NEW "SAFETY CAR PHASE" FOR COVID-19 INSTALLMENTS FOR DEFERRED TAX DEBTS

As already reported in our Tax News, previously deferred tax debts due to the COVID-19 pandemic can be paid off by installments payment models from June 30th 2021. A new feature is that for the first three months (July to September 2021) only minimal instalments of only 0.5% - 1% of the outstanding tax debts are required (so-called "safety car phase"). Applications for installment payments must be submitted between June 10th 2021 and June 30th 2021.

The regulation in detail

COVID-19-related deferred tax amounts can be repaid in installments over 2 phases:

• 1st phase: 15 months from July 1st 2021 to September 30th 2022
• 2nd phase: 21 months from October 1st 2022 to June 30th 2024

Applications for installment payment can be submitted for the 1st phase from June 10th 2021 and must be submitted no later than June 30th 2021. In an application, a specific installment payment plan with monthly installments must be proposed:

• In the first three months (July to September 2021), the monthly rate must be at least 1% of the outstanding tax debts on June 30th 2021. In the event of liquidity problems, the rates can even be lowered to 0.5%.
• All further installments should in principle be assessed in equal monthly instalments, whereby depending on individual needs, different rates can also be determined due to the liquidity situation in the company.
• It is important that in the course of the 1st phase at least 40% of the outstanding tax debts as of June 30th 2021 will be paid off.
• If the remaining up to 60% is to be paid off only in the 2nd  phase, a repayment of 100% of the tax debts is nevertheless to be shown in the instalment payment plan for the 1st phase. In this case, the 15th (last) instalment must also reflect the cumulative repatriation amount for the 2nd phase.
• For the 2nd  phase, a new application must be submitted by September 30th 2022 at the latest, in which a new instalment plan on the then still outstanding tax debts will subsequently be submitted (for this purpose, it is to be expected that further detailed information will be sent out by the BMF in the course of 2022).

Further details on the installment payment plans can be found on the Homepage of the Ministry of Finance homepage.

If you have any questions, please do not hesitate to contact your Deloitte consultants!