The Government of the Republic of Serbia, at its session on Friday, April 10, 2020, adopted several deecres regarding various types of help to business entities, which were published in the Official Gazette no. 54/2020, dated 10.04.2020. (entered into force on the same day) as it follows:
1. Decree on Fiscal Benefits and Direct Benefits to Business entities and Financial Assistance to Citizens to Mitigate the Business Consequences of COVID-19
The fiscal benefits and direct benefits under this Decree may be used by private sector entities. Article 2 paragraph 1 item 1) of the Decree stipulates that the term
business entity in the private sector includes all business entities not covered by the List of users of public funds established in accordance with the Rulebook on the list of users of public funds (“RS Official Gazette”, No. 93/19) , ie. , resident legal entities, resident entrepreneurs and branches and representative offices of foreign legal entities. Private-sector business operators may use fiscal benefits and direct benefits provided in this Decree, only if from March 15th, 2020 until the date of entry into force of this Decree they have not reduced the number of employees by more than 10%, excluding employees employed by concluding a fixed-term employment agreement with a private sector entity before March 15th, 2020 for the period ending March 15th, 2020, until the date this Decree enters into force.
Some of the benefits of this Decree are deferred tax due and salary contributions to wages and salaries until 4/01/2021. and deferred advance payment of corporate tax until the submission of the final corporate income tax application for 2020. Banks, insurance and reinsurance companies, voluntary pension fund management companies, financial leasing providers and money payment institutions are not entitled to defer tax liabilities under the Decree.
Grants in accordance with this Decree may be used solely for the payment of wages and salaries to employees. For the purpose of payment of direct payments to a business entity, a special purpose account named- payment of direct payments – COVID-19 shall be opened in a bank which, at the moment of entry into force of this Decree, maintains a current account of that business entity. Business entities that have current accounts opened with several banks at the moment of entry into force of this Decree shall submit, no later than April 25th, 2020, through the electronic services of the Tax Administration, information on the name of the bank where the special account will be opened.
2. Decree on the Establishment of the Program of Financial Support for Business Entities for Maintaining Liquidity and Working Capital in Difficult Business Conditions Due to the COVID-19 Pandemic Caused by the SARS-CoV-2 Virus
For the purpose of providing support to business entities for the procurement of working capital and support for maintaining current liquidity in order to regularly settle their obligations to business partners, employees and the state, the funds provided for in this Decree may be used by entrepreneurs, cooperatives, micro, small and medium-sized enterprises in the majority privately or cooperatively owned and engaged in production, service, trade and agriculture. Section IV of the Program established by this Decree, which defines the conditions of use of the funds, stipulates that the condition that the applicants must fulfill is that they are not in difficulty, ie., they have not been initiated bankruptcy proceedings, that they are not subject to the procedure for a pre-prepared plan of reorganization, or that measures from the pre-prepared reorganization plan
(UPPR) are not applicable, that the reorganization plan is not implemented, or that the measures from the reorganization plan, financial restructuring or liquidation procedure are not in force. Funds under this program cannot be used in order to organize gambling, lotteries, then the sale of oil and petroleum products and the production and marketing of any products or activities, which are considered prohibited under domestic regulation or international conventions and agreements.
The maximum loan amount for maintaining current liquidity and obtaining working capital for one loan beneficiary with a related party may be for entrepreneurs and micro business entities up to RSD 10,000,000.00, for small legal entities up to RSD 40,000,000.00, for medium-sized legal entities up to RSD 120,000,000.00 and the basic condition is, as in the previous Decree, to retain the number of employees. The receipt of the requests shall be made until the funds have been spent, and no later than December 10th, 2020.
3. Decree on Conditions and Criteria for Compliance of State Aid for the Elimination of Serious Disruption in an Economy Caused by an Outbreak of Infectious Disease COVID – 19
This Decree regulates more closely the conditions and criteria for compliance with state aid in order to eliminate a serious disturbance in the economy caused by the epidemic of contagious disease COVID-19 (state aid for liquidity of market participants). Article 2 Paragraph 2 of the Decree provides that State aid for the liquidity of market participants may be granted to market participants who were not in difficulty within the meaning of Article 2 Paragraph 1 Item 5 of the Decree on State aid rules (Official Gazette of the RS ”, No 13/10, 100/11, 91/12, 37/13, 97/13 and 119/14) on December 31st, 2019.
State aid for market participants’ liquidity can be granted through instruments such as state aid for market participants’ liquidity in the form of subsidies, debt write-offs, tax credits, state aid for market participants’ liquidity in the form of subsidized interest rates for loans, state aid for market participants’ liquidity in the form of loan guarantees under more favorable than market conditions, state aid for market participants’ liquidity in the form of tax deferrals and / or social security contributions, state aid for market participants’ liquidity in the form of subsidies for employee salaries to avoid redundancies during the COVID – 19 epidemic and state aid for market participants’ liquidity in the form of short – term export insurance.
4. Decree on Conditions and Criteria for Compliance of State Aid for the Elimination of Adverse Consequences Caused by the Outbreak of Infectious Disease COVID – 19
This Decree sets out in more detail the conditions and criteria for compliance with State aid in order to remedy the damage caused by the COVID-19 epidemic. Article
3 of the Decree defines, in part of the criteria, that eligible costs for the granting of state aid for the elimination of damage caused by an epidemic of contagious disease COVID-19 represent the actual loss incurred as a direct consequence of an epidemic of infectious disease COVID-19. Eligible costs shall be reduced by the amount of the advance payment by the state aid provider, business insurance or other benefits (based on the obtained arbitrations, disputes, procedures, etc. in connection with the epidemic of the contagious COVID – 19 disease). State aid is granted up to a maximum of 100% of the eligible costs by the market participant.
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