POMIDA is particularly troubled by the fact that in recent days cases have been increasing throughout the country, as a result of which new restrictive measures have been taken in catering businesses, which paves the way for business organizations focus to request a new extension of the forced rent reduction. That is why we have proposed together with the Athens Chamber of Commerce, and we are pushing every day, for the forced reductions to end once and for all and for a 30% refund to be legislated for those owners who agree to make voluntary reductions up to -40% and until 31.12.2020, so that from 1.1.2021, when we hope that the situation will have improved, the normal rents will apply.
“Free Press”: Set-offs with “lost” rents begin!
According to newspaper “Eleftheros Typos”, with one or more of the 8 monthly installments of the personal income tax for the tax year 2020, which have payment deadlines on the last working days of the months of the period August 2020 – February 2021, or even with the monthly installments of this year’s ENFIA, which have payment deadlines on the last days of the months of the period September 2020 – February 2021, will be offset soon the tax deductions entitled to hundreds of thousands of rental property owners who are obliged by the State to collect rents reduced by 40% this year.
The newspaper presented detailed tables of examples from which the amounts of rent cuts, the amounts of tax credits and the amounts of final income losses for thousands of owners. In detail:
According to the provisions of the government’s emergency regulations for economic measures to support households and businesses affected by the coronavirus, property owners who are obliged to accept a 40% cut in the rents received are entitled to a discount, from tax debts with a final payment date from 31-7-2020 onwards (i.e. from income tax or ENFIA of current year), a rate of 20% calculated on the part of the rents which they finally collect, after the forced reduction by 40%. That is, they are entitled to a tax deduction equal to 20% of 60% of the rent.
This deduction corresponds to 30% of the lost 40%. B.C. on a monthly rent of 100 euros, which is “cut” by 40 euros, the discount is calculated at 20% of the 60 euros received and is set at 12 euros, an amount which is equivalent to 30% of the remaining 40 euros, which is the income loss.
Essentially, that is, each owner will get back in the form of a deduction from this year’s income tax or this year’s ENFIA a percentage equal to 30% of the total loss of income this year which is caused by the forced reduction of rents by 40 %.
For the exact calculation of the amount of tax deduction entitled to each owner who was forced to accept a 40% reduction in the rents received for the months of 2020, a special application was created in the TACHISnet system, in which each eligible owner submits electronically, for each month of collection of reduced rents, an extraordinary declaration from which the loss of income from rents is derived. rents. In essence, as we have already mentioned, the amount of the discount is equivalent to 30% of the income loss due to a 40% cut in rents received. Thus, if the total amount of the proven income loss is e.g. 1,800 euros, then the amount of the tax deduction is determined at 540 euros.
It is noted that, in accordance with what the current legislation provides for financial support measures for households and businesses affected by the coronavirus, the forced reductions in rents by 40% were not limited only to the months of March, April and May, but also continue during the summer, for thousands of cases of professional leases, leases of main residence and student accommodation.
In particular:
– The provision of the right to pay rent reduced by 40%, it continued in the month of June, for those businesses that remained closed this month as well, as well as for businesses that belong to the sectors of tourism, catering, transport, culture and sports.
– The same the right was also granted to those businesses that opened in May, including retail trade.
– Businesses belonging to the sectors of tourism, transport, culture and sports were additionally given the right to pay rent reduced by 40% in the months July and August.
– The right to pay a 40% reduced rent for their first residence and the student residence of their dependent members is also retained by all employees whose employment contracts are under temporary suspension.
Regarding the owners of rental properties who are forced to accept the collection of rents reduced by 40%, the current legislation further provides that:
1) The 40% of rents not collected this year by the owners is considered to be automatically exempt from income tax and the special solidarity levy. The exempt amount also includes what they will get back in the form of a tax deduction. This exemption will be applied in 2021 when submitting the 2020 income statements.
2) The deadlines for the payment of confirmed debts and installments of installment arrangements to the Tax Administration have been extended and the collection of arrears has been suspended for those owners who rent out their properties to persons who are exempt from the obligation to pay 40% of the rents. In particular, for those owners who legally received a 40% rent reduction during the months of March and April and the final dates for payment of their debts and installments were within these months, the deadlines were extended until 31-8-2020 and accordingly suspended until 31-8-2020 the collection of their overdue debts. For the persons who suffered rent reductions in May, the extension for debts with a final payment date within May and the suspension of the payment of overdue debts are valid until 30-9-2020.
In addition, for those who suffered rent reductions in June, 10-30-2020 was set as the final payment date for debts that are normally payable within that month. Correspondingly, for those owners who were obliged to collect rents reduced by 40% in the months of July and August, the deadlines for paying tax debts that normally expired in those months were extended by 4 months and now expire on 30-11-2020 for the debts of July and on 31 -12-2020 for the debts of August 2020.
For the four-month intervals of extensions and suspensions, interest and late payment surcharges are not calculated.
3) 25% of the confirmed and payable within the months of May and June of the owners’ debts to the Tax Administration, which were paid in the period from 11-3-2020 to the end of June, is set off against other confirmed debts or installments of arrangements of these owners to the Tax Administration, which become due from 31-7- 2020 onwards (e.g. with income tax debts, with monthly debt settlement installments, with future ENFIA debts, etc.). For owners who have lease contracts for their main residence, in which the tenant is an employee of a company whose employment contract has been temporarily suspended due to the measures to avoid the spread of the coronavirus, this benefit is also provided for debts already paid on time within the months of March and April 2020.
Also, with regard to the owners with real estate lease contracts to cover the housing needs of children who are dependent members of the families of workers with suspended work contracts and who are studying in higher education institutions outside their place of permanent residence, the benefit in question is also provided for debts paid on time within the month of April 2020.
In the case of partial payment arrangements, the percentage of 25% is calculated on the amount of the installment, while the installments of partial payment arrangements based on a court decision or temporary order are excluded. Finally, no set-off is provided for VAT debts and withholding taxes that are not subject to installment payment arrangements.
SOURCE: Free Press
