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Serbia Adopts a New Package of Economic Measures

Serbia Adopts a New Package of Economic Measures

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According to the newly adopted package of COVID-19 economic measures, financial aid will be provided to Serbian companies registered between 15 March 2020 and 20 July 2020, which were not able to apply for fiscal benefits from April this year. The measure is introduced by Conclusion of Serbian government 05 No. 401-6052/2020 (“Conclusion”). These companies may receive direct aid in one tranche in September, in the amount of 120% of the minimum wage for March (approx. EUR 300) for each employee. These funds can be used until 31 October 2020, and only for the purpose of employees’ salaries.

Direct Aid and Tax Reliefs

In addition to direct aid, another benefit is that the payment of social security contributions and salary tax for salaries paid in August may be deferred to 5 January 2021. In order to apply for both of these benefits, these companies need to fill in the relevant boxes in the tax return for withholding taxes for salaries for August (Form PPP-PD) and submit it by 15 September the latest.

Same benefits under the same conditions are available to companies that were founded before 15 March 2020, and which, although eligible, did not use the benefits provided by the Regulation from April this year.

The companies that already used the benefits under the Regulation received direct aid in August and they will receive final instalment in September in the amount of 60% of the direct aid, which was paid to them in July 2020.

Companies that reduced the number of employees by more than 10% in three months after the receipt of the last payment of direct aid, lose the right to financial aid and will be obliged to return received funds with interest.

Benefits to Hotel Industry

On 21 August 2020, the Ministry of Finance announced that hotels, which are among businesses that suffered the most during the recent months, will receive a one-off direct aid of EUR 350 per bed, and an additional EUR 150 per accommodation unit.

Hotels may receive this aid under condition that no more than 10 percent of their employees is laid-off by the end of the 2020.

The entire program related to the benefits to the hotel industry will be implemented through a public invitation, which is expected to be published in the following days.

By Branimir Rajsic, Senior Consultant, Karanovic & Partners

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