In this dire time, not only for Greece but for the whole wide world, Grant Thornton stays true to its promise to continue informing you on matters that are directly related to the challenges that businesses are facing due to the pandemic. In that regard, Grant Thornton's Tax experts shed further light on 25 financial measures for businesses and employees:
Measures for businesses
1. Will the payment of taxes be suspended?
Yes, the deadline for the payment of tax liabilities (including VAT liabilities) to tax authorities will be extended until 31/08/2020 for businesses, which have declared a primary business activity code (the so-called KAD) at 20/03/2020, which is considered as affected by the Ministry of Finance. The liabilities should have become due from 11/03/2020 until 30/04/2020. As a general precondition for the payment suspension of tax debts is the maintenance of the same number of employees.
2. Will the payment of social security contributions be suspended?
Yes, the deadline for payment of social security contributions which were due for the month February will be extended for 3 months, according to an announcement of the Ministry of Labor. Moreover, the same measure will apply for settled debts to social security authorities. As a general precondition for the payment suspension of the social security debts is the maintenance of the same number of employees.
3. Will the businesses be supported for the repayment of banking loans?
Businesses may claim for the repayment of loan capital to be extended until the end of September 2020, provided that they had repaid their duties until the end of December 2019. For the repayment extension period, businesses should repay any interest due.
An interest subsidy will be granted for a period of 3 months to business sectors which have mostly been impacted. In case the financial consequences of the pandemic last for a longer period, this measure may be extended in the future.
Employees, free lancers and personal enterprises which will receive the special state benefit of 800€, will be able to suspend the bank loan repayment for a period of 3 months.
4. Will the State grant subsidies or loans to the businesses?
The State will grant refundable deposits for an extended period of time for businesses which have been severely affected of a total amount of 1 billion Euro. The amount of the deposit given will be defined according to the businesses’ revenues decrease, personnel cost etc. As a general precondition again is the maintenance of the same number of employees.
5. Will the payment of commercial property lease be suspended?
Businesses whose activity has been suspended are exempt from paying 40% of the total rent for months March and April 2020. Any stamp duty or VAT due will be recalculated accordingly.
6. Will the payment of residence property lease be suspended?
As regards the lease agreements for primary residence, when the lessee is employee in a business, whose activity has been suspended and whose employment contract has also temporarily been suspended, then the employee is exempt from paying 40% of the total rent for months March and April 2020.
7. What are the measures in favor of the property lessors who will receive 60% of the rent?
The property owners who will receive the 60% of the rent will be granted with the benefit to extend the deadline for payment of taxes or settled tax liabilities for 4 months.
8. What about the debts of the State towards the taxpayers?
The Public Revenues Independent Authority will proceed to the immediate refund of amounts not exceeding 30.000€ from income tax pending cases to legal entities and VAT audit cases.
9. What are the tax measures as regards the consumption of products against the COVID-19 pandemic?
The VAT rate will be decreased from 24% to 6% for the following products: a) Medical masks and gloves; b) Sanitizer, antiseptic wipes and other similar products; c) Soap and other products used for the personal hygiene; d) Ethyl alcohol used for production of sanitizers. The VAT decrease will apply until the end of 2020.
10. Will the updated objective real property values apply for 2020?
The Unified Real Property Tax (the so-called ENFIA) will be calculated on the basis of the existing objective real property values. The updated objective real property values will be applied from the coming tax year.
11. Have the deadlines for filing tax returns been extended (for VAT, payroll withholding tax etc.)?
No, the deadlines for filing tax returns have not been extended.
Especially, the deadline for filing annual list of customers-suppliers for cross-checking purposes for the tax year 2019 is extended until 30.6.2020 and the deadline for amendments has been extended until 31.7.2020.
12. What other tax measures could take the government to enhance business liquidity?
- Decrease of tax advance payment for tax year 2020 due to the decrease of revenues.
- Extension of the period within which the businesses can offset tax losses (at the time businesses can carry-forward their losses for maximum 5 years).
- Deduction of 130% of expenses related to donations to the Ministry of Health for the fight against COVID-19 pandemic.
Measures for employees & freelancers
1. Should the employer pay the salary to employees in case that the activity of the business has been suspended by State decision?
Provided that the business activity has been suspended by a State decision, then the employer is not obliged to pay the salaries to the employees.
2. Can an employer whose business activity has been suspended dismiss an employee?
Any dismissal of an employee who is employed by an enterprise whose business activity was suspended is invalid. This measure applies as from 18/03/2020 onwards.
3. Can an enterprise which continues its business activity proceed to personnel’s dismissal?
Enterprises whose business activity has not been suspended by a State decision can dismiss its employees. However, these employers will not benefit from the provided extension of the deadline for payment of tax and social security liabilities or benefit from other financial supporting measures.
4. Can the employer suspend the employment contract of all or part of his personnel?
The employer has the right to suspend the employment contract if his business activity is among the activity codes (the so called KAD) defined as affected by the COVID-19 pandemic. The suspension can last for a month, except if the emergency conditions remain. The employer should keep the employees after suspension for a period equal to the suspension period.
7. Should the employer pay the salaries to his employees if he decides alone to shut down the business?
In case that business activity is suspended by a decision of the employer, the latter is obliged in any case to pay the salaries to the employees.
6. What kind of financial support is provided to employees whose employment contract has been suspended?
Employees, whose employment contract has been suspended, either by a State decision for the activity shutdown or by a decision of the employer whose activity is affected by the pandemic, are entitled to a special state benefit of 800 Euros for the period 15/03 – 30/4/2020. Social security contributions on the nominal amount of the salary for the aforementioned period is covered by the State. The special state benefit is exempted from tax, seizure and shall not be offset against any liability.
Employees, who were dismissed or resigned within the period 01/03 – 20/3/2020, are defined as beneficiaries of the financial support as well.
Further, employees of enterprises affected by the COVID-19 pandemic, will benefit from the extension of the deadline for payment of tax liabilities of March 2020.
7. What steps should employers follow so that employees are granted the special state benefit?
Enterprises should file electronically, though the ERGANI e-platform, a solemn declaration, whereby they declare that their operation has been temporarily suspended. The declaration shall obtain a protocol number, which should be notified by the enterprise to its employees.
8. What steps should employees follow in order to receive the special state benefit?
Employees should file electronically a solemn declaration, through a special e-platform of the Ministry of Labor, and provide their personal details, information about their employer and their bank account details.
9. Is the employer obliged to pay the Easter bonus?
The Easter bonus should be normally paid according to the law provisions. In order to facilitate enterprises affected by COVID-19 pandemic, the Easter bonus may be fully paid to employees in the summer along with the summer holiday bonus.
10. Does the special state benefit of 800€ also cover self-employed individuals and freelancers?
The special state benefit of 800€ will also be provided to self-employed individuals and freelancers, who are affected by COVID-19 pandemic.
11. Are there any other measures provided to enterprises which continue their activity?
A special parental leave is provided to working parents for their children staying at home as well as the possibility of remote working. Employees who continue working at the businesses’ premises, shall hold a movement certificate from their employer for transport purposes according to the recent transport restrictions.
Furthermore, employers may, on their own decision, continue their operations by adopting an alternative organizational plan, such as by operating their business with safe operation staff. Employers may also transfer personnel to other companies of the same group.
12. What measures have been taken in favor of the unemployed persons?
Unemployed persons, whose unemployment benefit will or has expired within the first quarter of the year 2020, will continue to receive their unemployment benefit until 31st March 2020.
13. What other tax measure could take the government to enhance employees’ liquidity?
- Decrease of tax advance payment for tax year 2020 for freelancers and personal enterprises due to the decrease of revenues.
- Decrease the 30% rate of expenditure on the total income through electronic means as a precondition in order not to be subject to further taxation.
* A part of the measures described above are based on formal announcements of the competent Ministry and do not reflect legislative measures.
* * Updated until 23/3/2020, 14.00
