Aid for Preservation of Employment (COVID-19) – amendments of the criteria for May and introduction of aid for June

At the session held on 29 May 2020, the Management Board of the Croatian Employment Agency (CEA) has adopted the following:

Amendments of criteria for May 2020 – only relating to employers employing 50 or more employees:

• Approval of aid is dependent on the criterion of revenue decline in May 2020 by at least 20% compared to May 2019 - proof based on the submission of the VAT form for May 2020 and May 2019 to the Tax Administration (employers operating for less than 12 months must prove a revenue decline by at least 20% in May 2020 compared to February 2020)

• Applicable to both existing beneficiaries and those employers who are applying for May for the first time

• Obligations of the employer - an employer who requested aid for 50 or more workers in May 2020, will be obliged to return the aid if, from the moment of receiving the aid until 31 December 2021, he acts in one of the following ways

1. pays out dividends or share of profits or other equivalent considered to be a distribution of profits of any tax period;

2. if own shares are allocated to members of the management board and/or executive directors and/or procurators and/or other persons authorized to manage all or part of the company;

3. grants the right to call options of own shares or any other right based on the value of own shares to the persons referred to in point 2;

4. makes payment to persons referred to in point 2 of any amount such as: bonus for achieved results, reward for work results above the non-taxable amount prescribed by personal income tax regulations and other similar receipts taxed as income from self-employment or other income, in accordance with personal income tax regulations;

5. acquires own shares

Introduction of the aid for June 2020 – main characteristics:

• Target groups of employers - sectors:
  • Agriculture, forestry and fishing - only crop and livestock production, hunting and related service activities and fishing
  • Transport and storage - primarily passenger transport (rail, land, air and water)
  • Accommodation and food and beverage service activities
  • Administrative and support service activities - only renting and leasing activities and travel agencies, tour operators and other booking services and related activities
  • Arts, entertainment and recreation – only creative, artistic and entertainment activities, entertainment and recreational activities and production and showing of films and video films, sound recording and music publishing activities and distribution thereof
  • Other service activities – only repair of computers and personal and household goods and other personal service activities
  • Organizers of cultural, business and sports events, organizers of fairs and weddings, and related activities such as equipment rental companies, audio and video recording, ticket sales, hall rental and other companies that generate most of their income from events and public gatherings
• Aid amount: HRK 4,000 for June per employee working full time, proportionate amount per employee related to number of part time working hours

• Registration via online application in the period from 8 June to 30 June 2020

• Duration: each month the Management Board of CEA decides to extend the measure

• Criteria: a decrease in revenue by at least 50% in May 2020 compared to May 2019, based on the submission of the VAT form for May 2020 and May 2019 to the Tax Administration. If the employer operates for less than 12 months, it is necessary to prove a decrease in revenue by at least 50% in May 2020 compared to February 2020 based on the submission of the VAT form for May and February 2020 to the Tax Administration.

• Application of the above criteria for returning of the aid (related to payment of dividends) for employers who have requested aid for 50 or more employees