The Government of the Republic of Serbia launched a plan of economic measures on March 31, 2020, aimed at assisting the Serbian economy and reducing the negative impact of the COVID-19 pandemic. In the next few weeks, the Government of the Republic of Serbia intends to take legal action to implement the announced measures.
First, it is important to emphasize the following requirements that business entities must meet in order to exercise the rights envisaged in the economic measures plan:
1) In the state of emergency, the number of employees reduced by the business entity does not exceed 10% (excluding part-time employees whose contracts expire in the state of emergency);
2) The business entity did not temporarily suspend its business before declaring a state of emergency on March 15, 2020.
In addition, it must be emphasized that the Government of the Republic of Serbia divides the economic measures program itself into four (four) sets of measures.
The first set of measures
Tax policy measures
One of the envisaged measures is to postpone the payment of tax arrears in a state of emergency, and involves the payment of taxes and the payment of employee salaries. These taxes will be paid in installments by legal entities in the private sector. The measure also applies to deferred taxes on income from self-employment activities of all entrepreneurs. All employers who choose to use this measure can postpone the payment of taxes and salaries until the beginning of 2021. After this period, it is possible to further postpone the payment of these fees for 24 months. If there is no tax obligation, the taxpayer’s request .
In addition, the first set of measures envisages postponing the payment of the 2020 corporate income tax prepayment due in the second quarter of 2020 (April to June).
In addition, all donors who donate their products or traded products to institutions that directly participate in activities aimed at preventing citizens from spreading and treating COVID-19 are exempt from VAT.
The second set of measures
Direct financial assistance to business entities
This set of measures involves direct payments to business entities in the form of economic assistance in the form of minimum net wages for entrepreneurs, micro, small and medium companies.
In addition, this set of subsidies also includes a subsidy of 50% of the minimum net wage of large companies, which decided to terminate the work of their employees (but not included) in accordance with Article 116 and Article 117 of the Labor Law. Termination of employment).
The basis for this distinction is that compared with large enterprises, entrepreneurs, micro, small and medium-sized legal entities have a much lower economic strength, and therefore have less resistance to the negative effects of the pandemic crisis.
The third set of measures
Concessional loans to companies
The third set of economic measures:
1) Entrepreneurs, micro, small and medium legal persons, companies in the agricultural holdings and cooperative sectors registered in the relevant registers through the Development Fund of the Republic provide a plan to maintain liquidity and liquidity loans in Serbia
2) A guarantee plan to support the economy under the COVID-19 crisis and provide loans for companies in entrepreneurs, micro-, small and medium-sized legal entities, and commercial farms to maintain the liquidity and working capital of the company in Serbia Banks operated by the Republic.
The total value of the economic program measures envisaged by this set of measures is 2.2 billion euros or 264 billion rials.
The fourth set of measures
Financial assistance to all adult citizens of the Republic of Serbia
This set of measures envisages direct payment of 100 Swedish krona riyals to all adult citizens of the Republic of Serbia.
Finally, it must be emphasized that the total effect of the aforementioned economic measures taken by the Government of the Republic of Serbia is estimated to be 608.3 billion riyals (approximately 5.1 billion euros). However, at this point, it is necessary to wait for the government to pass all relevant regulations and other legal actions, because once these regulations and other legal actions are enacted, there will be a clearer way to implement the measures taken and achieve the set goals- That is to say, by providing convenience for all enterprises (from entrepreneurs to large companies) in emerging situations, in order to maintain the current employment rate of the population.