State aid in Montenegro during coronavirus crisis

Introduction

The Montenegrin Government has prepared a package of economic measures that is intended to help its citizens and the private sector fight the financial consequences of the COVID-19 pandemic. The package was adopted by the Government on 19 March 2020.

EU State aid law context

National State aid schemes (programs) introduced by EU Member States and individual aid granted by national instances must comply with the applicable EU State aid law. Member States may notify new schemes or grant aid in individual cases. These may be based, for example, on the European Commission's Temporary Framework, on the provisions of the Treaty (Art. 107(2) b) TFEU) on aid to rectify damages caused by exceptional occurrences or on the guidelines on rescue and restructuring aid for companies in difficulty. Further details can be found in the EU chapter.

National Public Support

Montenegrin Government's COVID-19 economic measures package

Who is eligible for the aid?

All taxpayers in Montenegro are eligible for the aid.

What does the aid consist of?

The Montenegrin Government’s economic measures package provides for the following fiscal measures:

  • all payroll tax and social security payments will be suspended for a period of 90 days;
  • income tax payments will be suspended for a period of 90 days;
  • all tax liabilities arising from the reprogramming of tax receivables will be suspended for a period of 90 days.

Where to apply for the aid?

By submitting an E-application to the Tax Authority.

Is a notification to the EU Commission necessary?

Listed fiscal measures are intended to be non-selective in nature, meaning they would not represent state aid and the regulator would not need to be notified.

Further remarks

No.


Montenegrin Government's COVID-19 economic measures package

Who is eligible for the aid?

Entrepreneurs, micro, small, medium and large enterprises directly impacted by the pandemic. Priority will be given to enterprises active in the supply of medicine, medical equipment, food and hygiene and those unable to pay salaries to the employees (small caterers, craftsmen, service providers, shops, etc.).

What does the aid consist of?

The Montenegrin Government’s economic measures package provides for the following liquidity support measure:

  • creation of a new line of credit from the Investment and Development Fund of Montenegro (“IDF”) intended to improve the liquidity of entrepreneurs, micro, small, medium and large enterprises up to a maximum amount of EUR 3 million per beneficiary, without an approval fee and with an interest rate of 1.5%, repayment period of eight years, including a two-year grace period; funds can be used for the purchase of goods, raw materials, semi-finished products, payment of net-salaries and rental costs. 

Where to apply for the aid?

Application should be submitted to the IDF along with a prescribed set of documents.

Is a notification to the EU Commission necessary?

The liquidity support measure is likely to represent an aid scheme that would need to be cleared by the regulator.

Further remarks

IDF will have a discretionary right to decide on individual requests depending on the needs of the applicant and pre-set priorities.

Anja Tasic
Anja Tasić
Attorney-at-Law
Belgrade
Picture of Rasko Radovanovic
Raško Radovanović
Partner
Belgrade