Government adopts new financial aid regulation for legal entities

The Government of Republic of Serbia has adopted a new Conclusion on economic measures for private sector on 30 July 2020.

The new regulation prolongs the financial aid already given by the Government to private sector by the Decree on economic measures for private sector (“Off. Gazette of RS” no. 54/2020 i 60/2020) (“Decree”) for another two months, but with certain amendments.

The legal entities remain classified as micro, small, medium and large, based on financial statements for 2018, as previously stated in the Decree.

The Government decided that new direct benefits and fiscal benefits can be used by:

  1. Entrepreneurs, micro, small and medium-sized legal entities that were paid direct benefits in July, in accordance with the Decree;
  2. Large legal entities that have exercised the rights to direct benefits and fiscal benefits from the Decree and that have not reduced the number of employees for more than 10% or haven’t paid dividends as stipulated by the Decree;
  3. Economic operators who have not used the rights to direct benefits and fiscal benefits from the Decree, as follows:
  • economic entities established before March 15th, 2020 who did not use (although they could) the right to direct benefits and fiscal benefits from the Decree,
  • economic entities established after March 15th, 2020 and before July 20th, 2020.

The Entrepreneurs, micro, small and medium legal entities, who were paid direct benefits in July, will be automatically registered for the payment of direct benefits for August and September. The amount of direct benefits will be paid in the amount of 60% of benefits paid in July, for both months.

However, the large legal entities will be paid with direct benefits if they submit a list of persons for whom a large legal entity exercises the right to payment of non-refundable funds by August 15th, 2020. The same rules apply to them as before – they will receive 50% of the minimum wage per employee who had a break of at least 15 working days in the said two months.

The economic operators that have not used the right to direct benefits will have the right to an amount of 120% of benefits paid in March.

The payments will be made to an already opened Covid 19 bank account and direct payments can be used exclusively for the payment of salaries and compensation of salaries to employees.

Business entities are obliged to use the received funds by October 31, 2020 at the latest, and after the expiration of this deadline, the dedicated accounts will be closed, and the unspent funds will be returned to the budget.

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