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The Serbian Government had two objectives when preparing the economic assistance program designed to mitigate the damage caused by the COVID-19 epidemic – safeguarding employment and supporting the business liquidity.
The measures introduced are available not only to companies and entrepreneurs with registered offices in Serbia, but also to bodies or offices representing foreign companies.
According to the Regulation published in the Official Gazette of the Republic of Serbia No. 93/2019, banks, insurance companies, pension funds, leasing companies, financial services companies, electronic payment institutions and entities receiving state funding will not be eligible for these measures.
Companies which have not reduced their number of employees by more than 10% since March 15, 2020 can obtain two types of support, one fiscal and the other one monetary.
- For a period of three months, starting with April salaries that will be paid out in May, companies and entrepreneurs can postpone the payment of their taxes and contributions until 2021, with 4 January 2021 being the last date of payment;
- Starting in May and until July 2020, each micro, small or medium-sized enterprise will receive a contribution of 30,008 dinars (equal to the national minimum wage) per month, paid directly into the company’s bank account, for each full- time employee. Large companies will receive 50% of the afore-mentioned sum for each employee;
- The payment of corporate income tax prepayments will be suspended until the date of submission of the corporate income tax return for 2020, i.e. up to and including the June 2020 installation.
Note:
- Companies benefiting from supportive measures cannot distribute monetary dividends until the end of 2020, but it is possible to distribute them in the form of shares.
- In the event that economic support measures are used by companies that are not entitled to them and are not paid back, the government has set up fines ranging between 30 and 70% of the total amount received, but not less than 500,000 dinars for companies and 100,000 dinars for small business owners. The fine for the company’s legal representative will range between 50,000 and 100,000 dinars.
Additionally, the Government will distribute soft loans to support the liquidity of enterprises both directly (through the Republic of Serbia Development Fund) and indirectly by providing guarantees to commercial banks which will grant new loans
The terms and conditions of these loans are summarized below:
• repayment within 36 months with a 12 months grace period;
• an annual interest rate of 1%;
• funds are liquidated and repaid in dinars
• minimum amount is 1 million dinars for small businesses and 200,000 dinars for associations and cooperatives;
• maximum amounts are 10 million dinars for micro-enterprises, 40 million dinars for small enterprises, and 120 million dinars for medium-sized enterprises;
• the instalments are paid only on a monthly basis;
• during the grace period, the disbursed capital is calculated.
The fundamental condition for access to finance is to maintain the number of full-time employees as the one on 15 March 2020 or that a company has not laid off more than 10% during the period of access to finance.
For further information details please contact Dragana Matic, at
Dragana.Matic@eurofast.eu
Eurofast is a regional business advisory organisation employing local advisers in over 23 cities in South East Europe & Middle East . The Organisation is uniquely positioned as one stop shop for investors and companies looking for professional services in South East Europe & Middle East.
Dragana Matic
Accountant
Dragana.Matic@eurofast.eu