In order to mitigate the negative economic consequences of the COVID-19 pandemic a new legislative package has been passed by the Austrian Parliament which includes an extension of the COVID-19 special payment facilities. The Second Act of COVID-19-Tax Measures (2. COVID-19-StMG) provides for an automatic extension until 30/6/2021 of all deferrals that were already granted until 31/3/2021. This extension also includes all tax payables that will be due on the tax account by 31/5/2021. Along with this, the COVID-19 installment plan payment model will begin three months later than previously scheduled.
The Labour and Social Insurance Act (ASVG) also provides for an installment plan payment model for social security contribution liabilities with the Austrian Health Insurance (ÖGK). This measure will now also enter into effect three months later than previously scheduled.
The Social Insurance for Self-Employed (SVS) offers individual installment plan arrangements regarding social security contributions of the self-employed until 30/6/2023.
Before the passage of the Second Act of COVID-19-Tax Measures all taxes that were booked or were due on the tax account between 1/10/2020 and 28/2/2021 were deferred until 31/3/2021. This deadline will be extended automatically to 30/6/2021 with no additional application being required. Any tax payable falling due by 31/5/2021 will also automatically be deferred until 30/6/2021 (no additional application required).
In this respect, tax authorities are supposed to grant deferral requests submitted by the latest 31/5/2021 mandatorily (no discretion).
In addition, interest on tax deferrals and late payment surcharges shall not be imposed until 30/6/2021. From 1/7/2021 to 30/6/2024 the interest rate on tax deferrals will be 2 % above the applicable base rate, currently 1.38 % per year.
In addition to the special tax deferrals facilities there is also an installment plan payment model for COVID-19 related tax liabilities. It allows paying off taxes due between 15/3/2020 and 31/3/2021 in two phases over a maximum period of 36 months lasting at least up to 31/3/2024.
Due to the extension of the tax deferrals up to 30/6/2021, the installment plan payment concept under the 2. COVID-19-StMG will begin three months later than scheduled. This means that the COVID-19 installment payment model can be applied to taxes that were due between 15/3/2020 and 30/6/2021 (previously 31/3/2021) and the new deadline of the installment plan payment model ends on 30/6/2024 (previously 31/3/2024).
The request for the first phase or the switch from an existing installment plan payment concept to the first phase of the new installment payment concept has to be filed between 10/6/2021 and 30/6/2021 (previously between 4/3/2020 and 31/3/2021). The installment plan payment period of the first phase (15 months) begins on 1/7/2021 and ends on 30/9/2022 (previously 30/6/2022).
In the second phase, a request for payment of installments is allowed in respect of those tax liabilities for which the installment payment has already been granted in the first phase and could not be settled entirely, but at least to the extent of 40 %. For the second phase a new application is necessary which has to be filed by 31/8/2022 (previously 31/5/2022). As a result, the remaining COVID-19 related tax liabilities can be paid in additional 21 monthly installments, 30/6/2024 being the last one (previously 31/3/2024).
During the installment payment period a new request can be made once at each phase to readjust the installment payments. For those taxes paid in installments under this model, the interest rate will be 2 % above the applicable base rate, currently 1.38 % per year.
A simultaneous payment arrangement in accordance with the provisions of the Federal Tax Code (BAO) is prohibited which means that during the installment payment period all current taxes (eg VAT, payroll taxes) must be paid on time (with the exception of corporation and income tax advance payments).
As an alternative to the COVID-19 installment payment model general deferrals or other installment payment arrangements in accordance with para 212 of the Federal Tax Code (BAO) can be requested.
The ASVG also provides an installment plan payment model over two phases for social security contributions liabilities at ÖGK. For already deferred social security contributions regarding the periods February 2020 to December 2020 the legal payment term has been extended until 30/6/2021 (previously 31/3/2021). However, existing agreements with the ÖGK can be maintained and existing installment plans can continue as before.
For COVID-19 related liabilities, a request for an installment plan can be filed, if it is foreseeable that due to the COVID-19 pandemic the legal payment term by 30/6/2021 (previously 31/3/2021) cannot be met. In the first phase, the liabilities regarding the periods February 2020 to May 2021 (previously February 2021) shall be settled or reduced. The payment deadline in the first phase ends on 30/9/2022 at the latest (previously 30/6/2022). However, social security contributions regarding the periods from June 2021 (previously March 2021) have to be paid within the general legal payment deadline and cannot be included in the installment plan payment model (not even in the second phase).
If – despite intensive effort – businesses cannot settle all their liabilities regarding social security contributions from periods February 2020 to May 2021 until 30/9/2022 (previously 30/6/2022), the ÖGK in a second phase can extend the payment arrangement under strict requirements for an additional 21 months until 30/6/2024 (previously 31/3/2024). In order to enter into this second phase it is mandatory that at least 40 % of the COVID-19 related contribution liabilities have been settled within the first phase, no payment deadline has been missed and it can be credibly shown that in addition to the current social security contributions, the remaining installments can be paid on time. For the second phase, it is required to file a request by 30/9/2022 (previously 30/6/2022).
The SVS offers individual deferrals and installment payment arrangements. This requires an individual agreement with the SVS. Current contributions can also be included in the agreement. In this regard, the SVS has informed that the payment reminder sent at the end of February 2021 is to be regarded as a “friendly reminder” which should encourage the entrepreneurs to request an installment payment arrangement with the SVS with payment terms being offered up to 30/6/2023. The first installment payment (in the case of half-yearly installments) is currently due by June 2021. Interest rates may be adjusted individually and can be reduced from the statutory 3.38 % to 0 % upon request if the payment of the full interest rate would negatively impact the economic situation of the company.
At the same time, a request to reduce the contribution base can be filed as well.
It should be noted that SVS-contributions directly influence the retirement date and the pension amount. This means that if no payments are made, no insurance periods are acquired.
According to the 2. COVID-19-StMG the deadline for all granted tax deferrals will be extended automatically until 30/6/2021, with no additional request being required. This also includes all tax payments falling due by 31/5/2021. Irrespective of this, tax authorities must grant deferral requests filed by the latest 31/5/2021.
For all periods after 30/6/2021 it is possible to request an installment payment plan over two phases for 36 months until 30/6/2024 for all COVID-19 related tax liabilities due between 15/3/2020 and 30/6/2021. The installment payment period of the first phase ends on 30/9/2022. If – despite intensive effort – businesses cannot settle all their COVID-19 related tax liabilities until 30/9/2022 they can extend their installment payment arrangement for an additional 21 months until 30/6/2024.
There is also a similar installment payment plan for COVID-19 related social security contribution liabilities which consists of two phases and has a term up to 30/6/2024. Herein only those contributions which refer to the periods February 2020 to May 2021 and could not be fully paid until 30/6/2021 are included. For contribution periods after June 2021 the statutory due dates and payment periods will be applicable.
The SVS offers a different installment payment model which provides for a term until 30/6/2023. In addition, the contribution bases can be reduced on request.
Edith Capek ist Steuerberaterin bei Deloitte Wien. Ihre Tätigkeitsschwerpunkte liegen im Verfahrens- und Finanzstrafrecht, Konzernsteuerrecht sowie europäischem Steuerrecht. Sie ist zudem als Fachautorin und Fachvortragende tätig.
Philip Predota ist Berufsanwärter in der Steuerberatung bei Deloitte Wien. Seine Tätigkeitsschwerpunkte liegen im Abgabenverfahrensrecht, Rechtsmittelverfahren und Finanzstrafrecht.