Covid-19: VAT, rent reduction and other measures adopted in Greece Legislative Act of 13.04.2020 & L. 4683/2020
By virtue of the Legislative Act published on 13.04.2020, new measures are adopted to confront the COVID-19 pandemic, the most important of which are presented here below:
1. 25% offset of March VAT against other tax debts
► Enterprises affected by the COVID-19 outbreak (as defined in the relevant Ministerial Decisions) that will fully pay their VAT obligations stemming from their VAT returns filed for the first trimester of 2020 (in case of single-entry books) or for March of 2020 (in case of double-entry books) up until 30.04.2020, are entitled to offset 25% of the VAT timely paid against tax debts or tax debt installments or partial repayment scheme installments owed to the Tax Administration, which are due from 01.05.2020 onwards.
► The full payment of VAT of February 2020 is set as a prerequisite for benefiting from such 25% offset, with the exception of enterprises whose operation was under suspension on 26.03.2020.
It is reminded that affected enterprises, as well as employees under employment contract suspension and eligible landlords (for which the payment deadline of their tax debts of March and April has been suspended up until 31.08.2020) are already entitled to a 25% discount in case of timely payment of their tax debt installments (VAT and withholding tax excluded) or partial repayment scheme installments (https://emeia.eyvx.com/406/82407/landing-pages/covid-19-tax-alert-eng-01.04.2020.pdf). Circular E. 2046/2020 issued on 09.04.2020 provided clarifications in relation to the abovementioned 25% reduction. Among others, taxpayers entitled to said reduction should pay 75% of the tax debt as depicted on Taxisnet. The 25% reduction will be granted in the immediate future following the verification of payment of 75%.
2. Retrospective change of Activity Code Number (KAΔ)
► For the purposes of applying the COVID-19 measures as of April 2020, the Tax Administration will accept retrospective changes of principal activity code number (KAΔ) made or to be made from 23.03.2020 and up until 24.04.2020 referring to the time period before 20.03.2020.
► As a prerequisite, the new principal activity code number (KAΔ) that is retrospectively declared should already be included in the Tax Registry as secondary activity code number before the Legislative Act of 13.04.2020 entered into force. Moreover, said new principal activity code number (KAΔ) must also be the one to which the highest gross income is attributed for FY19.
► In case of inaccurate declarations, apart from the sanctions imposed under L. 4174/2013 (the Greek Tax Procedure’s Code), the following sanctions are also cumulatively imposed:
► The enterprise is no more entitled to the discount or offset advantages granted in relation to its tax obligations and is also liable to pay back any amount corresponding to these advantages with interest.
► A penalty amounting to 10% of the enterprise’s gross income for FY19 and in any case not less than €10,000.
► A penalty equal to two times the amount of the special financial support granted to each of the enterprise’s employees in the form of a special purpose allowance.
► A joint Decision of the Minister of Finance and the Governor of the Independent Authority for Public Revenue may regulate any other matter relevant to the application of this measure.
3. Extension of rent reduction for business premises and main residences
L. 4683/2020 extended the rent reduction provided for in Legislative Act 20.03.2020 also to enterprises affected by the COVID-19 outbreak, as well as to their employees (whose employment contract has been temporarily suspended) for April 2020. In particular:
► Enterprises that have been affected by the COVID-19 outbreak are entitled to pay the agreed rent price of April reduced by 40% for their business premises.
► The same also applies for affected enterprises leasing movable or/and immovable assets for business purposes in the context of a finance lease.
► The 40% rent reduction for April is also granted to the employees of affected enterprises whose employment contract has been suspended, applicable to the rent of their main residence.
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