The severity of SARS-COV-2 virus (COVID-19) epidemic has forced the authorities to pass a number of provisions and measures in order to manage the spread of the disease and its consequences. Below is the summary of the measures taken in the financial sector.
Act Determining Intervention Measures in Public Finance (in Slovene: Zakon o interventnih ukrepih na javnofinančnem področju)
On 20 March 2020, National Assembly of the Republic of Slovenia adopted the Act Determining Intervention Measures in Public Finance with the intention to make it easier for the taxpayers to fulfil their obligations. The Act came into force on 29 March 2020, the day after being published in the Official Gazette of the Republic of Slovenia.
Measures, such as extending the deadlines for submission of tax returns and annual reports, extending deadlines for paying tax obligations arising from the submitted tax returns and the possibility of instalment payments of tax obligations were introduced into the Act.
The deadlines for submitting tax returns for business income tax and corporate income tax and for submitting annual reports for 2019 are extended to 31 May 2020.
The Act also facilitates the conditions for the deferral of tax payment or instalment payment of tax liabilities. On the basis of the taxpayer’s application, the tax authority (FURS – Financial Administration of the Republic of Slovenia) allows the taxpayer to defer tax payment for up to two years or to pay their tax obligations in instalments (maximum 24 monthly instalments), and no interest shall be charged to that taxpayer.
Act on emergency measures on deferral of borrowers’ payment obligations (in Slovene: Zakon o interventnem ukrepu odloga plačila obveznosti kreditojemalcev)
On 20 March 2020, National Assembly of the Republic of Slovenia adopted the Act on emergency measures on deferral of borrowers’ payment obligations, which will, under certain conditions, facilitate borrowers’ deferral of payment obligations under credit agreements and thus alleviate consequences of the emerging economic situation due to the COVID-19 epidemic. The Act came into force on 29 March 2020, the day after being published in the Official Gazette of the Republic of Slovenia.
For more information on the said Act please visit https://en.kbp.si/blog/2020/03/20/act-on-emergency-measures-on-deferral-of-borrowers-payment-obligations/.
With regard to the above-mentioned measures, the Government of the Republic of Slovenia is preparing the first extensive legislation package in order to (hopefully) help the population and the economy.
The Expert Team has been established to assist ministries in the preparation of the first legislative #anti-Corona-package #ACP1 focused on the provision of rapid financial assistance to the population to prevent and mitigate the consequences of the epidemic.
In addition to measures taken by the government, the response to the current situation could also be, to some extent, facilitated by preventive restructuring proceedings, which, in addition to the restructuring of financial claims (as the ultimate aim of proceedings) also facilitates a stay of enforcement proceedings (i.e. “stand still” position) and moratorium on payment of financial claims.
For more detail on preventive restructuring proceedings please visit https://en.kbp.si/blog/2020/03/19/preventive-restructuring-in-the-light-of-current-economic-situation-epidemic-of-covid-19/.
SID Bank Actions
In cooperation with the Ministry of Economic Development and Technology, SID Bank (a promotional development and export bank, 100% owned by the Republic of Slovenia) will offer financial products totalling 800 million EUR to small and medium-sized companies (SMEs) and large companies, of which 200 million EUR worth are new or customized personalized products and 600 million EUR worth are existing products.
Financial products will be available to the market from April 2020 onwards.
The funds will be used to solve liquidity problems of companies (in terms of supply of services and products, reduced demand, downtime, problems in supply chains, problems with investments, including in the form of collateral and refinancing of loans taken from banks).
In particular, SID Bank will cover the loan segment from 100,000.00 EUR to 7 million EUR, with some existing programs up to 20 million EUR.
SID Bank will also adjust the assessment of the treatment of existing clients facing the consequences of COVID-19 (e.g. financial commitments, insurance, moratoriums, demonstration of eligibility of financing purposes, etc.).
At the same time, SID Bank is preparing portfolio guarantees to improve access to financing for companies, thus providing primary coverage for the risk of credit losses.
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In addition to the summary of measures taken in the Republic of Slovenia, please find attached a summary (Adriala Covid-19 Comparative Legal Guide Insurance, Banking and Finance and Restructurings) of the competent authorities’ measures prepared by Adriala alliance, a network of independent premium law firms based in 9 jurisdictions in the SEE region (Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, Macedonia, Montenegro, Serbia, Slovenia) and of which our law firm is a member.
Our law firm is actively following the latest COVID-19 developments. As always, you can contact us via e-mail or telephone +386 (0)1 2445500, or you can directly contact the lawyer you are generally in contact with.
Law Firm Kavčič, Bračun & Partners, o.p., d.o.o.
Ljubljana, 26 March 2020
All information contained herein is based on applicable law or obtained from publicly available data or other sources believed to be reliable. This document is for general information purposes only, may be subject to change and may not be used instead of a legal opinion/advice. KBP does not guarantee the accuracy of the information and shall not be liable for any damages or costs in connection with the use of, or reliance on, the information contained herein.