- With the provisions of article 13 of Law 4646/2019 added to Article 23 of Law. 4172/2013 (KFE) new case n’, according to which rent expenses are not deducted from the gross income of businesses, as long as their payment has not been made using an electronic means of payment or through a payment service provider.
More specifically, with the provisions in question, rent expenses are recognized as a deduction only in the event that they are paid using electronic means of payment or through a payment service provider.
- “Electronic means of payment” means any means of payment, within the meaning of c. n’ and n’ of article 62 of Law 4446/2016, which requires the mediation of a telecommunications or electronic network, such as e.g. the transfer of money through special online applications (“e-banking”), cards, the “electronic wallet”, etc., while the concept of “payment service provider” is defined by the provisions of paragraph 11 of article 4 of the . 4537/2018 (A’ 84). Payment service providers include, among others, credit institutions, postal check offices and payment institutions as defined in c. 4 of article 4 of n. 4537/2018.
style=”text-align: justify;”>- The deposit into the lessor’s bank account, even if there are several co-beneficiaries, either in cash or by transfer between accounts (transfer), the use of postal check – express payment or the deposit in a payment account of the Hellenic Post,
– the use of a bank check,
– the issuance of a check to the order of the lessor
– the use of bills of exchange which are paid through a bank
- In the event that part of the rental expense is not paid with one of the means of payment listed above, the entire expense is not recognized as a deduction.
- It is noted that in the event that the contracting parties beyond the lease relationship (lessee-lessor) are simultaneously suppliers and customers, they are allowed to carry out accounting offsets on both sides, as long as this does not contradict the provisions of other laws and in the event that a difference remains after the offset (remaining rent to be paid), it is required to be paid by electronic means of payment regardless of its amount in order for this amount to be deducted from the gross income.
- Furthermore, in the case of payment by a third party (resident or foreigner, who, on the order of the lessee, deposits the relevant amount to offset the balance of his own obligation to the lessee) by depositing into the lessor’s bank account, the relevant expense is deducted from the lessor’s gross income, as long as it is proven based on the appropriate data (e.g. bank statements or other documents) the repayment of the lessor as well as the reason for repayment of the expenses by the third party. Corresponding to the above case, when there is a difference (remaining rent to be paid) after offsetting the lessee’s claim (against the third party) with his debt to the lessor, then in order to recognize the total expense it is required to pay it electronically means of payment.
- These provisions are applied, in accordance with the provisions of paragraph 11 of article 66 of the law. 4646/2019, for expenses incurred in tax years starting from 1.1.2020 onwards. Any advance rents related to the tax year 2020 which were paid until 12-12-2019 (date of publication of Law 4646/2019), are recognized as a deduction regardless of the method of their payment. On the contrary, advances paid after 12-12-2019 and related to rent expenses from 1-1-2020 are covered by the new provision. For example, a limited liability company which in the tax year 1.1.2019 – 31.12.2019 paid the rent for January 2020 in advance on December 5, 2019, will deduct the expense in question in the tax year 2020, regardless of how it was paid.
- It is noted that expenses incurred within a tax year but not paid in the year this, they are definitively judged, in terms of their deductibility, in the tax year in which their repayment will take place. In the event that in the year of payment of the expenses it is established that these expenses were paid without using an electronic means of payment or the mediation of a payment service provider (e.g. with cash), the company is obliged to submit an amending statement of the tax year to which the expense relates, adding the amounts of these expenses as a positive accounting difference.
See here and related article by Lawyer Vasiliki Paradia
