Even subsidies CANNOT HELP SERBIAN Fiat

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In 2018,Fiat Chrysler Automobiles (FCA) made a net profit of RSD 1.5 billion, owing to statesubsidies amounting to RSD 2.75 billion. Unlike in the previous year, when thestate paid 1.9 billion, last year, a new item appeared among the subsidies -“additional payments” worth RSD 970.2 million. The notes to thefinancial statements mention that the aid was paid in accordance with the 2009contract. Subsidies are recorded as operating income, but even they were notsufficient to record the positive result of the business operation after a lossof RSD 64.3 million. Reports on production decrease in Kragujevac are alsoshown in the income statement. From operating revenues amounting to RSD 111.7billion in 2017, revenues dropped to 88.3 billion in 2018. Since thisyear’s suspension of production in Fiat will last much longer than last year(about 140 days), a steep decline in operating revenues can also be expected inthe balance sheets for this year. It is difficult to sum up how much the statehas invested, directly in cash, in real estate and through various taxexemptions, although those who are familiar with the situation say that theamount exceeds a billion euros. However, subsidies are about to end in late 2019,when the 10-year contract concluded on 23 December 2009 expires. According tohim, based on the data from the financial statements, Fiat received cashsubsidies from the state, as well as relief based on taxes and contributionsfor the employees, exemption from VAT payment for the import of tools andequipment for suppliers, tax credit for investments in basic assets, which amountedto RSD 34.8 billion at the end of 2018, which is the amount by which thecompany was exempt from income tax, compensation for employee training, the socalled FAS training academy, as well as the guarantee for the EIB loan worthEUR 500 million, taken in 2012, where the interest rate lower than the marketvalue is valued as state aid of about 50 million euros. Most of theseincentives will no longer be paid after this year.

Source: Danas

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