities to business entities for liquidity management and working capital.

Board of Directors of Development Fund (Fond za razvoj), in accordance with this program, will determine the more detailed criteria and conditions under which loans for maintaining current liquidity will be approved. The criteria and conditions will come into force when the Government gives the consent.

Deviation from the established criteria and conditions defined by this program is possible in justified cases in which there is a special interest of the Republic of Serbia, which shoul be determined by the Government’s conclusion.

You can read more about it here.

Decree on fiscal benefits

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Government has adopted the decree on fiscal benefits and direct payments to companies in private sector and financial aid to citizens in order to mitigate the economic consequences caused by disease covid-19 in order to mitigate the economic consequences of pandemia.

You can read more in our Tax Alert on this subject which you can find on this LINK.

Conclusion of the Government of Serbia regarding holiday leave

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The Government of Serbia has issued a Conclusion recommending employers in the territory of the Republic of Serbia to enable those who are obliged to perform regular work duties in state of emergency, to use the holiday leave for 2019 by the end of 2020.

During state of emergency, for those employees who are allowed to perform activities outside the premises of the employer (working remotely and working from home), the employer is obliged to enable the use the holiday leave for 2019 in accordance with the law, ie as of 30.06.2020.

It is recommended for employers who, in state of emergency, are unable to organize the work process, to give advantage to use of holiday leave.

Qualified newly employed status and continued self-employment

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According to the opinion of the Ministry of Finance RS No. 430-00-44 / 2020-04 dated 12.02.2020 when, after having been employed and having acquired the status of a qualified new employee in accordance with the conditions laid down in Article 21ž of the Law, that person continues to pursue an self-employment activity as an additional activity, that circumstance does not affect his status as a qualified new employee acquired by establishing an employment relationship within the statutory period, and by changing the basis of social insurance.

Employee movement during curfew

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Business entities are obliged to issue to each employee who performs his / her tasks from 5pm  to 5 am, and for which an agreement has been obtained, that it is exempted from the implementation of the Order on the Prohibition and Restriction of Movement of Persons in the Territory of the Republic of Serbia. The form of this confirmation can be downloaded from this link.

An employer who has up to 100 employees in a shift that lasts during the period of prohibition of movement issues a certificate on a daily basis, while an employer that has more than 100 employees in a shift that lasts during the period of prohibition of movement issues a certificate on a weekly basis for each employee for whom obtained consent of the Ministry of the Interior to be exempt from the application of the said order.

Starting from March 28, 2020, at 5 pm, when checking the observance of the Order on the Prohibition and Restriction of Movement of Persons in the Territory of the Republic of Serbia, the Ministry of Interior’s representatives ask for a Certificate issued by the employer, which will be valid only if the person is located in the database of the Ministry of the Interior and for which it was obtained that they were exempted from the implementation of the Order on Prohibition and Restriction of Movement of Persons in the Territory of the Republic of Serbia.

The Ministry of Interior will also accept certificates in electronic form (scanned receipt on phone, tablet, etc.).
Requests related to the issuance of movement permits between 5 pm and 5 am are submitted by economic entities through the Ministry of Economy to the email address [email protected]

Announced set of measures by the Government of Serbia to help the economy

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The Serbian government has announced a set of measures to help the economy. An official legislation and a full implementation guide are expected in the next 10 days. Furthermore, the announced measures will help companies that have laid off less than 10% of employees The following measures are announced:

  1. Postponing of payment of due tax liabilities, with subsequent repayment in installments for at least three months, for following taxes:
    – payment of taxes and contributions for at least three months (employers who choose to use this measure may use deferral of payment of taxes and contributions to earnings until January 2021, and thereafter there is a possibility of further deferral of payment of these taxes and contributions up to 24 months without obligation to pay interest, at the request of the taxpayer)
    – postponing of payment of the income tax advance (in the meantime, companies may file a periodic tax balance and tax return to reduce the monthly advance if significant changes in the taxpayer’s business have occurred in the current year)
  2. Exemption from VAT for donations (exemption for donors from the obligation to pay VAT means that donors who donate their products and goods to institutions directly involved in activities aimed at preventing the spread and treatment of citizens from Covid-19 will be exempt from VAT for that turnover)
  3. Payment of three minimum wages for entrepreneurs, micro, small and medium enterprises for each employee. The state will pay minimum wage support for entrepreneurs, micro, small and medium-sized enterprises in the private sector for each employee. The minimum wage is about 31,000 RSD, so a total of about 93,000 RSD per employee will be paid. Companies can expect the state to pay them the first third of the funds mid-May, the second half in June, and the third half in July. Companies will be required to pay this money to employees. Large companies whose employees are sent on forced leave will receive subsidies of 50% of minimum wage due to reduced business volume or complete shutdown.
  4. Corporate bonds. It is one of the ways in which large enterprises can count on the state support. Given the complicated legislation, changes to legislation are to be made
  5. Preferential loans and guarantee schemes in order to maintain liquidity during and after the state of emergency:
    – Program for granting favorable loans with 1% interest through the Development Fund of the Republic of Serbia, for maintaining liquidity and working capital for entrepreneurs, companies classified into micro, small and medium-sized legal entities, agricultural households and cooperatives
    – Guarantee schemes for business support for loans for maintaining liquidity and working capital for entrepreneurs, companies classified into micro, small and medium-sized legal entities, agricultural holdings and cooperatives. Guarantee schemes will refer to loans granted by commercial banks, and practically the state will guarantee these loans.
  6. Payment of direct assistance in the amount of 100 EUR in RSD equivalent to all adult citizens of Serbia, upon termination of the state of emergency