Serbia: Direct aid for businesses, based on qualified employees (COVID-19)
Serbia: Direct aid for businesses
A decree establishing a direct aid program for business entities has a goal of reducing economic consequences due to the coronavirus (COVID-19) pandemic.
The program is effective 13 February 2021. The program provides direct aid to eligible business entities equal to an amount that is 50% of the minimum net salary for January 2021 (RSD 15,450.12) for each “qualified employee” during a three-month period.
- In April 2021, direct aid will be distributed for qualified employees for which form PPP-PD is submitted by 31 March 2021 (for the salary period February 2021).
- In May 2021, direct aid will be distributed for qualified employees for which form PPP-PD is submitted by 30 April 2021 (for the salary period March 2021).
- In June 2021, direct aid will be distributed for qualified employees for which form PPP-PD is submitted by 31 May 2021 (for the salary period April 2021).
The received aid must be paid in full to the employees—thus, these funds cover part of the employee's net earnings. There is no exemption from paying taxes and contributions (either the contribution of the employee and the employer) on the basis of this payment. The support payments will be made through dedicated COVID-19 accounts which will be opened automatically. Entities have until 25 March 2021 to select the bank where they want their COVID-19 account to be opened.
Funds paid to the COVID-19 accounts have to be distributed to employees by 30 July 2021.
Business entities eligible for the program are those that, regardless of size, are resident entities in the private sector, including branch and representative offices of foreign legal entities. There are other criteria.
Entities not eligible for the program are those in the financial sector such as banks, insurance companies, pension fund management companies, etc.
Businesses may lose the right to direct aid if the number of qualifying employees is reduced by more than 10% (excluding temporary employees with whom a contract is concluded before 13 February 2021, and expires during this period) in the period from 13 February 2021 until the end of the period of three months from the last payment of the direct aid (or 30 September 2021 at the latest). Also, the direct aid is forfeited if the business distributes dividends in the period from 13 February 2021 through 31 December 2021.
Read a February 2021 report prepared by the KPMG member firm in Serbia
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