ECONOMY

Extra €2.5 bln up to year-end

extra-e2-5-bln-up-to-year-end

The government is supporting employment and businesses with a fresh 1.5 billion euros for November and €2.5 billion in total by the end of the year, restoring the quarantine’s measures for companies and workers hurt by the lockdown, including enterprises forced to shut down by state order.

Nevertheless, the suspension of tax obligations will only apply to the companies that shut down upon government order.

Out of this month’s €1.5 billion, some €900 million will concern the fourth phase of cheap state loans (the Deposit To Be Returned), against an original budget of €600 million, and the rest will have to do with tax obligations suspension and special-purpose compensation to workers on furlough.

According to the new procedure, 50% of the new state loans will not have to be returned. This applies to all personal enterprises, with or without workers, provided they have a minimum monthly turnover of €300 and have seen a revenue drop of at least 20% year-on-year. However, companies shut by state order up to November 10 that have a turnover of at least €300 a month will be eligible even without a 20% reduction in revenues.

The same terms will apply to the fifth phase of state loans. This will amount to €700 million and begin in January 2021. Sources say the measure will continue well into next year, with a sixth phase of the Deposit To Be Returned.

Enterprises that shut down by government decree can have their November value-added tax payment suspended until April 30, 2021. This debt may be repaid in 12 tranches without interest or in 24 installments with an interest rate of 2.5%, starting from May 2021.

Those enterprises may also suspend the payment of their tranches toward arranged dues to the tax authorities and the social security funds for November. Those tranches will then be carried over until after the original conclusion of the payment plan. The same option is also granted to workers whose contracts have been suspended, regarding any tax repayment tranches due this month.