On 11 February 2021, the Government of Serbia adopted a new Regulation, which established a Program on Direct Aid to Private Sector Entities to Mitigate the Economic Impact of COVID-19 (“Regulation”). Similar to benefits that were available in 2020, the Regulation provides direct payments to private sector companies.
Who can use the benefits?
Benefits provided by the Regulation may be generally used by all resident companies, including branches and representative offices of foreign companies. Unlike benefits that were able under the previous regulations, these benefits are fully available to large companies as well.
Benefits are also available to entrepreneurs, registered farmers, and lump-sum entrepreneurs.
Banks, insurance, and reinsurance companies, pension fund and pension plan management companies, financial leasing companies, payment, and electronic money institutions cannot use the benefits.
What are the benefits?
The benefits consist of direct payments in April, May, and June 2021, in the amount of EUR 130 per each full-time employee, in the following manner:
- In April 2021, companies can receive EUR 130 per each person that was full-time employed in February 2021 and for which the February salary tax return was submitted until the end of March 2021. Companies cannot receive aid for employees whose employment has been terminated between 13 February and 31 March 2021.
- In May 2021, companies can receive EUR 130 per each person that was full-time employed in March 2021 and for which the March salary tax return was submitted until the end of April 2021. Companies cannot receive aid for employees whose employment has been terminated in April 2021.
- In June 2021, companies can receive EUR 130 per each person that was full-time employed in April 2021 and for which the April salary tax return was submitted until the end of May 2021. Companies cannot receive aid for employees whose employment has been terminated in May 2021.
Payments are made to the special-purpose, “COVID-19” bank account of the company, which shall be opened in communication between the Tax Administration, the National Bank of Serbia and a commercial bank holding the companies’ current accounts.
Companies that have current accounts with several banks must choose via the electronic services of the Tax Administration in which of those banks they want to have “COVID-19” account, no later than 25 March 2021.
What are the conditions?
Companies may apply for benefits if they are incorporated no later than 13 February 2021 and have their tax identification number active on the last day of the month preceding the month in which the direct aid is paid.
To preserve the benefits, companies cannot reduce the number of employees by more than 10%, in the period from 13 February 2021 until the expiration of three months from the last payment of direct aid. This restriction does not apply to employees whose previously concluded fixed-term employment contract ends in that period. In addition, companies cannot pay dividends in the period from 13 February until the end of 2021.
The Tax Administration will check whether a company fulfils the conditions to preserve the benefits every last day of the month starting from March 2021 to 30 September 2021. The Tax Administration may control whether the conditions were fulfilled even after 30 September 2021, but no later than January 2027.
In case the companies that were granted direct aid reduce their number of employees by more than 10% within three months from the last direct payment or pay out dividends before the end of 2021, they lose the right to aid and must return the received amout, with interest.
How to apply for benefits?
Companies apply for benefits by submitting a statement though the ePorezi portal of the Tax Administration, in accordance with the Explanation that will be published on the website of Tax Administration.
The statement must be given separately for each direct aid payment, no later than the last day of the month preceding the month in which the direct aid is paid (e.g. to receive direct aid in April, companies must apply no later than 31 March).