Serbia 22 March 2013 Dace Berkolde Director Ministry of Finance Latvia Horizontal state aid for SMEs

 Commission Regulation No 800/2008 of 6. August 2008 on application of Art. 87 and 88 of the Treaty declaring categories of aid compatible with the common market (General block exemption regulation)  Guidelines on state aid for environmental protection (2008/C 82/01)  Community framework for state aid for research and development and innovation (2006/C 323/01) Dace Berkolde Legal base

 Aid for consultancy services  Aid for participation in fairs and exhibitions  Aid for female entrepreneurship  Aid for creation of employment  Aid for R&D&I  Aid for environmental protection Dace Berkolde Types of aids

 Eligible costs shall be the consultancy costs of services provided by outside consultants  Services shall not be a continuous or periodic activity  Services shall not be an usual operating costs of the undertaking (for ex., routine tax consultancy services, regular legal services or advertising)  Aid intensity shall not exceed 50% Dace Berkolde Aid for consultancy services

 In question only first participation  Aid intensity shall not exceed 50%  Eligible costs : renting, setting up and running the stand Dace Berkolde Aid for the participation in fairs and exhibitions

 Beneficiaries - small enterprises newly created by female entrepreneurs  Aid amount shall not exceed EUR 1 million per undertaking (annual amount of aid per undertaking shall not exceed 33 % of this amount) ! Small enterprises controlled by shareholders of undertakings that have closed down in the previous 12 months cannot benefit from aid if the enterprises concerned are active in the same relevant market or in adjacent markets  aid intensity ≤ 15% of eligible costs incurred in the first five years after the creation of the undertaking Dace Berkolde Aid for female entrepreneurship

 Eligible costs: legal, advisory, consultancy and administrative costs directly related to the creation of the small enterprise, as well as: a) interest on external finance and a dividend on own capital employed not exceeding the reference rate; (b) fees for renting production facilities/equipment; (c) energy, water, heating, taxes (other than VAT and corporate taxes on business income) and administrative charges; (d) depreciation, fees for leasing production facilities/equipment as well as wage costs; (e) child care and parent care costs including, where applicable, costs relating to parental leave. Dace Berkolde Aid for female entrepreneurship

 Three types of support measures 1)Creation of employment 2)Recruitment of disadvantaged and disabled workers 3)Specific support measures to cover the additional costs of employing disabled people Dace Berkolde Employment aid

 SMEs; Large firms only in areas qualifying for regional aid  Aid for job creation linked to initial investment  A job is linked to the initial investment if it concerns the activity to which the investment relates and if it is created within three years of the investment’s completion Dace Berkolde Specific conditions: Employment aid Creation of employment

 The estimated wage costs of employment directly created by the investment project, calculated over a period of two years  The costs of investment in tangible and intangible assets Dace Berkolde Specific conditions: Employment aid - eligible costs

 When employment is created in areas outside 87(3)(a) or 87.(3)(c): -20% for small enterprises -10% for medium-sized enterprises Dace Berkolde Specific conditions: Employment aid Maximum aid intensities

 Aid can be provided whatever the location of the beneficiary Dace Berkolde Specific conditions: Employment aid recruitment of disadvantaged and disabled workers

 Definition: any person who belongs to a category which has difficulty entering the labor market without assistance ( young person, long term unemployed person, member of ethnic minority...etc)  Member states can notify aid to promote the recruitment of other categories they consider to be disadvantaged Dace Berkolde Specific conditions: Employment aid definition of disadvantaged workers

 Person that is recognised disabled under national laws  Person having a recognised, serious physical, mental or psychological impairment Dace Berkolde Specific conditions: Employment aid definition of disabled workers

 Wage cost  The intensity of the aid is calculated as a percentage of the wage costs: -max 50% for disadvantaged workers (over a period of 1 year following recruiment) -max 75% for disabled persons (over any given period during which the disabled worker is being employed)  ! Net increase in the number of employees Dace Berkolde Specific conditions: Employment aid eligible costs and aid intensities

 Costs of: adapting premises, employing staff for time spent solely on the assistance of the disabled worker, costs of adapting or acquiring equipment for their use  where beneficiary provides sheltered employment (establishment where at least 50% of the employees are disabled workers): -costs of constructing, installing or expanding the establishment concerned - any costs of administration and transport which result from the employment of disabled workers Dace Berkolde Specific conditions: Employment aid additional costs of employment of disabled workers

STATE AID FOR ENVIRONMENTAL PROTECTION Dace Berkolde

 Undertakings going beyond EU standards/increase the level of envir.protection in the absence of Community standards (investm. aid)  Acquisition of new transport vehicles which go beyond Community standards/ increase the level of envir.protection in the absence of Community standards (investm. aid)  Early adaptation to future mandatory standards (inv.aid)  Environmental studies  Energy savings (inv+operating aid)  Renewable energy sources (inv+operating aid)  High-efficiency cogeneration of heat and electricity (inv+operating aid) Dace Berkolde Compatible measures

Energy-efficient district heating (inv.aid)  Waste management (investment aid)  Remediation of polluted sites  Relocation of undertakings for environmental reasons  Tradable permit schemes  Environmental tax exemptions or reductions Dace Berkolde Compatible measures

 Extra investment costs necessary to achieve a higher level of environmental protection  Two step calculation: 1.Cost of the investment directly related to environmental protection (costs can be easly identified) or Reference investment (based on the counterfactual situation in the absence of State aid): a technically comparable investment that provides a lower degree of environmental protection that would credibly be realised without aid (the same production capacity and all other technical characteristics 2.Deduction of operating benefits and adding of possible increased operating costs Dace Berkolde Investment aid - Eligible costs

 Same eligible costs may be subject to several guidelines Example: Eligible costs (regional aid) = 200 th Eligible costs (environmental aid) = 100 th Regional aid intens.: 50% (200) = 100 Env aid intens.:50% (100) = 50 or Regional aid intens.: 20% (200) = 40 Env aid intens.: 50% (100) = 50 Dace Berkolde General principles

 Energy savings  Renewable energy sources  High efficiency cogeneration Dace Berkolde Operating aid

 Limited to compensation of the net extra production costs resulting drom the investment  Benefits resulting from energy savings and investment aid must be deducted from production costs  Aid is limited to 5 years  Aid intensity: - gradually decreasing aid: up to 100% of extra costs the first year, must fall in a linear way to 0 by the end of the 5th year - non-degressive aid: up to 50% of extra costs Dace Berkolde Energy savings

 Compensation for the difference between the costs of producing the energy from the renewable source and the market price of the energy concerned  3 assessment options: Option 1: aid may be granted to compensate for the difference between the cost of producing enrgy from renewable sources, including depreciation of extra investments for environmental protection, and the market price of the form of energy concerned. Aid may be granted until the plant has been fully depreciated. Dace Berkolde Renewable energy sources

Option 2: use of market mechanisms, e.g. green certificates Option 3: max 50% of extra production costs or degressive from max 100% to 0%; duration limited to 5 years Dace Berkolde Renewable energy sources

 Shall be in compliance with definition of high- efficiency co-generation and new cogeneration unit make primary energy savings compared to separate production  May be granted to undertakings distributing electric power and heat to the public where the costs of producing such electric power or heat exceeds the market price and  For the industrial use where the production costs of one unit of energy exceeds the market price of one unit of conventional energy Dace Berkolde C0generation

 Costs and revenues resulting from the production and sale of the electric power or heat must be taken into account  The same assessment options as for renewable energy sources Dace Berkolde C0generation

STATE AID FOR RESEARCH AND DEVELOPMENT AND INNOVATION STATE AID FOR RESEARCH AND DEVELOPMENT AND INNOVATION Dace Berkolde

-Project aid : fundamental &industrial research and experimental development -Technical feasibility studies -Industrial property rights costs for SME -Young innovative undertakings -Process and organizational innovation in services - Innovation advisory services & innovation support services -Loan of highly qualified personnel -Innovation clusters Dace Berkolde State aid measures

 Aid for obtaining and validating patents and other industrial property rights  Aid intensity up to the same level of R&D aid in respect of the research activities which first led to the property rights concerned. Dace Berkolde Industrial property rights costs for SMEs

 Eligible costs are: (a) all costs preceding the grant of the right in the first legal jurisdiction, including costs relating to the preparation, filing and prosecution of the application as well as costs incurred in renewing the application before the right has been granted; (b) translation and other costs incurred in order to obtain the granting or validation of the right in other legal jurisdictions; (c) costs incurred in defending the validity of the right during the official prosecution of the application and possible opposition proceedings, even if such costs occur after the right is granted. Dace Berkolde Industrial property rights costs for SMEs

-Beneficiaries - small enterprises operating less than 6 years at the granting of aid) -Innovative enterprise: a)the R&D expenses of the beneficiary represent at least 15 % of its total operating expenses in at least one of the three years preceding the granting of the aid; b) in the case of a start-up enterprise without any financial history – basing on the audit by an external auditor of the current fiscal period; c)on the basis of a business plan, that the beneficiary will in the foreseeable future develop products, services or processes which are technologically new or substantially improved compared to the state of the art in its industry in the Community, and which carry a risk of technological or industrial failure, Dace Berkolde Aid for young innovative enterprises

 Max aid amount: EUR 1 million in non- assisted areas, EUR 1,25 million in 107 (3) (c), EUR 1,5 million in 107 (3) (a)  beneficiary may receive the aid only once during the period in which it qualifies as a young innovative enterprise  Other aid, except R&D&I and risk capital, can be granted only after 3 years Dace Berkolde Aid for young innovative enterprises

 the aid does not exceed EUR per beneficiary within any three year period  the service provider benefits from a national or European certification (Otherwise only 75%)  the beneficiary must use the State aid to buy the services at market price Dace Berkolde Aid for innovation advisory services (1) and innovation support services (2)

- eligible costs (1): management consulting, technological assistance, training, technological assistance; technology transfer services; training; consultancy for acquisition, protection and trade in Intellectual Property Rights and for licensing agreements; consultancy on the use of standards -eligible costs(2): office space, data banks, technical libraries, market research; use of laboratory; quality labelling, testing and certification Dace Berkolde Aid for innovation advisory services (1) and innovation support services (2)

 Aid for the loan of highly qualified personnel seconded from a research organization or a large enterprise to an SME  Seconded personnel must be employed in a newly created function  Personnel must have been employed for at least two years in the research organisation or the large enterprise, which is sending the personnel on secondment Dace Berkolde Aid for the loan of highly qualified personnel

 The seconded personnel must work on R&D&I activities within the SME receiving the aid  Aid intensity: 50 % of eligible costs for a maximum 3 years  Eligible costs: all personnel costs for borrowing and employing highly qualified personnel, including the costs of using a recruitment agency, as well as a mobility allowance for the seconded personnel. ! consultancy costs (payment of the service rendered by the expert, without employing the expert in the undertaking) are not eligible Dace Berkolde Aid for the loan of highly qualified personnel

CONDITIONS AND LIMITATIONS Dace Berkolde  Necessity/Incentive effect  Excluded sectors  Cumulating principle