At its session of 24 April 2020, the Crisis Response Team to Curb Infectious Disease COVID-19 passed a Decision recommending all business entities, notably those in production business, to continue working in full capacity whilst respecting preventive measures relating to prevention of spreading of infectious disease COVID-19, so as to ensure safety for their staff and users of their services.

Intensive regulatory activities relating to COVID-19 crisis continued in the previous week as well. In the text below we shall outline the key novelties:

a. Regulation amending the Regulation on fiscal benefits and direct payments for economic entities in private sector and financial assistance for citizens with a view to mitigating economic impact of COVID-19 disease (“Regulation”)

Calculation of direct payments

The Regulation stipulates that an entrepreneurs, flat-rate taxpayers, farmers, other entrepreneurs, micro, small and medium companies may enforce their right to financial grants from budget, namely:

• In June 2020 in the amount obtained by multiplying the number of full-time employees whose salaries and compensations were applied in PPP-PD form for the accounting month of April 2020 and minimum basic net salary for March 2020, the novelty being that the total number of employees is reduced by the number of employees whose employment with the economic entity ended in the period starting from 10 April until 30 April 2020;
• In July 2020 in the amount obtained by multiplying the number of full-time employees whose salaries and compensations were applied in PPP-PD form for the accounting month of May 2020 and minimum basic net salary for March 2020, the novelty being that the total number of employees is reduced by the number of employees whose employment with the economic entity ended in the period starting from 1 May 2020 until 31 May 2020.

Deadline for using the received funds

All business entities are obliged to use the funds received in form of direct payments no later than 15 August 2020, and in case of losing the right to use fiscal benefits and direct payments, the refund of direct payments including the interest shall be made to a special account of the Ministry of Finance – Treasury Administration.

What does dividend imply?

Although the notion of dividend is defined in the relevant act (the Company Law), the Regulation specifies that dividends shall imply all payments made by the company to its owners based on their shareholding i.e. shares in such company.

This clarification is given in the context of restriction according to which the business entities opting for fiscal benefits and direct payments from the budget may not pay dividends until the end of 2020.

Please note that this restriction applies to payment of dividends for all previous years, including the intermediate dividend for 2020, while the Ministry of Finance also explained that this restriction shall not be accordingly applied to entrepreneurs earning taxable profit from independent business activity.

With regard to delayed payment of advance profit tax and income tax for independent business activities, Tax Administration announced that the delay of maturity for these taxes shall be realised on 4 May 2020.

b. Regulation on the delay of deadline for achieving the status of qualified newly-employed person

In relation to the new changes to the tax regime for entrepreneurs and the accompanying tax reliefs for new employment (which we also analysed in one of our previous posts), by this Regulation the Government delayed the deadline for achieving the status of qualified newly-employed person from the Law on Citizens’ Income Tax and the Law on Contributions for Mandatory Social Insurance.

The above stated refers to the person who did not have the status of insured employee in the period from 1 January 2019 until 31 December 2019, nor the status of insured founder of independent business, company member, employee in the company that they founded i.e. that they are a member of.

The deadline was due on 30 April 2020 and it was delayed until 60 days after the end of the state of emergency.

c. The Decision amending the Decision on declaration of disease COVID-19 caused by virus SARS-CoV-2 a contagious disease

The Decsion specified that the measure referring to placement under medical surveillance in the duration of 14 days (home isolation) or other measure of medical surveillance shall not apply to domestic citizens employed in the territory of a neighbouring country who possess the employer’s document on work engagement, as well as to nationals of neighbouring countries employed in the territory of the Republic of Serbia, who were issued a document on work engagement by their employer from the Republic of Serbia.

These persons are no longer obliged to report their border crossing to the National Employment Service.

d. The Decision amending the Decision on restriction of lottery games organisation

The Decision prescribes that, starting from 27 April 2020, the organisers of special and classic games of chance may continue to organise such games in the facilities with surface not exceeding 400 m², given that all preventive measures for prevention of spreading of infectious disease COVID-19 caused by virus SARS-CoV-2 are applied so as to ensure the safety of staff and the safety of service users.

The prohibition of serving food and drinks in these facilities is still in force.

e. The Regulation on the establishment of temporary registry and the manner of payment of lump-sum financial assistance to all adult citizens of the Republic of Serbia for the purpose of mitigating negative impact caused by pandemics of COVID-19 disease caused by virus SARS-CoV-2

The Regulation prescribes that adult citizens of the Republic of Serbia, except for pension beneficiaries and beneficiaries of financial social assistance, need to file an application for receiving lump-sum financial assistance in the amount of EUR 100 in dinar counter-value as on 24 April 2020.

The application shall be filed by phone, through a contact centre, or by e-mail through the portal of the Ministry of Finance – Treasury Administration, in the period from 15 May 2020 until 5 June 2020.

This article is to be considered as exclusively informative, with no intention to provide legal advice.
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