Serbian Government adopted Regulation on establishing the Program of cash subsidies from the budget of Republic of Serbia to business entities in private sector in order to mitigate the economic consequences caused by epidemic of COVID-19 caused by SARS-CoV-2 virus (hereinafter: the Program) on 11 February 2021.
Cash subsidies to private sector
Business entities in private sector, if they meet the prescribed conditions, may be entitled to the payment of cash subsidies from the Serbian budget. Business entities in the private sector also include branches and representative offices of foreign legal entities.
The amount of cash subsidies is RSD 15,450.12 per employee (this is one half of the amount of the minimum net salary for January 2021), and the payment of cash subsidies to business entities is planned in April, May and June 2021. Cash subsidies can be used exclusively for the purpose of payment of salaries and compensation of salaries to employees, no later than 30 July 2021. The program regulates in more detail the manner of determining the number of employees entitled to cash subsidies.
The entities entitled to cash subsidies are business entities in the private sector:
- who have been established and registered with the competent authority or organization as of the day the Program entered into force, ie. who have become VAT payers as of the day the Program entered into force;
- whose tax ID has not been suspended on the last day of the month preceding the month in which the cash subsidies are paid.
In addition, all business entities in private sector, regardless of their size, are entitled to cash subsidies, with the exception of the following large legal entities:
- banks,
- insurance and reinsurance companies,
- companies for managing of voluntary pension funds and pension plans,
- financial leasing providers,
- payment institutions and electronic money institutions.
Entrepreneurs, entrepreneurs-farmers and lump-sum entrepreneurs who have registered a suspension of activities at the earliest on the day the Program entered into force, are also entitled to the payment of cash subsidies, if they meet conditions provided by the Program.
The manner of exercising the right to cash subsidies
Business entities who want to exercise the right to cash subsidies should provide a special statement on Tax Administration portal named ePorezi, where this statement should be given for each cash subsidy separately, no later than the last day of the month preceding the month in which cash subsidies are paid. Exceptionally, business entities in private sector who do not submit the PPP-PD Form, ie. who do not have employees and are not entrepreneurs, ie entrepreneurs-farmers who opted for the payment of personal salary, cash subsidies are paid without providing a statement of acceptance.
For the purpose of cash subsidies payment, a special bank account will be opened.
The loss of right to cash subsidies
Business entity in private sector loses the right to use cash subsidies if, in the period from the date the Program entered into force until the expiration of three-month period from the last payment of cash subsidies, reduces the number of employees by more than 10% (excluding employees who have concluded fixed-term employment contract with business entity in the private sector before the Program entered into force for a period ending from the date the Program entered into force until the expiration of three-month period from the last payment of cash subsidies).
In addition, starting from the day Regulation enters into force until the end of 2021, business entities who decide to use cash subsidies are prohibited from paying dividends. If a dividend and cash subsidies are paid to business entity, the rules for the loss of right to cash subsidies will apply.
Business entities who lose the right to cash subsidies are obliged to repay cash subsidies together with interest, in the manner prescribed by the Regulation.
For all additional information, the expert team of TPA Serbia is at your disposal