Western Balkans: Tax measures and reliefs from COVID-19

ALBANIA

Income taxes

• Legal entities and other taxpayers registered for CIT purposes would be entitled to submit the Annual Financial Statements of 2019 by 31 July 2020.
• Taxpayers having realized an annual turnover less than ALL 14 million will be able to pay the CIT liabilities due for 2019 within the second half of 2020.
• The CIT advance payments for 2020 for taxpayers having realized an annual turnover less than ALL 14 million would be payable by 31 December 2020.

In 10.04.2020, Ministry of Finance and Economy issued the Instruction no. 15, dated 03.04.2020 “On some additions and amendments to the instruction no. 5, dated 30.01.2006, ‘On income tax’, as amended. This instruction has reflected and broadened the amendments brought by the Fiscal Package 2020, as well as by the acts related to the state of natural disaster and pandemic disease to the Law “On income tax” (summarized in our continuous series of publications in December 2019 and January 2020) by also presenting illustrative examples.

Tax incentives and reliefs

The amending instruction reflects the incentives and tax reliefs presented through the Fiscal Package 2020, and determines, as appropriate, the procedures for their implementation:

1. a) Representation expenses for exporters

For exporting taxpayers (excluding manufacturers working under inward processing models), who in the last 3 years have realized 70% of their income from exports, the representation costs abroad (participation costs, presentation at fairs and exhibitions) are considered as deductible expenses up to 3% of the annual turnover previously the rate was 0.3%).

1. b) Sportive sponsorships

Companies that realize annual taxable profit greater than ALL 100 million, for amounts that sponsor towards activities of sports teams, part of sports federations recognized by the legislation in force on the field, which are within the limit of 5% of profit before tax, will be recognized as deductible expenses at the extent of three times the value of the sponsored amount. In the amending instruction are determined the documentation, procedure and deadline to be followed by sponsoring and sponsored taxpayers in order to benefit the above incentive.

1. c) Donation expenses

Expenses incurred on donations in cases of natural disasters and made within the specified period, given in cash transferred to treasury accounts, or given in the form of immovable property, will be considered as deductible expenses up to the level 5% of profit before tax.

1. d) Carry forward of fiscal losses

Following the amendments presented by the Fiscal Package 2020 for the carry forward of fiscal losses up to the next 5 tax periods, the instruction sets out the criteria and procedures to be followed for the implementation of this legal provision. According to the amending instruction, along with the financial statements of each exercise year (until the required investment value is met), the taxpayer must submit to the Regional Tax Directorate the relevant documentation attesting that the investment value is over ALL 1 billion and the loss has been carried forward in accordance with this provision. Modalities for exemption from personal income tax for property donation/division within the family.

Among other things, the amending instruction stipulates that the exemption from personal income tax applies when the transfer of ownership occurs:

(i) between family members (thus, between the spouses and children); and,

(ii) only once towards a beneficiary. Regarding the above, at the moment of donation, the deed of donation /waiver on the property along with the document certifying the family connection must be deposited with the notary. The value of the donated /waived property will be determined as the highest between the minimum fiscal price and the price in the cadastral register according to the notarial deed from which this property was obtained (if applicable).

Personal Annually Tax Declaration

Part of the changes of the Fiscal Package 2020 was also determining the obligation of resident and non-resident individuals employed by more than one employer to submit the Annual Personal Income Tax declaration, regardless of whether the gross annual income is less than ALL 2 million. In the amending instruction is determined that such provision shall be applicable for all individuals that have obtained employment income from more than one employer starting from 1 January 2020. Change of ownership The amending instruction reflects the exemption brought by the Fiscal Package 2020 by stipulating that the provisions of article 27/1 “Change of ownership” of the Law on Income Tax will not apply when the change of ownership (shares, quotas or voting rights) is subject to the provisions of ratified agreements in force for the avoidance of double taxation.Filing of inventory

The amending Instruction stipulates that taxpayers, in addition to submitting to the tax authorities the annual corporate income tax return and annual financial statements, must submit the analytical inventory of the goods by 31 March of the following year. Also, within the 31 December of each year, taxpayers must submit the non-current assets inventory, based on the form “Non-current Assets Form” approved in the amending instruction. Correction of the deadline for payment of withholding tax for technical, consulting and management services It is reflected the correction of the error regarding the deadline of declaration and payment of the withholding tax for non-settled invoices for technical, consulting and management services, so that these expenses are considered as deductible expenses for corporate income purposes. Now, the instruction reflects that the deadline for declaring and paying the withholding tax is 20 January of the following year, regardless of the time when the invoice is settled (previously erroneously expressed as 20 December of the current tax period).

 Indirect taxes

• The deadlines for declaration and payment of value added tax, withholding tax, payroll taxes and contributions and local taxes remain unchanged.

 Simplified tax for small businesses:

• The 2020 installments of the simplified income tax due by taxpayers registered under the category of small tax business will be postponed for 20 October (for the 1st and 2nd quarters) and 20 December 2020 (for the 3rd and 4th quarter).

Measures taken for certain category of employees

• Employees working for legal entities or sole entrepreneurs registered for CIT or as small businesses and having realized an annual turnover not exceeding ALL 14 million during 2019. Employees included under this category would be supported by payment of the minimum salary of ALL 26,000 per month.
• Double employed individuals shall benefit only one payment regardless of being simultaneously in two payroll lists.
• The salary subsidy will be payable upon successfully meeting the conditions set out in the Decision of the Albanian Government. The Albanian tax authorities should verify within the first 10 days of the following month after application and may perform on-site visit investigations to confirm whether the applicants have suspended the business activity in accordance with the governmental guides.

Measures for the self-employed

• Self-employed individuals realizing an annual turnover not exceeding ALL 14 million and their family members working against no payment in the same business would be entitled to benefit the minimum salary of ALL 26,000 per each person.
• The financial subsidy will be awarded upon application and confirmation of the tax authorities that the criteria set out in the decision of the Albanian Government for this purpose are met.

Tax Measures

The Council of Ministers on 25 March 2020 approved measures that provide special rules for judicial proceedings during the pandemic. Under these measures, hearings in administrative and civil proceedings are generally suspended, and the statute of limitations for filing claims, lawsuits, and appeals are similarly suspended.

The deadlines for the submission of financial statements has been extended. For all taxpayers, the balance sheet and its annexes, can be submitted by 31 July 2020. For taxpayers with a turnover of up to ALL 14 million, the tax calculated on the basis of the 2019 annual taxable income statement, as well as the prepayments due for the 2019 tax period, shall be paid by the taxpayer within the second half of 2020.

For taxpayers with a turnover of up to ALL 14 million, the quarterly profit tax installments for 2020 can be paid by 31 December 2020. Payment installments for taxpayers with annual turnover from ALL 5 to 8 million can be made for the first and second quarters of 2020 by 20 October 2020, and for the third and fourth quarters of 2020 within 20 December 2020.

Debt recovery has been suspended or postponed in relation to the garnishing of wages and bank accounts as well as asset seizures and sales. There are no changes or suspensions planned for other debt recovery procedures or instalment agreements.

All applications are being prioritized for approval under the legal obligations and deadlines. There is coordination with the Ministry of Finance and Economy to prioritize through the Treasury, the value for reimbursement for all the approved applications under the FIFO method. For the approved refund applications, which are handled in instalments due to their high value, payments from the Treasury will be based on the budget’s financial situation.

BOSNIA AND HERZEGOVINA

Republika Srpska – Corporate income tax liabilities in

The Decision on temporary deferral of payment of tax liabilities has been enacted published in the Official gazette of Republika Srpska (“RS”), no. 28/20 from 27 March 2020. The temporary deferral of payment of tax liabilities is a measure to lessen the consequences and difficulties that businesses are experiencing. Taxpayers that are impacted by the measures and which are facing difficulties in settling their due tax liabilities, were given the possibility to submit a written Statement for the temporary deferral of payment of tax liabilities in relation to:

• Corporate income tax.
• Fee for improvement of useful functions of forests.
• Fee for prevention of fires.
• Personal income tax, as per the annual tax return for 2019.

In accordance with the decision, the above-mentioned liabilities are temporarily postponed until 30 June 2020. The above-mentioned liabilities shall be payable after 30 June 2020 in installments until the end of the year.

Correction of advance CIT payments

The Corporate Income Tax Law of the Federation of Bosnia and Herzegovina provides for the correction of CIT advance payments assessed based on the prior year’s taxable profit and tax liability in circumstances of natural and other disasters. The Government of the Federation of Bosnia and Herzegovina pronounced the state of disaster caused by COVID-19 on 16 March 2020. The request to reduce CIT advance payments for 2020 must be filed with the Tax Administration of Federation of Bosnia and Herzegovina and the Tax Administration should issue its Decision.

Financial aid

Republika Srpska has so far adopted a modest package of financial aid. Its Solidarity Fund will finance social contributions for March salaries to the businesses which were closed by order of the Government of Republika Srpska in March due to COVID-19 epidemics. Those are the businesses from the sectors such as hospitality, retail, hairdressers, beauty shops, wellness and spa centers, etc. The list of the businesses qualifying for this aid is available at the web page of the Ministry for Economic and Entrepreneurship. Those businesses which are eligible for the aid but are not included on the list are invited to contact the Ministry. Requests for this aid must be submitted until 11 May.

Furthermore, the businesses entitled to the foregoing limited March aid, as well as those which temporarily ceased or reduced their operations because of economic consequences of the pandemic (loss of markets, disruption to supply chain and similar), are entitled to the amount corresponding to the statutory minimum salary of their employees (BAM 520, i.e. approximately EUR 265) who were on the payroll in for April 2020, with accompanied tax and social contributions.

Qualifying businesses must submit applications for the April aid until 15 May 2020 online via the web page of the Government. Based on the applications, the competent ministries will prepare the list of those approved for the aid. Thereafter, the approved businesses will have to submit to the Tax Administration until 10 June 2020 a request for the aid with an affidavit attesting that they were temporarily closed and a payroll list. The form is available on the website of the Tax Administration.

Gaming operators which were closed due to COVID-19 related orders of the competent authorities are released from fees on electronic games via terminals, betting games, games at slot machines, proportionally to the period of time they were closed.

Tax relief

Minimum annual income tax for 2020 applicable to small entrepreneurs is reduced from BAM 600 (approx. EUR 306) to BAM 240 (approx. EUR 122).

Federation of Bosnia and Herzegovina – Filing deadline extended

The Tax Administration of FBiH announced the extension to, inter alia, the individual income tax return filing deadline and the corporate income tax return filing deadline from the end of March to 30 April 2020. The Tax Administration provided the detailed instructions on the filing mechanism by email and appealed to taxpayers not to visit the Tax Administration unless specifically invited by the Tax Administration.

Financial aid

All registered businesses, except for state-owned companies, financial institutions and entrepreneurs who are not taxed based on income but under lump-sum taxation regime will receive a subsidy for statutory social contributions of employees (pension, health, and unemployment insurance) in the amount of BAM 244, 85 per employee for the entire period of emergency situation starting with the month of April and ending in the month that follows the declaration of the end of emergency situation. The subsidy amounts will be paid directly to the relevant compulsory insurance funds.

Eligible businesses have to satisfy the following cumulative conditions in order to receive the foregoing financial aid:

1. their turnover must have decreased for 20 % or more in the month for which they claim the aid, compared to the same month in 2019; and
2. they must not have any outstanding liability for social contributions and payroll tax for the period ending in February 2020.

Guidance on the procedure and required documents is prescribed by the Tax Administration and published on their website. The guidance supplements the legislation by specifying that businesses registered after 1 March 2020 are not entitled to the subsidy and also that the subsidy does not apply to employees of businesses registered in the Federation B&H but working in the branches located in Republika Srpska and Brčko District.

Tax relief

Businesses that qualify for fiscal aid above are also relived from the obligation to pay advances on 2020 income tax. However, they are not released from payment of final income tax obligation for 2020. Lump-sum tax obligation applicable to private entrepreneurs under lump-sum taxation regime is reduced for 50% for the period starting on 21 March 2020 and ending on 31 December 2020.

Suspension of default interest calculation and forced collection

Default interest does not run on any debt for the period from 1 March 2020 until the expiration of 30 days following the emergency situation termination. This also applies to private creditor-debtor relationships. With respect to public revenues claims, default interest does not run during the emergency situation and for a period of 60 days thereafter.

Value Added Tax

• Council of Ministers have adopted a Decision on indirect tax exemptions and tax refund of already paid indirect taxes on equipment and resources donated by domestic and international entities for prevention and suppression of COVID-19. This is related to masks, gloves, disinfectants, medical protection suits, ventilators and similar.

Corporate Income Tax

• Both FBiH and RS tax authorities have extended deadlines for submission of annual tax returns. In FBiH, a new deadline is set to April 30, 2020, while RS has extended its deadline to June 30, 2020. In RS all payments can be made in installments.

Social Security Contributions or Payroll Tax

• In FBiH – annual tax returns submission deadline is extended to April 30, 2020. Deadline for monthly payroll and social contributions returns for March are extended to April 30, 2020, while a new deadline for April, 2020 returns is May 31, 2020.
• In RS – submission of annual PIT returns deadline is prolonged to June 30, 2020. Same is applicable to other taxes that will be due for payment on March 31, 2020. All payments can be made in installments.

Other relief tax measures

• In both FBiH and RS Deadlines for submission of other direct taxes returns are extended mostly for one month.
• In FBiH, all tax returns and other registration data forms are to be sent by post, e-mail or fax.
• Per decisions of the banking agencies moratoriums and/or grace periods for loans is possible.

KOSOVO

The tax authorities in Kosovo have introduced measures to mitigate the impact of the COVID-19 pandemic. These measures include:

• An extension of the deadline for the submission of corporate and individual income tax returns and payment of tax liabilities until 30 April 2020.
• A suspension of the requirement to submit consolidated financial statements, management reports, consolidated management reports, audit reports on the financial statements of legal entities until 30 June 2020.

In addition, any tax refund review and approval procedure is suspended until 30 April 2020.

The deadline for the submission of corporate and individual income tax returns and payment of tax liabilities is extended until 30 April 2020. In addition, any tax refund review and approval procedure are suspended until 30 April 2020.

Submission of consolidated financial statements, management reports, consolidated management reports, audit reports on the financial statements of legal entities has also been suspended to 30 June 2020.

Based on Decision of Ministry of Finance and Transfers on 19 March 2020, the deadline for submission of the tax returns, reports and payment of tax liabilities is extended until 30 April 2020. In addition, any tax refund review and approval procedure will be suspended until 30 April 2020.

The extension of the period is applied for all tax returns due by taxpayers registered as private physical and juridical persons (i.e. legal entities, corporations, employers, non-for-profit organizations or similar). The extension of the reporting deadlines is not applicable for public sector.

The extension applies to all tax returns and taxes regulated by the Law on Tax Procedures, Law on Corporate Income Tax, Law on Personal Income Tax and Law on Value Added Tax. Nevertheless, the Ministry of Finance and Transfers encourages the taxpayers not being affected by the COVID-19 situation to comply by submitting the tax declarations and make tax payments as per the original deadlines if possible.

The Decision dated 18 March 2020, the Ministry of Finance and Transfers approved also the postponement of submission of the consolidated financial statements, management report, consolidated management report, audit report on the financial statements of legal entities with Kosovo Council for Financial Reporting as required by the Law on accounting, financial reporting and audit in Kosovo. This deadline is extended until 30 June 2020.

 MONTENEGRO

Tax relief provided in Montenegro in response to the coronavirus (COVID-19) pandemic include measures for (a) the deferral of payments of individual (personal) income tax and (b) social security contributions.

Tax authorities published on March 17, 2020, issued the decision to extend the deadline for filling of statutory financial statements and corporate income tax returns from 31 March 2020 to April 15, 2020. The decision to extend the statutory deadline relates solely to the filing of financial statements and corporate tax returns, but not to the payment of corporate income tax liability.

A decree is effective 31 March 2020, and includes a 90-day postponement for businesses economically affected by the COVID-19 pandemic to pay their tax liabilities—that is, taxes that otherwise would need to be paid during March, April, and May 2020

• The decree does not apply with regard to governmental entities or municipalities.
• The tax liabilities for which relief is provided include: (1) individual income tax; (2) social security contributions; and (3) amounts owed under a payment plan for taxes due for prior tax periods.
• Taxpayers seeking to take advantage of the relief must file a request with the tax authority.

Separately, the tax authorities announced an extension of the deadline for filing of the annual individual income tax return (GPPFL Form) for 2019. The deadline (originally 30 April 2020) has been extended by 15 days, and the new filing deadline is 15 May 2020.

NORTH MACEDONIA

Employees support

• A wage subsidy equal to the minimum wage is planned to affected companies to help them maintain jobs (about 1 percent of GDP). Also, vulnerable households who were part of the informal economy and lost their income will receive financial support.
• a subsidy on social security contributions for firms that maintain employment,

Other financial support

• Support for sports workers employed in sports associations and freelance artists in amount of MKD 14,500 for April and May.
• Cash compensation for individuals who lost their jobs as a result of the COVID-19 crisis in amount of 50% of the average salary of the employee.

Financial support for micro, small and medium enterprises 

• A total of EUR 5.5 million will be granted as interest-free loans to companies conducting business activates in the sectors most affected by COVID-19.
• The individual loans ranging from EUR 3,000 to EUR 30,000 depend on headcount:
  • enterprises with up to 10 employees shall be entitled to receive a loan up to EUR 5,000,
  • enterprises with 10 to 50 employees shall be entitled to receive a loan up to EUR 15,000,
  • enterprises with 51 to 250 employees shall be entitled to receive a loan up to EUR 30,000.
• Additional EUR 8 million will be granted as interest-free loans as a second set of financial support.
• The individual loans ranging from EUR 3,000 to EUR 90,000 depend on the headcount.

Financial support and subsiding for social security contributions

• Financial support for the payment of salaries of up to MKD 14,500 per employee, to employers in the private sector affected by the COVID-19 crisis, for the months of April and May 2020 as well as to individuals conducting independent business activities.
• An alternative measure is available for subsiding employers affected by the COVID-19 crisis, for payment of the mandatory social security contributions for April, May and June up to 50% of the contributions calculated on the average gross salary for January 2020. The two measures can be mutually excluding.
• The measures generally apply to employers who realized reduced revenues due to the crisis, and are subject to several conditions, such as limitations in respect to paying dividends to shareholders and any type of awards for business success to employees and members of management, as well as a requirement for preserving a certain number of employees (except in cases of death, retirement or in the case of termination of the employment by the employee) for certain period of time.
• After year-end, depending on the results, there might be an obligation for reimbursement of the funds received under the respective measures.

Decreased rate of the penalty interest

• The penalty interest for public liabilities is reduced by 50%, i.e. from 0,03% to 0,015%.
• The statutory penalty interest between legal entities is decreased from 10 to 5 %, while the statutory penalty interest where at least one party is a legal entity is decreased to 4 %.

Enforced collection measures

• The tax authorities announced that they will not conduct any enforced collection in respect of all taxes and other public charges (fines, court fees) against those taxpayers who have not paid their obligations.
• The Law on Enforcement is suspended until the end of June., and the enforcement agents are obliged to stop taking any enforcement action.

Tax measures

• postponement of corporate income tax payments by suspending obligations to prepay based on past year’s income.

Exemption from payment of advance installments for corporate income tax and personal income tax purposes for March, April and May 2020 

• The measure applies to taxpayers conducting business activities in sectors that are most affected by the COVID-19 crisis such as catering, tourism (tourist agencies, tour operators, accommodation facilities), transport (land, water and air transport).
• The measure may also apply to taxpayers from other sectors who have suffered reduced business activities due to the COVID-19 crisis, and is subject to certain conditions such as limitations in respect to paying dividends to shareholders and any type of awards for business success to employees and members of management and supervisory bodies, as well as a requirement for preserving the number of employees (except in cases of death, retirement or in the case of termination of the employment by the employee) for certain period of time.

Exemption from VAT on the donations given to a state budget user aimed for dealing with COVID-19 

The measure applies for VAT exemption on:

• the supply of goods and services provided as a donation to a state budget user, aimed for dealing with COVID-19, as well as
• the supply of goods and services financed by funds donated to a state budget user, aimed for dealing with COVID-19.

Extension of the deadline for filing the VAT returns and for paying the VAT due

• The deadline for filing VAT returns for February, March / Q12020 as well as for paying the VAT due is extended to 30 April 2020.
• The deadline for filing VAT return for April 2020 as well as for paying the VAT due is extended to 31 May 2020

Decrees have been adopted giving the right to exemption from paying the advance payments of personal income tax, i.e. the profit tax for the months of March, April and May 2020, to taxpayers from certain activities and other taxpayers who have suffered damage in their operations due to the implementation of measures to prevent the spread and spread of COVID-19.

SERBIA

The Government has adopted a Decree on postponing the deadline for obtaining the status of a qualified new employee prescribed by the Personal Income Tax Law, during its session held on 24 April 2020. Decree is into force from 24 April 2020 the day of publishing it in the Official Gazette of RS.

On April 24 2020, it was adopted a Decree amending the Decree on fiscal incentives and direct grants to privately owned companies and on grants to citizens aimed at reducing the economic effects caused by the COVID-19 illness.

On April 16 2020, a Decree was issued on the extension of deadlines for holding regular company general assemblies and submitting yearly and consolidated financial reports for companies, associations, other legal entities and entrepreneurs, as well deadlines for the submission of corporate income tax returns and for self-employment tax returns and on the extension of licenses for certified auditors and licenses for real estate evaluation, that are expiring during the state of emergency caused due to the COVID-19 sickness resulting from the SARS-COV-2 virus.

Decree on fiscal incentives and direct grants to private companies and citizens

Decree foresees fiscal incentives for legal entities, including branches and representative office (hereinafter: legal entities) from personal income tax and social security perspective as well as non-refundable cash grants for the employees.

Income Tax Advances

According to the Decree on fiscal incentives and direct grants to private companies and citizens aimed at reducing the economic effects caused by the COVID-19 illness (hereinafter “Decree”) one of the foreseen fiscal incentive is to provide legal entities, including branches and representative offices of foreign entities (hereinafter: legal entities) possibility to postpone payment of income tax advances that are due on April 15, May 15 and June 15, 2020, until the submission of the final income tax return for 2020. This practically means paying these three advances is postponed until the end of June 2021 (for taxpayers whose fiscal year equals a calendar year). The payment of these three advances, will be made in a maximum of 24 equal monthly instalments without interest. Please note that, if the final income tax liability for 2020 is lower than the sum of only these three advances, the difference between the sum of these three advances and the final CIT liability will be due on the date of filing of the 2020 income tax return (June 2021). The above-mentioned rules shall accordingly apply to taxpayers who file their tax returns for a period other than the calendar year beginning or ending in 2020.

As the Decree does not cover the remaining monthly tax advances for 2020, where advances for the first half of 2020 are assessed and paid based on the result generated in 2018, while for the second half of 2020 until mid-2021, the monthly advances are paid based on the 2019 result, in case the results from 2018 and 2019 are significantly higher than the result to be expected for 2020, it is our understanding that only after filing of the final 2019 tax return (by June 29^th), tax payers can apply for changing/reducing future advance payments, following the regular procedure prescribed by Article 68 of the Serbian CIT Law. Amended advance payments shall be payable from the next month in which the request for change is filed, i.e. tax payer will also be required to pay the full June advance payment based on the 2019 result in case 2019 tax return is filed at the end of June 2020.

Delaying the payment of the income tax advances for March, April and May, due in April, May and June, assumes no dividend payments until end of 2020 and not reducing the number of employees by more than 10% in the period mid-March end of October. It is expected that applying of this incentive in practice shall be automatized through TA information system in a way that due dates for these three advance payments shall be deleted from the tax calendar.
The Ministry of Finance has issued the Manual for the Implementation of Fiscal Incentives and Direct Grants to Privately Owned Companies.

The Decree details the following:

• Fiscal incentives for companies – legal entities in the form of delayed payment deadlines for salary taxes and social security obligations and corporate income tax installments;
• Fiscal incentives for entrepreneurs in the form of delayed payment deadlines and the delay in the payment itself for installments for taxes and contributions on self-employment income;
• Direct grants to privately owned companies in the form of non-refundable cash grants;
• The application of a 0% rate of VAT for free of charge supplies of goods and services performed by VAT payers to the Ministry of health, the National Health Insurance Fund or any publicly owned medical institution, with the accompanying right to deduct input VAT, as of the day the state of emergency was implemented; and
• A one-off cash grant for all citizens of the Republic of Serbia of legal age.

On March 20, 2020 it was adopted a Regulation on Tax Measures for Mitigation of Economic Consequences Caused by the Disease COVID-19 Induced by the SARS-CoV-2 Virus.

During the state of emergency, the Regulation envisages the following:

• For the amount of more or less paid taxes and incidental charges, besides interest, interest shall be calculated and paid at a rate equal to the annual reference rate of the National Bank of Serbia.
• Taxpayers participating in deferred tax payment schemes and who do not adhere to agreed repayment plan measures will not be a subject to enforced collection procedures, starting from the installment due in March 2020, the tax authorities will not annul or terminate compulsory collection agreements and decisions and interest shall not be calculated at all on the tax debts that has been deferred, either by delaying the execution of the final tax act or by delaying payment of the tax due.

Deferral of payments of tax on wages and social contributions for the private sector is available until 2021. Further, taxpayers can defer paying corporate profit tax in the second quarter of this year. Taxpayers are obliged to submit their tax returns within the legal deadlines.

Serbia During the state of emergency, an interest rate is calculated and charged, but it is decreased by 10% and is equal to the annual reference rate of the National Bank of Serbia, which currently amounts to 1,75%. When it comes to paying tax on wages, social contributions and corporate profit tax, there will not be any interest calculated since all such payments are deferred.

For taxpayers who reached an agreement with the tax administration to pay taxes in installments, during the state of emergency, the tax administration will not suspend the agreement, nor calculate the interest rate for installments not paid on time.

On 6 May 2020 the Serbian Parliament adopted the Decision on Termination of the State of Emergency introduced on 15 March 2020. The Decision was published in the Official Gazette of the Republic of Serbia no. 65/2020 on 6 May 2020. The Decision is effective as of 6 May 2020.

On the date of termination of the state of emergency, special tax measures introduced during the duration of the state of emergency are no longer effective. As a result, deadlines for meeting specific statutory requirements are reinstated which had been deferred due to the state of emergency, including deadlines within which taxpayers can exercise their right to protection of their legal interests by invoking particular legal means.