On 30 July 2020, the Government of the Republic of Serbia adopted a decision on direct payments and fiscal benefits for economic entities in private sector, with a view to mitigate economic consequences of COVID-19.
What are the measures?
This package implies the payment of two 60% minimum salaries per employee, as well as delay of obligation to pay salary taxes and contributions for one month.
Implementation of measures will start immediately, so that the first RSD 18,220.00 (approx. EUR 155.00) will be paid to special COVID-19 accounts of employers by 10 August, whereas the second payment is due in September.
All micro, small and medium economic entities who received direct payment in July will be automatically registered for direct payments i.e. they will not have to re-apply.
Payment will be effected to the already opened COVID-19 accounts, whereas direct payments can be used exclusively for salaries and salary contributions of employees.
Newly established economic entities
Micro, small and medium economic entities that were established from 16 March until 20 July, inclusive, will have to apply for measures considering that they were not eligible for the first package of assistance.
They will receive a lump-sum direct payments in September in total amount of 120% of minimum salary per employee. All they have to do is to submit tax application PPP – PD by 15 September, with indicated tax and contribution maturity on 5 January 2021.
Under the same conditions, the right to direct payments can be exercised by other entities that have not applied for the first package of assistance, and which meet the requirements from the respective Regulation.
The entrepreneurs who were registered from 16 March until 20 July, inclusive, and who are not obliged to submit PPP-PD tax application according to relevant tax regulations will receive lump-sum direct payment in September, without any additional engagement.
Special purpose accounts will also be opened for these entities.
Large legal entities
Large legal entities that are thus categorised according to financial statements for 2018 will receive direct payments if they provide a list of persons that are eligible for payment of grants for June and July by 15 August.
They shall be subject to the same rules as so far i.e. they will receive 50% of minimum salary per employee who had work suspension of minimum 15 working days in the given two months.
Delay of obligation to pay taxes and contributionsLiabilities based on taxes and contributions on employees’ salary and salary compensation as well as personal salary of entrepreneurs, for the accounting period August 2020, have been postponed until January 5, 2021.The same applies to the obligations based on taxes and contributions for flat-rate entrepreneurs who used the first package of assistance, which fall due in August 2020. Flat rate entrepreneurs who did not use the first package of assistance will be able to delay their payment obligation due in September 2020.The maturity of the advance payment of taxes and contributions for entrepreneurs who used the first package of assistance, which is due for payment in August 2020, is postponed until the day of submitting the final tax return for 2020. The payment obligation for entrepreneurs who did not use the first package of assistance, which is due in September 2020, will be postponed until the same deadline.
Requirement for application of measures
Employers are obliged not to reduce the number of employees by more than 10% in the period of three months following the last direct payment i.e. by the end of 2020.
Deadline for using the funds
Economic entities will be obliged to use the received payments by 31 October this year. After the expiry of this deadline, special purpose accounts will be closed and the unused funds returned to the budget.
What to do if you do not wish to use additional funds?
If economic entities do not wish to use these funds i.e. they cannot meet the obligations arising from such payments, they need to leave the funds on special purpose accounts and after expiration of deadline for using the funds they will be withdrawn from the accounts and returned to the budget.
This article is to be considered as exclusively informative, with no intention to provide legal advice.
If you should need additional information, please contact us directly.
By Ivana Ruzicic, Partner, and Natalija Dukic, Associate, PR Legal
