Serbia: Measures of the Ministry of Finance

published on 20 April 2020 | reading time approx. 3 minutes

Serbian Ministry of Finance, on 30 March 2020, presented the comprehensive set of measures to fight Covid-19 effects on economy. Total value of measures is around 5.1 billion euros and it is equal to 11 per cent of Serbian GDP. The measures will be available to companies that have not laid off more than 10 per cent of their employees.

The taxpayers who have already set up a payment plan with the Tax Authorities, will be relieved from:

termination of their payment plan agreements,
cancelation of decisions on a payment plan and
enforced tax collection in respect of a payment plan.

The rules will be applied starting from an instalment due in March 2020.

During the state of emergency, interest on unpaid tax balances is equated to key policy rate of the Central Bank. The same interest rate will apply to overpaid taxes.

The National Bank of Serbia decreased its key interest rate by 0.5 to 1.75 per cent on 11 March 2020

The above rules are envisaged by: Decree on Tax Measures During State of Emergency Aimed at Reducing Economic Effects of Covid-19 Disease Caused by Virus SARS-CoV-2, that came into effect on 20 March 2020.

Tax Measures

The Government of Serbia adopted on 10 April 2020 the Regulation on Fiscal Benefits and Direct Grants to Private Business Entities and Financial Aid to Citizens Aimed to Alleviate the Economic Impact of the COVID-19 Pandemic (“RS Official Gazette”, No 54/20).

Deferral of payment of salary tax and social contributions for salary payments during the state of emergency (but at least three months). This measure is offered to all privately-owned companies. The payment will start at the beginning 2021 in up to 24 installments
Deferral of advance payments for corporate income tax for the 2nd quarter 2020
Donazions for health care purposes are VAT exempted

Direct grants (cash subsidy)

Cash subsidy to self-employed persons, micro and small companies in the private sector –payment of the minimum wage for each employee (approximately 270 euros) during the next three months
Cash subsidy to large companies in the private sector – payment of the ½ of the minimum wage or each employee whose employment is at a standstill (approximately 135 euros) during the nextthree months

Measures of the Central Bank

The following measures are envisaged by: Decision on Temporary Measures for Preserving Financial System Stabilityand Decision on Temporary Measures for Lessors Aimed at Preserving Financial System Stability, that came into effect on 18 March 2020.

The Central Bank adopted a decision on moratorium on debts towards banks and financial lease providers.
The moratorium is envisaged for all debtors (individuals and legal entities) who accept it and implies a suspension of debt payments for at least 90 days, i.e. for the duration of the emergency state.
During the moratorium, the borrowers and financial lessees will be excused from their payment obligations and the banks and financial lessors will not be allowed to calculate default interest on due amounts or initiate enforcement proceedings with the aim of collecting their claims.
Banks and financial lessors are not allowed to charge their clients any fees in connection with application of above measures.
It is allowed fot Debtors to choose to continue to settle their obligations as initially agreed with bank or financial lease provider.

Other measures to support companies in Serbia

Financing Support

200 million euro loans available to the self-employed persons, micro and small companies in the private sector with 1 per cent interest. Money will be distributed via Serbian Development Fund
2 billion euros of commercial bank loans, backed by guaranties from the Government