COVID-19

On 24 March 2020, the State of Emergency Act was promulgated in the State Gazette. The Act will come into force with retroactive effect as of 13 March 2020 except for some provisions which will come into force on the date of the promulgation.

On 26 March 2020, the state of emergency in the country was extended to 12 April 2020.

On 30 March 2020, the Council of Ministers has published a decree about the retention program (“the 60/40 measure”). By this measure, the state aims to support employers from specific sectors (retail trade, hotels, restaurants and bars, cinemas, tourist and tour operator activities, etc.) by covering 60% of the salaries of the employees and part of the employer`s insurance contributions. Some of the conditions for companies to be eligible to apply are:

• the work process has been suspended (in whole or partially) by an order of the employer or by state authority, or the employer has introduced part-time work;
• if the employer wants to benefit from the compensation, no employees should be dismissed for the period during which the company receives compensation;
• if the employer does not pay the remaining 40% of the workers’ compensation, they will also recover 60% of the state aid;
• the state aid will be provided for no longer than 3 months.

Other companies eligible for government assistance will be able to apply by declaring a 20% drop in sales. March will be used as a reference month.

General rules applicable

• The employer shall not grant access to the office to a sick or a quarantined employee.
• During the state of emergency, the employers may issue an order to assign work from home or telework to their workers and employees without their consent. The new provision states that in this case only the place of work will be changed, without changing the other terms of the employment contract.
• Employers may grant up to one-half (10 days) of the paid annual leave without the consent of their employees or workers.
• The Labour Code allows employers to introduce part-time work (for no longer than three months) for all employees or separate units.
• In the event of a state of emergency, the employer may issue an order to suspend the work of the entire or part of the company or individual employees. In such cases, during the period when the work is suspended the employee or worker is entitled to their gross remuneration.
• When all workers are employed in the company, this should be in a way that prevents them from grouping. In this relation, employers can introduce the so-called "Flexible working hours" or working hours with variable limits.
• Each of the above actions should be carried out by issuance of an order in written form. The order must be served personally to all employees or sent by e-mail, telephone or other means of communication.

Tax provisions

• The submission date for the annual tax returns under the Corporate Income Tax Act (CITA) and the Personal Income Tax Act (PITA) is extended to 30 June 2020.
• Companies with no activity in 2019, should submit the annual tax return until 30 June 2020.
• Extension of the period for submitting individual annual and consolidated financial statements by public interest entities and issuers - 31 July 2020.
• Extension of the period for submitting individual annual and consolidated financial statements – 30 September 2020.
• Extension of the period for submitting quarterly notification/statement of financial position of the public interest entities/issuers for the first quarter on an individual and consolidated basis, as well as for the presentation of six-month financial statements on an individual and consolidated basis – 30 September 2020.
• The submission deadlines for VAT, advance taxes and withholding tax remain unchanged.
• A discount of 5% is granted to persons who have paid the real estate tax or the vehicle tax for the whole 2020 up to 30 June 2020.

Financial statements submission

• The annual financial statements for 2019 could be signed utilizing qualified electronic signatures (where all the signatures on the annual financial statements and the audit report are electronic signatures, the professional seal of the registered auditor is not required).

Transparency report publication

• The obligation of the registered auditors to publish their transparency reports is extended until 31 July 2020 (previously 30 April 2020).

Financial support

• The Bulgarian State will allocate BGN 4,5 billion to support the national economy.
• The Bulgarian Development Bank will finance companies affected by COVID-19 by lending loans up to BGN 48 thousand (approx. EUR 22 thousand).
• On 3 April 2020, the Governing Council of the Bulgarian National Bank has adopted a decision to comply with the European Banking Authority (EBA) Guidelines on legislative and non-legislative moratoria on loan repayments applied in light of COVID-19 (EBA /GL/2020/02).
• On 5 April 2020, the Budget Committee has approved at second reading the updated state budget 2020.

Other measures

• No distraints shall be imposed on the bank accounts of individuals and medical centers, salaries and pensions.
• The payment deadlines for the electricity supply of household customers are extended from 10 days to 20 days.
• All announced public sales and entries into possession shall be suspended.
• The effects of late performance of the obligations of individuals and private entities, including interest and penalties for late payment, as well as non-monetary consequences such as early repayment, contract termination due to default and seizure of property, shall not apply.
• Notarial proceedings are restricted. The Notary Chamber ensures the availability of notaries on duty under a ratio of at least one notary per 50,000 inhabitants in the respective area.

Labour market

Incentive of Croatian Employment Bureau

The conditions for the incentive are that the employer has a reduced volume of business activities due to the COVID-19 crisis.

• Entitled firms: accommodation, restaurants, transportation and storage, health tourism, labour-intensive activities within the manufacturing industry, employers who are unable to perform their activities in accordance with the decisions of the Civil Protection Staff; other employers who can prove the impact of special circumstances.
• Amount: HRK 4000 per month for a full-time employee + social security contributions with respect to this amount. Granted for 3 months.
• How to apply: Application to the Croatian Employment Bureau, business difficulties have to be proven. The drop in revenue must be greater than 20%. This incentive is available only to employers who will maintain employment contracts.

Tax provisions

Some taxes’ payments have been postponed 3 months from the original due date. Such deferred amounts may be paid in installments over up to 24 months. The deadline for filing financial statements for 2019 to FINA will be prolonged.

• VAT liability is due within three months, starting with the VAT liability due in April 2020.
• VAT liability will be due forpayment upon collection of receivables per issued invoices. This applies to all taxpayers.
• Liabilities due for taxes (other than VAT), contributions and other public charges (excluding customs duties and excise duties) due until 20 June 2020.
• Sole proprietors whose 2019 turnover wasless than HRK 7.5 m and have a fall in turnover of more than 50% will be for free frompayment of corporate profit tax, personal income tax (wage taxes) and social security contributions for the period from April to June 2020.
• Sole proprietors whose 2019 turnover was higher than HRK 7.5 m and have a fall in turnover of more than 50% will be free from payment of corporate profit tax, personal income tax (wage taxes) and social security contributions proportionally to the amount of fall in turnover for the period from April to June 2020.

VAT on donations and imports

• Donations of goods and services for the purpose of mitigation of adverse COVID-19 effects will be VAT exempt.
• Import of goods for the purpose of mitigation of adverse COVID-19 effects will be exempt of customs and import VAT.
• Import VAT does not need to be paid to be recoverable, i.e. reverse charge mechanism applies.
• The abovementioned exemptions apply to goods imported or donated by 20 June 2020 and the first exemption applies to the VAT liability due in April 2020.

Financial support

European structural and investment fund (ESIF) microloans for working capital

• Entitled firms: Micro (less than 10 employees, operating income or assets up to EUR 2 million) and small businesses (less than 50 employees, operating income or assets up to EUR 10 million) that have at least 1 employee, 50% private ownership and who did not have accounts blocked more than 30 days in the last 6 month period nor outstanding public liabilities.
• Amount: From EUR 1,000 to EUR 25,000.
• Interest rate: 0.5% - 0.75% - 1.00%.
• Grace period: Up to 12 months.
• Maturity: Up to 3 years including a grace period.
• Collateral: Promissory note (and other collateral depending on risk assessment).
• Purpose: Working capital. Prohibited use for VAT financing, refinancing of existing liabilities, settlement of public liabilities or liabilities to financial institutions.

COVID-19 loans for working capital

• Entitled firms: Micro (less than 10 employees, operating income or assets up to EUR 2 million) small (less than 50 employees, operating income or assets up to EUR 10 million) and medium businesses (more than 50 employees, operating income or assets exceeding EUR 10 million) which recorded a decrease in revenues of more than 20% in the first quarter or forecast such decline in the following periods; have at least 1 employee, 50% private ownership and who did not have accounts blocked more than 30 days in the last 6 month period.
• Amount: Up to HRK 750,000 (approx. EUR 100,000).
• Interest rate: 0.25%.
• Grace period: Up to 12 months.
• Maturity: Up to 5 years including a grace period.
• Collateral: Promissory note.

On 18 March 2020, the Hungarian Government introduced amendments to tax and social security law as a response to the economic effects of the coronavirus outbreak.

Social security incentives

Modified social security rules shall be applied for the period of March-June 2020 to the following sectors:

• hospitality and tourism;
• entertainment, film industry, performing art;
• sport services;
• event organization;
• gambling.

The rules for social security contributions in the above sectors have been amended as follows:

• employers will not be liable to pay their part of social security contributions (17.5%+1.5%) with respect to employment income provided by them in the March-June 2020 period;
• employees will only be liable to pay 4% healthcare social security contribution on the employment income received in the March-June 2020 period, instead of the aggregated 18.5% social security contribution. Nevertheless, the upper limit of the above healthcare social security contribution will be HUF 7,710/month. It should be noted that personal income tax will be still payable.

Tax provisions

Simplified lump-sum taxation amendments

Special rules will be applicable for sole proprietors who opted for simplified lump-sum taxation (known as ‘KATA’ in Hungarian). Based on the amendments such sole proprietors are not obliged to pay lump-sum tax in the March-June 2020 period.

• Among areas falling within the scope of ‘KATA’ exemption, are taxi-drivers, hairdressers, beauticians, decorators, glaziers, electricians, other human health care service providers, performing artists, plumbers, gas and heating technicians, carpenters, those working in inpatient care, floor and wall tilers, personal trainers, persons engaged in other sporting activities, and those catering for the needs of the elderly and persons with disabilities.
• The deferment of ‘KATA’ debts incurred before 1 March is also authorized; taxpayers in arrears with such payment liabilities will be required to pay these debts in the quarter following the end of the state of danger.
• Hungarian media providers will also be granted an exemption due to their lost advertising revenues.

Surtax on credit institutions and the retail sector

• New surtaxes apply and will be levied on credit institutions and the retail sector as part of the government’s response to the coronavirus pandemic.
• The surtax to be levied on credit institutions (published in Decree 108/2020. (IV. 14.) on 14 April 2020) has an effective date of 1 May 2020.
• Based on this decree, credit institutions will be required to pay surtax in the 2020 tax year. They will be required to declare the amount of the surtax on a separate form by 10 June 2020 and to pay the amount of the surtax in equal instalments by 10 June, 10 September and 10 December 2020.
• The base of the surtax is the amount of the adjusted balance sheet total exceeding HUF 50 billion (the adjusted balance sheet total will be based on the data of the annual report for the second tax year preceding the given tax year). The tax rate is 0.19%.
• The surtax on the retail sector has an effective date of 1 May 2020. The new retail surtax is comparable to the “crisis tax” that applied in 2010-2012, although some aspects of the retail surtax are more extensive in that it applies to more than just domestic retailers – it also applies to foreign retailers in certain circumstances. The following retail activities will be subject to the surtax:

• retail sale of motor vehicles and motorcycles, parts and accessories;
• any other retail sale, including sales in non-specialised shops (e.g., stalls and markets), or made by mail order houses or through the internet.

• The basis of the retail tax is the net sales revenue deriving from the taxable activities or in case of foreign taxpayers, the net sales price increased by the income derived from services provided by the taxpayer to the supplier of the goods sold, or the discount provided by such suppliers.
• The rate of the retail tax is as follows:

• 0% up to a tax base of HUF 500 million;
• 0.1% to a tax base between HUF 500 million - 30 billion;
• 0.4% to a tax base between HUF 30 - 100 billion;
• 2.5% to a tax base exceeding HUF 100 billion.

Other measures

Loan incentives

• A decision has been made about the suspension of evictions, confiscations and tax-related executions; existing tax debts will have to be paid after the end of the state of danger.
• Property lease contracts cannot be terminated, nor can the owner raise the rent.
• Tourism development contribution would be suspended till June 30.
• The various maternity entitlements expiring during the state of danger will be extended; mothers will be kept in their present status for the duration of the state of danger.
• The government has decided to suspend until the end of the year the capital and interest rate payment obligations of both private individuals and businesses under effective loan agreements.

Central Bank

Financial measures

• Direct financial support in the form of interest-free loans in the amount of EUR 3,000 to EUR 30,000 to micro, small and medium-sized companies by the Development Bank of North Macedonia.
• Interest-free loans to companies in the amount of EUR 5.7 mln, plus EUR 6 mln (22 March).
• Subsidizing the mandatory social security contributions ("SSC") for employees in companies in the sectors of tourism, transport, restaurants and other affected companies, for April, May and June of 2020. The mandatory SSC would be subsidized up to 50% of the average salary paid in 2019.
• The base interest rate of the National Bank has been decreased to 1.75%.
• The statutory-prescribed contractual penalty interest rates will be decreased to 5% (previously 10%) and 4% (previously 8%).
• Decrease of the April and May 2020 salaries of the government officials, as well as other public sector employees to the minimum salary, which currently is MKD 14,500 (EUR 235). Presidents and members of municipal councils, management and supervisory boards of public institutions will work without remuneration.
• The enforcement law is suspended until the end of June. The enforcement agents will be obliged to stop taking any enforcement actions.
• Moratorium on loans, beneficiaries are entitled to postpone all loan obligations for three months.
• Special allowances and exemptions for economically vulnerable categories (athletes, artists, recipients of social benefits).
• Companies will be legally protected from going into bankruptcy during the crisis.
• Extension of the validity period of bank guarantees issued for the purposes of the customs procedures with economic effect. The customs authorities, with approval by the domestic banks, will automatically prolong the validity of the bank guarantees to 30 June 2020 or to 30 September 2020.
• New EUR 50 mln low-interest loans from commercial banks.

  Tax measures

• The Public Revenue Office has announced that it will not issue decisions for forced collection of tax debt, as well as other public duties (fines, court stamp fees) for all taxpayers who have not settled their duties to the tax office.
• The deadline for submission of the annual financial statements and CIT returns for FY19 for all taxpayers has been extended until 24 March 2020.
• Exemptions from paying the monthly advance CIT payments for companies affected by the COVID-19 crisis for the period April, May and June 2020.

  Other measures

• Penalty interest for late payment of public duties will be reduced by half, namely from 0.03% to 0.015%.
• Full exemption from import customs duties for import of basic products (basic products refer to wheat flour, sunflower oil, white sugar, soaps, detergents, clothing and accessories, diapers for children and adults) and medical supplies and equipment necessary for handling the COVID-19 crisis.
• All funds provided for the development, promotion and support of tourism to be reallocated to the Tourism Fund in order to compensate the tourist economy for overcoming the crisis in accordance with the number of employees.
• State funded minimum salaries for every employee in the private companies affected by the crisis for the period April and May 2020 (under several conditions).
• Monthly cash allowance for citizens who have lost their jobs due to the crisis, amounting to 50% of the average employee’s salary.
• Subsidy of MKD 7000 (EUR 115) per household for unemployed persons or persons who were part of the informal economy.

Labour market

Allowance During The Labor Contract Suspension

• Labour code allows the company, during an interruption or temporary reduction of activity due to economical, technological, structural or similar reasons, to dispose labor contract suspension, unilaterally. During this period, the employee should receive an allowance, no lower than 75% of its base salary for the position he is occupying. This allowance represents a cost for the company.

Allowance for “technical unemployment” from public funds shall be borne from the unemployment insurance budget, in accordance with the ordinance, under the following conditions:

• the employer temporarily reduces or interrupts the activity – in whole or in part – as a result of the effect of the coronavirus epidemic;
• only during the decreed state of emergency;
•  in a maximum amount of 75% of the gross salary, but no more than 75% of the average gross wage provided by the Law of the state social security budget for 2020 (maximum 4.071 lei gross);

• submission of a self-declaration regarding the reduction or interruption of the activity.

• The deadline for the financial statements due on 30 May 2020 is postponed until 31 July 2020.

Tax provisions

Measures implemented by Romanian Tax Authorities

• Suspending or not starting the foreclosure of the amounts due to the State budget. In this respect, no more payment notifications, garnishments and seizures will be issued or started, except for the amounts decided by Courts in criminal matters.
• VAT refund payments will be made in March, for all processed returns for which reimbursement decisions have been issued.
• A new VAT reimbursement system will be implemented starting 1 April 2020, which will be aimed to promptly settle the tax returns.
• Tax related audits (e.g. tax inspections, anti-fraud controls) will be suspended, except for the reviews and checks that may be done remotely and the cases in which there are indications of tax evasion.
• The deadline for the tax returns due on 25 March 2020 is postponed until 25 April 2020.
• For local taxes, the payment term is deferred from 31 March 2020 to 30 June 2020.

Bonuses to the corporate income tax

• Corporate income taxpayers (including those applying specific taxes), regardless of their submission and payment system, who pay the tax due for the first quarter of 2020, or the advance payment for the same quarter, until the standard deadline of 25 April 2020, will benefit from a tax bonus, computed as follows:

5% for large taxpayers;

10% for medium and other taxpayers.

Other measures

Loans suspension

• The beneficiaries of the above mentioned emergency ordinance are natural persons, authorized natural persons, individual companies and family businesses, the persons exercising liberal professions and the ones exercising on the basis of special laws, regardless of the form of exercising the profession, as well as the legal persons – parties in the credit or leasing contracts.

Legislation providing emergency measures has been enacted and is effective as of 29 March 2020. In addition, the National Assembly on 2 April 2020 passed legislation that is intended to mitigate the effects of the COVID-19 pandemic on citizens and the economy. The legislation has an effective date 11 April 2020.

Central Bank measures

• Moratorium on loans: beneficiaries are entitled to postpone all loan obligations, that were due after the announcement of epidemic in Slovenia, for 12 months.

Tax measures

• Delayed deadlines for tax and annual reports submission: from 31 March 2020 to 31 May 2020.
• The informative tax calculation for individuals (prepared by the Slovene Tax Authorities) will be issued to Slovenian residents by 30 June 2020. Taxpayers that do not receive the calculation by 15 July 2020 are not required to file the annual tax return for 2019 until 31 August 2020.
• Deferral of tax liabilities: It is possible for taxpayers to defer tax payment for up to 24 months or to repay tax in up to 24 installments with no additional interest charged for that period.

Other measures

Ministry of Economic Development and Technology

• Liquidity improvement measures: EUR 25 mln in quick loans for SMEs in highly exposed sectors (EUR 25 - 125 thousand), EUR 80 mln in guarantees for bank loans for investments up to EUR 1 mln, EUR 10 mln in micro-loans from EUR 5,000 - 25,000.
• Government guarantees: for companies in distress, EUR 6 mln available.
• Tourism support: training on crisis management, promotion of Slovenia as healthy tourist destination and analysis of coronavirus effects on tourism in Slovenia.
• Support for sole proprietors: postponement of social contributions payments for April, May and June 2020 by 31 March 2022.

Slovenian Export and Development Bank

• Financing support intended to solve corporate liquidity problems, including liquidity in the supply of services and products, problems with reduced demand, etc.

Ministry of Labour

• Salary contributions: 40% government contribution to the cost, when an employee is put on waiting and 100% when he/she needs quarantine. The basis for both is 80% of salary. The goal is to keep at least 50% of all employees in endangered companies.