On 24 December 2020, the Serbian government published a new decree that provides details on how the tax liabilities deferred under the fiscal stimulus decree of 10 April 2020 and additional governmental decision of 31 July 2020 are to be paid under the rescheduled terms. Deferred liabilities concern payroll tax and social security contributions (“SSC”) for salaries paid for the months of March, April, May (alternatively April, May, June) and August 2020, as well as monthly advances on corporate income tax (“CIT”) for March, April, and May 2020. The deferred due date for these liabilities was 4 January 2021 (5 January 2021 for payroll tax and SSCs on salaries for August 2020).
The new decree, which came into force on 2 January 2021, provides that the above tax and SSCs can be paid in 24 equal monthly instalments, with no interest accruing during the repayment period. This benefit works automatically, i.e. there is no application requirement. Taxpayers may waive the benefit at any time and settle the due tax obligations earlier.
Payroll tax and SSCs
With respect to payroll tax and SSCs, the first instalment is due on 10 February 2021, and each subsequent instalment on the 10th day of the following month. A monthly instalment cannot be less than RSD 1,000.
Although deferred, social security contributions will be deemed paid for the purposes of social security entitlements.
CIT advance payments
The first instalment of the deferred liability for CIT advance payments for March, April, and May 2020 is due on the 10th day of the month immediately following the month in which the annual CIT return for 2020 (or for the tax year that starts in 2020 but ends in 2021) is filed. For companies whose tax year started in 2019 and ended in 2020, and which will have filed their annual CIT returns by 31 January 2021, the first instalment is due on 10 February 2021, while each subsequent instalment is due on the 10th day of each following month.
The monthly instalment cannot be less than RSD 2,000.
The total amount of monthly advances on CIT for March, April and May 2020 to be paid under the rescheduled terms cannot exceed the amount due under the final annual CIT return for 2020 (or, in case of tax year different from calendar year, for the tax year that starts or ends in 2020). If the final annual CIT return shows that no amount is due above the sum of already paid monthly advances, the taxpayer will have no obligation in this respect and the rescheduled payment plan will not be relevant.
Loss of benefit
Those who do not timely file CIT return for 2020 (or, in case of tax year different from calendar year, one that starts or ends in 2020) lose the benefit of payment of deferred CIT obligations in instalments and must pay those deferred liabilities at once and immediately upon the lapse of the filing deadline. Those who do not timely pay an instalment of deferred liabilities (payroll tax, SSCs or CIT advances) lose the benefit with respect to all then outstanding deferred liabilities.
Corporate reorganisations
In case a taxpayer ceases to exist due to a merger as a result of which there is only one surviving entity, unpaid tax obligation is assumed by the surviving entity which continues to make payments under the same terms that applied to the merged entity (the original taxpayer) prior to the merger.
Corporate reorganizations that involve termination of one company and two or more surviving entities (e.g. division) cannot be completed until the original taxpayer (which is to cease to exist) pays the outstanding amount of its deferred tax liability.
In reorganization scenarios where the taxpayer continues with its existence (e.g. spin-off), it keeps the rights and obligations regarding the deferred payment of taxes.
Insolvency and liquidation
If a petition for the opening of insolvency is filed against a taxpayer whose tax liability has been deferred, the unpaid amount of the deferred liability will have to be reported in insolvency proceedings and will be settled in accordance with the insolvency legislation.
In case of a voluntary liquidation of a taxpayer, its tax obligation must be paid before the liquidation could be completed.
In case of a compulsory liquidation under the Companies’ Act, the full amount of the deferred tax obligation accelerates and becomes due on the date of the commencement of compulsory liquidation procedure.
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