All SOS for the 24 installments at the Funds

By Dimitris Katsaganis

A countdown to the concretization of the new arrangement for debts to the Treasury has begun after the announcement by the Prime Minister himself, Mr. Kyriakos Mitsotakis, last week from the floor of the Parliament.

In detail, Mr. Mitsotakis stated that “in the coming weeks, those who owe EFKA will join the more favorable regime of more installments of the Ministry of Finance”.

This, according to his information Capital.gr by competent officials of the Funds, “translates” into the establishment of a new fixed arrangement of 24 installments instead of 12, as has been the case until now. This will equalize the installments of the fixed arrangement between the tax office and the Funds as the 24 installments at the tax office are valid from December 2019 The doubling of installments of the fixed settlement is estimated to be able to benefit close to 95,000 debtors, who, according to the KEAO data in the first quarter of 2022, were included in the 12 installments. And this is because, the same sources refer to Capital.gr, that the new regulation will provide for the possibility of switching from 12 to 24 installments. Doing so will reduce the amount of the monthly installment for each debtor included in the 12 installments.

Also, the direct beneficiaries will be those debtors who lost the arrangements in the first quarter of 2022, i.e. over 90,000, as the same sources estimate that they are entrepreneurs who can pay a certain amount for their debts to the Funds.

This does not mean that the remaining debtors are excluded, i.e. those who are not or were not recently included in arrangements.

On the contrary, the new permanent arrangement, like the existing one, will be open to all debtors and indeed without an integration deadline.

Executives of the Funds reported to Capital.gr that the planned regulation of 24 installments will move in the footsteps of the 12 installments in terms of its basic terms. So they will be as follows:

* Overdue debts to the former Social Security Institutions (eg IKA, OAEE) and e-EFKA (from January 1, 2017) except NAT can, upon request of the debtors and if there is a real inability to pay them, be regulated and paid in 24 equal monthly installments.

* Subject to the arrangement for debts of more than 5,000 euros is only possible if the interested parties prove that they can meet the amount of the monthly installment and if they provide the necessary information that proves the inability to pay their debts at the given time, including detailed information about the their income, their cash reserves, their real estate and all their debts. The application for inclusion in the regulation is rejected if the information provided is inaccurate or insufficient. The provided data, which must prove the viability of the arrangement, is determined by a decision of the Minister of Labour, Social Security and Welfare in accordance with the provisions of case 8 of this subparagraph, according to the following categorizations:

-For debts from 5,000 euros to 50,000 euros, the inability to repay the debt at the given time, as well as the viability of the settlement, is judged by the relevant social security institution.

-For debts over 50,000 euros, the debtor must additionally provide a certificate from an independent third party regarding the correctness of the financial data, as well as supporting documents proving the inability to repay the debt at the given time and the viability of the settlement, with costs that they weigh him down.

-For debts of more than 150,000 euros, the debtor is now obliged to provide guarantees or real collateral of equal value to the total debt. The value of the collateral will be determined by the third party appraiser. The independent appraisers are determined by a decision of the Minister of Labour, Social Security and Welfare in accordance with case 7 of this subsection. In any case, certified public accountants and those holding a license to practice law are recognized as independent third-party appraisers. The certification by the independent appraiser examines all the debtor’s obligations to the state and to third parties, the debtor’s overall financial situation including the provision of sufficient guarantees, and if the inability to pay the debt immediately is confirmed, the facility of partial payment is granted. Also examined are the effects on the expected liquidity of the debtor’s eventual inclusion in other arrangements with the State or with private entities. The collateral on the debtor’s available real estate must be secured. In case of sufficient cash reserves, the debt is not subject to regulation and becomes immediately demandable. A necessary condition for being subject to regulation is that the statutory insurance declarations for the last 5 years have been submitted.

Debts concerning debtors who have been convicted or prosecuted for tax evasion are excluded and not subject to the regulation.

* The payment of the first installment or the one-time payment of late contributions is made until the last working day of the day following the submission of the application for inclusion in the regulation of this month’s article for all Social Security Institutions, except IKA-ETAM and ETEAM. Especially for IKA-ETAM and t. ETEAM, the final date is defined as the last working day of the month in which the control procedures are processed. In the event that these are completed after the 20th day of each month, the above deadline is extended until the 5th day of the following month of processing the audit.

Subsequent installments are paid by the last working day of the following months, without requiring special notification of the debtor.

* During the arrangement and as long as its conditions are consistently observed:

– The debtors are given a monthly certificate of debt, in which the remaining amount of debt is also certified.

-The criminal prosecution against those responsible is suspended and the execution of the sentence imposed is postponed or if its execution has begun, it is stopped.

– The continuation of the enforcement process on movable or immovable property is suspended as long as the first installment has been paid. If the debtor loses the benefit of the arrangement, the suspended measures continue.

– The statute of limitations for debts is suspended. During the arrangement, the late payment of 1 installment is allowed and this payment must be made by the date of payment of the next installment with a late payment surcharge of 15%.

The late payment of a second installment during the settlement or the creation of a new tax or insurance debt, has the consequence for the entire debt:

-the loss of the benefits of the regulation,

– the status as due of the entire balance of the debt and previous surcharges,

– the pursuit of its collection with all the measures provided for by the applicable legislation,

– the forfeiture of guarantees.

The amount of the principal debt subject to this arrangement is charged with an annual interest rate equal to the refinancing rate of the European Central Bank at the time of submission of the application, increased by 800 basis points (i.e. 8%).