COVID-19: Financing, Liquidity and Fiscal Measures

Decree on Application of Deadlines in Administrative Procedures  during the State of Emergency

On 24 March 2020, Decree on Application of Deadlines in Administrative Procedures during the State of Emergency („Decree“) has been published and has entered into force.

The decree regulates the application of deadlines in administrative and tax procedures during the state of emergency. In this respect, Decree regulates that during the state of emergency in Serbia, parties may not be affected due to the absence of their actions within prescribed deadlines in general and special administrative procedures.

Therefore, it has been prescribed that delivered documents and notifications in administrative procedures for which deadlines cannot be extended are deemed delivered upon expiration of 15 days as of the termination of a state of emergency.

In other words, if a decision from Tax Authorities has been delivered to the taxpayer upon declaration of a state of emergency (after 15 March 2020), the deadline for appeal commences upon expiration of 15 days as of the termination of a state of emergency. Hence, taxpayers will have at disposal 30 days upon termination of a state of emergency to file an appeal.

Deadlines that are expiring during a state of emergency and which pertain to administrative actions, finalization of administrative procedures and decision-making based on legal remedies shall be deemed expired 30 days as of the termination of a state of emergency.

The Letter of the National Bank of Serbia to all banks and leasing providers

The National Bank of Serbia has sent a letter/instruction to all banks and leasing providers on the application of the regulations in relation to maintaining financial stability, i.e. in relation to the introduced moratorium and published on its website an explanation on the application of the moratorium regulations in practice.

As a reminder, a moratorium implies a delay in repayment of liabilities to the bank and leasing houses on the basis of loans, i.e. leasing, but also all other obligations of the debtor to the bank. Debtors who have multiple loans are entitled to a moratorium on repayment of all loans.

The letter in question states that it is not acceptable to require the debtor to pay all the obligations for which the deadlock has arisen at once and in full, but that upon the termination of the moratorium the debtor continues to repay the loan, extending the repayment period for the duration of the moratorium (not less than 90 days).

What is important to note is that the regular (contractual) interest, accrued by the bank during the moratorium, is attributed to the principal debt and is evenly distributed over the remaining maturity.

Public Call for Innovative Projects to Counteract the Problems Caused by the COVID-19 Pandemic

The Innovation Fund of the Republic of Serbia (“IF”) is offering financial support for innovative projects designed to counteract the problems caused by the Covid-19 pandemic.

This public call is published for micro, small and medium enterprises with already developed prototypes, products, services and technologies which can be scaled up in a very short time frame and made available for use in combating the consequences stemming from a pandemic.

Projects subject to financing are innovative projects offering solutions for the deficiencies and problems related to population health and wellbeing, caused by the Covid-19 pandemic and the declared state of emergency. Besides the solutions from the domain of public health, the IF will consider solutions from the domain of communication, detection and protection, social media, supply chains, finance and similar, aimed at creating solutions for the designated problem.

Projects financed in this public call can last up to 30 days. In case of specific developments, the IF can approve a no-cost extension for the implementation of project activities.

Development of pharmaceutical drugs and vaccines is not eligible under this public call.

The maximum amount of financing in this public call is RSD 6 million (approx. EUR 51,000) per individual project, but the IF’s financing cannot cover more than 85% of total project costs.

All applications must be submitted in the format which is provided by the IF. The public call is continuously open, and applications will be evaluated as they are received.

Eligible costs are defined as follows:

  • HR costs (including all applicable taxes and contributions for staff engaged in the project);
  • Equipment and materials;
  • External services and subcontractors;
  • Intellectual property protection costs and certification, if applicable.

VAT is not an eligible cost for the purpose of this call.

PROJECT IMPLEMENTATION

After signing the Financing agreement, the User of the funds and the IF will deposit the financing into a special bank account which the User will open for the purpose of the project.

The User is required to submit a financial and narrative report together with the necessary supporting documentation within 3 weeks after the completion of the project.

The IF will perform monitoring of the submitted documentation and a final interview or an on-site monitoring visit, if applicable.

National Bank of Serbia Introduces Moratorium on Loan and Leasing Repayments

In order to maintain achieved level and to further strengthen the stability of the financial system in conditions of potential risks caused by emergency health situation in Serbia, the National bank of Serbia has on 17 March 2020 adopted decisions based on which the moratorium on loan and leasing repayments is introduced:

  • Decision on Temporary Measures for Maintenance of Stability of Financial System and
  • Decision on Temporary Measures for Leasing Providers for the Purpose of Maintenance of Stability of Financial System.

The moratorium is introduced for all debtors who wish so (individuals and legal entities, as well as entrepreneurs) and entails moratorium in payment of liabilities which cannot be shorter than 90 days or term of state of emergency introduced due to a pandemic of Covid-19 virus. In this period, the debtor is not obliged to settle its liabilities stemming from the loan or leasing but is free to do so if it is able and willing to honor the original agreement.

During the term of state of emergency, the bank or leasing company shall not calculate default interest on due but unsettled liabilities and shall not initiate enforcement collection procedure, nor they will conduct any other legal measure for the purpose of collection of receivables from the clients. Besides, banks and leasing companies shall not be able to claim any compensation related to the costs stemming from adopted regulations.

For transparency and information purposes, in line with stated regulations, banks and financial leasing companies are required to publish the notification of offering of a moratorium on their internet pages upon which it will be considered that the notification has been sent to all clients (debtors). If the client within 10 days as of the publishing of such notification does not reject such a proposal it shall be considered that he has accepted the proposal without any obligation to visit the bank or financial leasing company.

Upon expiration of the above-mentioned deadline moratorium will have a legally binding effect but debtors will be allowed to repay their liabilities.

2020-03-25T11:18:01+00:00 March 23rd, 2020|

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