Measures for economic stimulation of legal entities in Serbia due to emergency
Apr 20, 2020
Apr 20, 2020
The Minister of finance and the president of the Chamber of commerce and industry of Serbia presented a new package of economic measures and the support program for the economy. The package of measures consists of help for companies and the entrepreneurs providing tax reliefs, financial help, measures for maintaining liquidity and other measures. The financial help for the economy consists of support and help for paying salaries to employees or for worker’s salaries.
New economic measures have two basic goals:
Having in mind that the economy is most affected, the new economic measures are mostly dedicated to companies or micro, small and medium enterprises in the private sector, as well for the entrepreneurs.
The package of economic measures consists of 4 parts:
The economic measures have a goal to moderate the negative effects on the state economy that happened as the consequence of COVID 19 pandemic. The total value of the economic package is 5,1 billion euros. It is expected that the Government of the Republic of Serbia will adopt the act and bring the legal frame for realisation or carrying out the program of economic help in the next ten days.
The measures of the tax politics consist of:
The measure of postponing of paying taxes and contributions for the private sector is related concretely to the postponement in paying due taxes and the possibility that these due tax commitments are later paid in installments. Additionally, this measure includes the postponing of paying the income tax from the independent activity for the entrepreneur and it is related to all entrepreneurs.
Companies or legal entities and the entrepreneurs will have the possibility to postpone the payment of income tax and contributions during the emergency state. They can pay all the accumulated tax commitments afterward in installments until the beginning of 2021.
The employers who chose this kind of measure for postponing the payment of income tax and contribution will be able to use this postponement for paying accumulated tax expenses until the beginning of 2021.
After that, the companies have to possibility of postponing the payment of tax expenses, without any rates for at most 24 months. If they use this measure, the employers won’t have to pay the rates on the taxpayers’ demand.
Previously mentioned measures are the same for all the employers, regardless of their economic power (and under the condition that the measures are applicable).
The second tax measure is related to postponing the advance payment for income tax in the second quarter. The taxpayers will have the option to postpone the advance payments for income tax for 2020, which is regularly due for payment in the second quarter of 2020. The conditions for applying this second tax measure are the same for all the taxpayers, regardless of the economic power of the company that uses this tax relief.
The third tax measure is related to relief from paying the VAT and it can be used by the donators.
In other words, the donators (of their product) will be relieved from paying the VAT.
Those companies (economic subjects) that donate their products to all the facilities that are involved in the prevention of disease spreading and patient treating will be relieved from the commitment of paying the VAT. The products they donate are those products they usually distribute.
The second set of measures of direct help to the economy is related to giving direct help to the companies during the emergency state. This help consists of two measures:
This measure relates to the help in terms of paying minimal salaries for all the employees in micro, small and medium enterprises, as well as paying minimal salaries for the entrepreneurs. When it comes to the entrepreneurs, the direct help goes to the flat-rate entrepreneurs (those who pat flat-rate taxes) as well as to the entrepreneurs who pay the income tax.
The help paid for the employees will be in the amount of minimal salaries for three months. This means three minimal salaries for every employee during the emergency state that will be paid directly to the employee’s bank account.
The help in the amount of 50% of net minimal salary for those employees whose termination is determined by certain decisions.
The employees whose termination is determined by certain decisions, or the employees sent on leave because of the decrease in volume of work or complete work stoppage, will get the help in the amount of 50% net minimal salary. This measure is applied for companies that are classified as large or it is for those who are employed in large companies. Here the termination is considered temporary, not as the full termination.
The goal of this measure is to unburden the employers or legal entities and that the state takes its share of the burden when it comes to workers’ salaries. The help is defined according to the number of employees that the employers keep in work relation, but who are temporarily unnecessary.
During the emergency state in the Republic of Serbia, the package of economic measures can’t be applied for all legal entities. The measures aren’t applied for:
The third measure is presented with the goal to keep the liquidity of companies in the conditions of the economic crisis (which is expected after the end of emergency state and it can have a negative influence on the economy of the Republic of Serbia). It consists of two measures:
The program of financial support from the Development fund of the Republic of Serbia during the COVID-19 crisis represents the program for giving the credits for keeping the liquidity and the current assets. This program is for the entrepreneurs, micro, small and medium enterprises, farms and collective farms that are registered in the register through the Development fund of the Republic of Serbia.
The guarantee scheme for the support of economy during the COVID-19 crisis is the program for giving credits for keeping the liquidity and the current assets. It is designed for the entrepreneurs, micro, small and medium enterprises and farms that do business in our country through commercial banks.
The last set of measures presented as a part of economic measure package is related to paying direct help to all adult citizens of the Republic of Serbia. This direct help for the adult citizens will be paid in the amount of 100 euros, in dinars counter value.
In the following days, we expect more details about these measures and simulations that the country will give during the state of emergency. We will publish all the instructions and rulebooks on our web site directly after their announcement.
Decree on fiscal benefits to companies in Serbia due to pandemic Convid-19
