Legislation Regulating the Settlement of Overdue Tax Debts

Details on the Amending Law Regulating the Settlement of Overdue Tax Debts have been provided, in a Decree published in the Official Gazette published dated 23 July 2021.

Online application

The application for inclusion in the Scheme should be submitted through online application on Ariadni Government Portal, within twelve months from the date of entry into force of the law i.e. by 29^th April 2022.

Eligibility

Debts are subject to regulation as follows:

• The total overdue taxes created from 1^st January 2016 until 31 December 2019, which at the date of the application have been confirmed in the Tax Department and have been assessed, regardless of whether they were settled by agreement with the Tax Department or as per court order. In case of inclusion in the Scheme, the aforementioned arrangements for partial payment of debts are lost.
• Amounts due on the submission of a self-assessment, relating to tax years up to 31 December 2019, in cases where the tax returns were submitted, but without the payment of the resulting tax amount.
• Persons eligible to settle the debts referred to in paragraphs (a) and (b) shall include, companies and self-employed persons with a decrease in their turnover for the year 2020 compared to the year 2019, at least by 25%, due to the restrictive measures taken to address the effects of the COVID-19 pandemic and who/which:

(i) are subject to VAT, or
(ii) are exempted from the obligation to register for VAT.

Instalments and relief

Relief on penalties and interest on overdue taxes of paragraphs (a) and (b), may be available, as follows:

One-off settlement	95%
2-8 monthly instalments	90%
9-15 monthly instalments	85%
16-21 monthly instalment	80%
22-28 monthly instalments	75%
29-35 monthly instalments	70%
36-42 monthly instalments	65%
43-49 monthly instalments	60%
50-56 monthly instalments	55%
57-60 monthly instalments	50%

Payment of instalments

The payment of the instalments is made via online banking of financial institutions using a unique payment code or, as the case may be, a service of the Tax Department.

Exemption from charges

Overdue taxes subject to the law Regulating the Settlement of Overdue Tax Debts, are no longer charged with penalties or interest arising from the relevant tax laws.

Termination of the Scheme

The settlement scheme is terminated, with the consequence of the obligatory immediate payment of the balance of the tax debt according to the provisions of relevant tax legislation, if the debtor:

(a) during the arrangement does not submit the income tax and VAT returns, which are due; or

(b) if a tax liability is created for periods subsequent to 31 December 2015 which has not been settled in any way; or

(c) delays the payment of any 5 cumulative instalments;

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Get in touch with our team for further details on the Law Regulating the Settlement of Overdue Tax Debts, and for assistance in the application process, as well as the subsequent steps for settlement.