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  • Tax Highlights - August 2020
Article:

Tax Highlights - August 2020

06 August 2020

NEW PACKAGE OF ECONOMIC MEASURES OF THE GOVERNMENT OF THE REPUBLIC OF SERBIA AIMED AT THE PRIVATE SECTOR IN ORDER TO MITIGATE THE NEGATIVE CONSEQUENCES OF COVID 19

On 30 July 2020, at the proposal of the Minister of Finance, the Government of the Republic of Serbia adopted a Conclusion on additional measures to assist economic entities in order to mitigate the negative economic consequences of COVID19.

Additional economic measures can be divided into two categories, namely: (i) Direct payments, (ii) deferral of liabilities for certain public revenues.

CONDITION 1 - WHO HAS AND WHO DOES NOT HAVE THE RIGHT TO USE A NEW PACKAGE OF ECONOMIC MEASURES:

The right to use the new package of economic measures belongs to those persons who can be classified in one of the following four categories:

1. BUSINESS ENTITIES (does not include large legal entities - according to the reports for 2018) - which have exercised the right to use the first set of economic measures (according to the Regulation on fiscal benefits and direct benefits - hereinafter the Regulation), or who have exercised the right to direct benefits whose payment is due in July.

2. LARGE LEGAL ENTITIES (according to the financial statements for 2018) - who have the right to payment of direct benefits from the budget of the Republic of Serbia and have not lost that right in accordance with the Regulation, provided that they submit the SL Form for June and July 2020 no later than 15 August 2020.

3. BUSINESS ENTITIES WHICH DO NOT FALL INTO THE FIRST TWO GROUPS (meet the conditions for the use of economic measures in accordance with the Regulation, and do not fall under the persons listed in the first two items).

4. BUSINESS ENTITIES OTHER - which are established and registered or have acquired the status of VAT payers after 15 March 2020 and by 20 July 2020, that do not submit the PPP-PD Form.

PACKAGE OF MEASURES 1 - DIRECT BENEFITS:

The first part of the new package of measures includes direct grants to economic entities in the following way and according to the following dynamics:

BUSINESS ENTITIES REFERRED TO IN ITEM 1 - direct benefits are paid for the month of AUGUST and SEPTEMBER 2020, in the amount of 60% of the value of direct benefits paid and due in JULY 2020.

BUSINESS ENTITIES REFERRED TO IN ITEM 2 – direct benefits are paid for the month of AUGUST and SEPTEMBER 2020, in the amount debited as a product of the number of employees determined according to the submitted SL Forms for JUNE and JULY and the amount of 50% of the basic minimum wage for MARCH 2020 (RSD 15,183.52) . Namely, specific economic entities are obliged to submit the SL Form for the month of JUNE and JULY no later than 15 August 2020, in order to qualify for the use of direct payments.

BUSINESS ENTITIES REFERRED TO IN ITEM 3 – direct benefits are paid in SEPTEMBER in the amount of 120% of the basic minimum wage for MARCH 2020 (36,440.45 dinars). Direct benefits are paid per individual employee for whom the PPP-PD Form for the accounting period AUGUST has been submitted, and no later than 15 September 2020. It is necessary to enter 5 January 2021 as the date within the PPP-PD application and item 1.4.

BUSINESS ENTITIES REFERRED TO IN ITEM 4 – The amount or amount of direct benefits for this category of economic entities is equivalent to the amount of direct benefits described in the previous item. In addition, the procedure is performed in the same way as described for economic entities from category 3 (except for economic entities that do not submit PPP-PD Form - entrepreneur lump sum, entrepreneur other person, as well as entrepreneur and entrepreneur farmer who pay income tax from self-employed activities and do not have employees and have not decided to pay personal wages).

DEADLINE FOR THE USE OF DIRECT BENEFITS - economic entities must use direct benefits no later than 31 OCTOBER 2020. If the economic entity does not use the direct payments by the specified deadline, the paid funds are transferred to a special account of the budget of the Republic of Serbia.

PACKAGE OF MEASURES 2 – FISCAL BENEFITS:

The adopted Conclusion envisages within the measures of fiscal benefits the postponement of the maturity of liabilities for the following public revenues:

  • taxes and contributions on salaries and wage compensations;
  • taxes and contributions on personal earnings of entrepreneurs;
  • taxes on income from self-employment.

Namely, economic entities from the above mentioned categories that submit the PPP-PD Form for the month of AUGUST 2020, within item 1.4. of the Form shall enter as the due date of the liability - 5 January 2021, and in this way they formally applied for the postponement of the due date of specific public revenues for the beginning of the next year (except for certain categories of entrepreneurs for which different application procedures are prescribed).

LOSS OF THE RIGHT TO USE MEASURES

An economic entity loses the right to use direct benefits from the budget of the Republic of Serbia and to postpone the payment of taxes and contributions if, in the period from 15 March 2020 until the expiration of three months from the last payment of direct benefits, it reduces the number of employees by more than 10%, not counting employees who have concluded a fixed-term employment contract with a business entity before 15 March 2020 for the period ending in the period from 15 March 2020 to the expiration of three months from the last payment of direct benefits.