Q:
A:
Parliament adopts laws on debt abeyance, writing off interest on contributions
Belgrade,
5 November 2008
Serbian parliament today adopted the Law on debt abeyance and writing off interest on contributions for health insurance, as well as the Law on writing off interest on contributions for compulsory social insurance.
The Law on writing off interest on certain taxes and contributions for social insurance envisages partial or full write-off of the interest on the debt, depending on the repayment period, provided that debtors settle their obligations over the next four years.
The debts refer to ten kinds of taxes and contributions, including the tax on corporate profits, transfer of absolute rights and sales and income tax.
These are all old debts, 80% of them incurred in the 1990s.
The aim of the law is to help companies settle their ongoing obligations.
If the debt is settled before end-2008, the entire interest will be written off. If it is settled before end-March 2009, 75% of the interest will be written off, whereas if it is settled before end-June 2009, the debtor will have to pay 50% of the interest.
Once the law is applied to tax debts incurred before end-2007, total interest that would thus be written off amounts to RSD 15 billion.
The Law on debt abeyance and writing off interest on contributions for health insurance envisages abeyance until end-2011 for all debts, that is, for the interest on unsettled contributions incurred before end-2008.
If by that time the debtor regularly settles their ongoing obligations, the debt will be fully written off, otherwise they will have to pay both the debt and the accompanying interest.
At the end of 2007 the total debt for unpaid contributions for health insurance stood at around RSD 42 billion.
The debts refer to ten kinds of taxes and contributions, including the tax on corporate profits, transfer of absolute rights and sales and income tax.
These are all old debts, 80% of them incurred in the 1990s.
The aim of the law is to help companies settle their ongoing obligations.
If the debt is settled before end-2008, the entire interest will be written off. If it is settled before end-March 2009, 75% of the interest will be written off, whereas if it is settled before end-June 2009, the debtor will have to pay 50% of the interest.
Once the law is applied to tax debts incurred before end-2007, total interest that would thus be written off amounts to RSD 15 billion.
The Law on debt abeyance and writing off interest on contributions for health insurance envisages abeyance until end-2011 for all debts, that is, for the interest on unsettled contributions incurred before end-2008.
If by that time the debtor regularly settles their ongoing obligations, the debt will be fully written off, otherwise they will have to pay both the debt and the accompanying interest.
At the end of 2007 the total debt for unpaid contributions for health insurance stood at around RSD 42 billion.
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