Tax obligations

 

Are there any transitional tax measures to mitigate the impact of COVID-19?

In the context of tax obligations, it is now possible to extend the period for fulfilling all debts to the tax authorities, accrued before and during the emergency period, which may be paid, with total exemption from default interest and other legal charges.

Such possibility depends on a request to be submitted up to 30 days after the emergency situation (i.e. 30 days from 16 May 2020) and covers taxpayers who, due to Covid-19, have suffered a 50% loss in their usual turnover on the thirty days preceding the request.

 

What does this derogation regime consist of? Are there any transitional tax measures to mitigate the impact of COVID-19?

Taxpayers who have suffered a loss of 50% on their usual turnover on the thirty days preceding the request , due to Covid-related reasonsmay benefit from a deferral of up to six months from the date of the last instalment for the completion of payments which are up to date in instalments, free of any legal charges.

 

And what about the ongoing tax execution proceedings?

Pledges and preventive seizures on the taxpayers who have suffered a loss of 50% on their usual turnover on the thirty days preceding the request, due to Covid-related reasons  are also suspended during and up to six months after the emergency situation.  Inspection visits are reduced to the strictly unavoidable.

 

Are there measures regarding the interaction between taxpayers and the Tax Administration (“TA”) due to the impact of COVID -19?

During the state of emergency, the tax offices and directorate of customs maintain face-to-face service, with reduced opening hours.

The opening hours are:

Tax Office – from 7.30 am to 1.00 pm.

Customs – from 7.30 am to 1.00 pm.

 

What are the solutions to mitigate or offset the financial costs and losses generated in my organization by COVID-19?

Derogatory and transitional measures to alleviate the economic impact of COVID-19 on companies have recently been approved, such as:

  • The deferral of the payment of tax and social security contributions, exempt from interest or other legal charges;
  • Suspension of pledges and preventive seizures by the Tax authorities;
  • Deferral of the payment of instalments to the bank or other creditors.

 In addition, a set of mechanisms was created to, in some way, mitigate companies’ costs with staff. 

 

Contributory

 

Is there a special regime for social security contributions?

To relieve the companies' cash flow, all social security debts accrued before and during the emergency period may be paid with total exemption from default interest and other legal charges.

The request for this purpose must be submitted within 30 days after the emergency situation, i.e. 30 days from 16 May 2020, which corresponds to the date of termination of the state of emergency enacted through PD 8/2020, of 4 May.  

Measures to suspend pledges or preventive seizures during the state of emergency and up to six months after the same have also been established.

 

Can all companies benefit from such regime?

No, companies registered under the general mandatory protection regime, which have a proven reduction of 50% of their turnover in comparison to the 30-day period preceding the request, can benefit from the exemption regime.  

Proof of the reduction in turnover of companies benefiting from this derogation regime is provided before the Supervision Commission, who is responsible for ensuring that the conditions are properly met.

 

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This information is being updated on a regular basis.

The information provided and the opinions expressed herein have been prepared with the help of VdA Legal Partners and are of a general nature. They are not in lieu of appropriate legal advice in connection with specific cases.