Payment by installments: tax and EFCA

Amendments to settle debts of the tax inspectorate and insurance funds were presented to parliament on 28/07 late in the evening. Those who have lost the opportunity provided by the state to pay off debts in installments of 100 or 120 installments are given the opportunity to join the program again.

The government’s decision to pay off debts in connection with the pandemic with 36 interest-free or 72 percent payments will give a breather to thousands of households and businesses. The corresponding decree was submitted to parliament and concerns debts both to the tax and to insurance funds.

Those affected by the pandemic are given the option of debt restructuring for 100 and 120 doses. The main condition, of course, is that the debtor has suffered from the pandemic, and this is confirmed by a number of established criteria.

Finance Minister Christos Staikuras said yesterday that the minimum monthly payment on debts to the tax inspection will be 30 euros for debts up to 1000 euros and 50 euros for debts over 1000 euros. On the contrary, the minimum monthly payment on debts to EFKA is set at 50 euros per month.

What the amendment provides for the tax office
According to the amendment, the new agreement with 36 or 72 parts on the debt formed during the pandemic will cover the period from March 2020 to July 2021.

It will be possible to include most of the Covid19-affected taxpayers (based on the expanded KAD list), property owners who have made a Covid declaration, unemployed people who have registered with the OAED, and employees who have been suspended.

According to the amendment, the new regulation will be able to include payment of current taxes in installments (VAT, income tax, ENFIA, etc.), as well as insurance debts that arose during the pandemic.

The amount can be adjusted up to 72 payments with an interest rate of 2.5% or interest-free for 36 installments. The first installment will be paid by January 31, 2022. Please note that for those who decide to pay off the debt in more than 36 installments, the arrangement will include interest on all payments, and not on additional ones.

It is clarified that this year’s income tax and ENFIA cannot be included in the regulation, since this is not an overdue debt, but a confirmed one. The regulation applies to companies and individuals affected by the coronavirus and debts that have already been confirmed during the pandemic (from March 2020 to the present day).

Regarding reintegration in the provision on 100 and 120 contributions, this applies to victims who lost it during the same period. Both the first installment and the refund will be made with the installment paid by August 31st, while the remainder will go to the end of the setup.

Categories of debtors covered by this regulation:

Businesses and sole proprietors that have been classified by the Ministry of Finance as affected by KAD (extended KAD list from April 2020 will be used). It is estimated that eligible KAD includes 78% of companies and freelancers in the country. Employees whose employment contract has been temporarily suspended and who have received special compensation or have joined the Joint Cooperation program (Συν-Εργασία). Property owners who have received a reduced rent based on a Covid application. Unemployed persons registered during the specified period in the OAED.

According to the tax authority, of the 2 million potential beneficiaries of favorable debt regulation to the Greek state:

134 455 legal entities, 392 785 individuals engaged in entrepreneurial activities, 299 195 individuals, unskilled workers.

A total of 823,435 people currently have an outstanding tax arrears of 2.26 billion euros and are economically affected by the pandemic.





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