Filenews 10 July 2022 - by Eleftheria Paizanou
In the end, the majority of businesses had the money to pay off their tax debts to the state, despite its inclusion last year in the new Plan for the Settlement of Overdue Tax Debts with instalments. This is shown by the data of the Tax Department, according to which 84% of the arrangements for debts created in 2021 were repaid in one instalment and the debtors took advantage of the maximum exemption of interest and charges for the late repayment of the state to their advantage.
Specifically, out of the 5,254 arrangements made last year, through which the state will receive a total amount of €46.7 million, tax debts amounting to €18.2 million have been paid in a lump sum. From the repayment of debts with only one instalment, the debtors were relieved of additional charges and interest. Under the Scheme, debtors who repay their tax debts in a lump sum are exempt from 95% of interest and charges.
In April last year, due to the continuation of the coronavirus pandemic, a new regulation on overdue tax debts was put in place through a bill approved by parliament, to help taxpayers who have had a financial impact from COVID. Beneficiaries, for one year, i.e. until April this year, could join the new scheme for the tax periods from 1/1/2016 to 31/12/2019. The new regulation could include companies that were registered in the VAT Register and showed a decrease in turnover by at least 25% for the year 2020, compared to the year 2019. Also, in the event that the company was exempted from the obligation to register in the VAT Register (approved private tutoring schools, conservatories / music schools and dance schools), they would have to show a decrease in turnover by at least 25% for the year 2020, compared to the year 2019.
Businesses that created a new repayment plan for their debts, submitted all tax returns for the years 2016 - 2019. It should be noted that debts until 2015 were covered by the previous legislation and no person was given the right to settle debts created until 31/12/2015. That is, no person had the right to make a tax debt arrangement after the implementation of the plan.
From the analysis of the data of the Tax Department in which "F" proceeded, it seems that in 2021 5,254 new regulations were created, recording a decrease of 37,6% compared to the new regulations of 2020 (8,416). The 5,254 new arrangements of 2021 concerned a total tax amount of €57.3 million, with a final tax amount after the deduction of €46 8 million. Most of the debts repaid last year from the new arrangement made concern income tax and the special contribution for defence. In detail, out of the total debts, €57.3 million, settled (without the write-off of interest and charges), an amount of €33.5 million related to income tax debts, €17.7 million debts for the special contribution for defence, €3.4 million vat debts, €2 million real estate debts and €1 million special levy on defence.
The provisions of the plan
Initially, the Arrears Settlement Plan was implemented on July 3, 2015 and after continuous extensions given by the Parliament, it remained in force for more than six years. The plan was quite generous, as the fewer instalments the taxpayer agreed, the greater discounts he received. The plan included arrears for income tax, VAT, property tax, special contribution for defence, capital gains tax and inheritance tax. Interest and surcharges were written off as follows:
● Debtors who paid their tax debts in a lump sum were exempt from 95% of interest and charges
● From two to eight monthly instalments, the exemption from additional charges was at 90%
● From 9 to 15 monthly instalments the exemption was 85%
● From 16 to 21 instalments 80% of the charges are written off
● From 22 to 28 instalments the exemption from interest and charges was 75%
● From 29 to 35 instalments the exemption of additional charges was at 70%
● From 36 to 42 instalments taxpayers were exempt from 65% of the extra charges
● For 43 to 49 instalments the exemption was 60%
● From 50 to 56 instalments there was a 55% discount
● From 57 to 60 monthly instalments, the exemption was 50%.
At the end of the arrangements, €566.2 million will be put into the coffers.
Until the completion of all arrangements for arrears to the state that are still active, the state will receive a total amount of €566.2 million. However, before the write-off of interest and charges, the tax debts included in the scheme were €705.1 million. In total, 40,008 arrangements were made, from which taxpayers participating in the scheme benefited from a deduction of €184.8 million. This means that it is now well known to businesses that it is possible through the delay in the payment of their taxes to have, at some point, a benefit, taking advantage of one of the repayment plans, with the possibility of finally avoiding any charges for the delay.
It is worth noting that initially arrears of around €972 million would have been settled, but 3,882 regulations were cancelled, due to the failure of taxpayers to fully implement the provisions of the plan approved by the Parliament. The cancelled arrangements concerned debts to the Tax Department of €266.9 million. Consequently, the active arrangements were 36,198, for debts of €705.1 million, but €566.2 million will be put into the state coffers.
The settings
Of the total arrangements, from 2017 to 2021 (36,198), most were made in 2018. Specifically, in 2017, 9,245 arrangements were made, for an initial amount of tax debt of €323.4 million and after the discount the state received €265.6 million. In 2018, a total of 11,066 taxpayers shook hands with the Tax Department to pay off debts of €380 million, but after the deductions granted, the Tax Department received €308.9 million.
In 2019, another 6,099 taxpayers settled tax debts totalling €130.5 million, of which the state received €102.2 million. In 2020, 8,416 arrangements were made for debts of €80.7 million, but after the cancellation of the charges, the state put €63.5 million in its coffers. Finally, in 2021, another 5,254 arrangements were made for debts of €57.2 million, but an amount of €46.7 million was collected.
What did the state get
By the end of 2021, the total collection from the draft regulation amounted to €534. 5 million, with the largest part of the collection coming from the settlement of tax debts related to income tax (60.1%) and an extraordinary contribution for defence (27.9%). Therefore, with this data, the department has to receive another €31.7 million, which it may have received so far. Of the €534.4 million received by the Tax Department, €321.2 million related to arrangements for income tax debts, €148.9 million debts to the special contribution for defence, €29.6 million VAT debts, €22 million property tax debts, €12.3 million capital gains tax.
