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Those with middle income, companies, the unemployed, temporary workers, but also debtors with red loans and those living in remote areas, benefit from the 6.8 billion euro package of measures that Prime Minister Kyriakos Mitsotakis announced yesterday during his speech at TIF.
In 2021 private salaried employees will see an increase in their net salary due to the abolition (for one year initially) of the solidarity contribution while, for the same reason, farmers and professionals will also pay less taxes in 2022. Retirees, civil servants and income is normally paid.
Unemployment benefits are also extended for two months depending on the month they ended and whether they have not been extended in the past. In businesses, the cost of insurance contributions is reduced, new hires are subsidized, while new government loans are made with two additional rounds of repayable advances.
At the same time, the auctions of first homes are frozen until the end of the year, while the suspensions of tax obligations and insurance for those affected by the coronavirus are extended until next April.
In particular, the analysis of the Prime Minister’s announcements shows the following:
1. The solidarity contribution for private sector employees, Self-employed workers and farmers, while the contribution will normally be paid by income earners (eg from rent or dividends), civil servants and retirees. The measure will be applied in principle for 2021 and its permanence will depend on the development of health crisis and the budget margins of the economy. A taxpayer with an annual income of 15,000 euros will benefit from 66 euros per year, another with an income of 20,000 euros per year will benefit from 176 euros per year. For an annual income of 30,000 euros, the benefit amounts to 676 euros and for an annual income of 40,000 euros it reaches 1,326 euros. Next year’s income will be reported.
2. They are reduced by three points from 39.7% to 36.7% insurance contributions. An employee with a salary of 1,016 euros will have an annual profit of 158 euros, while the company’s profit will reach 301 euros.
3. The creation of 100,000 is subsidized new jobs. The state will cover the contributions, employee and employer, for each new employee for 6 months, regardless of their salary and specialty. The benefit for hiring an unemployed person with a salary of 700 euros will be 2,821 euros per year for both parties. Or, respectively, about 4,000 euros for a salary of 1,200 euros. The only condition is that the jobs in the company are not reduced. If, indeed, he is hired on long-term unemployment, his position will be subsidized with another 200 euros per month.
4. It runs until the end of the year Collaboration program. This means that the salary of those forced to work part-time in the sectors affected by the pandemic will continue to be reimbursed, without losing insurance rights on their nominal salary. The possibility of temporarily suspending contracts in the catering, tourism, transport, sports and culture sectors is also expanded. And now they are joined by the guides and the artists.
5. The third cycle begins refundable advance of 1.5 billion. Those who have already received Refundable I and II can also participate if they have not exhausted their individual funding limit. Companies without employees and without a cash register now join the beneficiaries. However, it does not cover all the self-employed, exceptionally tourism and seasonal companies with a significant decrease in their turnover for the months of June, July and August are included in the measure. In November, a fourth repayable advance cycle of 600 million euros will be implemented.
6. It is adopted measure of excessive depreciation over 3 years (2021-2023) at a rate of 200% and for green and digital fixed capital investments These investments (for tax purposes) are over-amortized by 100% + 100% = 200%. That is, a company that proceeds to its digital modernization spending the amount of 50,000 euros will deduct the amount of 100,000 euros from its gross income. With a tax rate of 24% you will avoid the income tax of 24,000 euros. Thus, about 48% of the investment is subsidized by the state budget.
7. In October, retroactively worth 1,400 million euros for the main pensions (public and private sector) corresponding to the 11 months 2015-2016. How much is expected to be paid in a lump sum and after the corresponding tax has been withheld. In December, another 460 million euros will be credited to some 180,000 retirees who have left their jobs after 31 or more years of insurance and benefit from new replacement rates under the Vroutsis Law.
8. Permanently removed or ENFIA on 26 remote islands. The measure begins from 2020 (that is, the new rise that will occur in the coming days) and is estimated to affect critical municipalities such as Lipsi, Gavdos, Halki, Agathonisi, Tilos, Ag. Efstratiou, Anafi, Sikinos, Psarron , Megisti, Folegandros, Oinousses, Kimolos, Kastelorizo, etc.
9. It extends for 6 months or Reduced VAT transportation, coffee, soft drinks, cinemas and tourist services. In particular, it extends for 6 months:
• The VAT reduction on all personal transport from 24% to 13% valid until October 31, 2020. The VAT reduction to 13% from 24% covers train, metro and tram tickets, with and intercity buses, airline tickets, passenger ship tickets, combined transport by road, air and sea.
• The VAT reduction on coffee and other catering drinks from 24% to 13% valid until October 31, 2020.
• The application of VAT reduced from 13% to 90% of the cost of the tourist package compared to the 80% it had before.
• The reduction of VAT from 24% to 13% on movie tickets, a measure that is valid until the end of October.
10. Postponed until April payment of debts by the victims. In practice, this means that the tax and insurance suspensions that expired at the end of September and October are extended until next April.
11. Extension of two months for long-term unemployment and unemployment benefits, as well as the unemployment benefit for the self-employed, for the unemployed whose subsidy expired in June, July and August. Those who have already received the two-month extension of the first 5 months of the year are excluded, in the context of emergency government measures for immediate and effective support to the unemployed. In other words, those unemployed who have already received a two-month extension due to the expiration of unemployment benefit in the first five months of the year are not entitled to receive another two-month extension. For example, if someone who lost their unemployment benefit in April and got an extension in May and June, they won’t get another two-month extension. The number of stamps required to grant this aid is also reduced to 50 instead of 100.
12. Suspended until the end of 2020 first home auctions due to overdue debts of citizens. As of January 2021, debtors with debts with banks, the State, DEKO and individuals may request their inclusion in the new bankruptcy law, either by extrajudicial settlement of debts or by bankruptcy and cancellation of all debts. In the latter case, they will be able to stay at home paying the rent according to market conditions for 12 years where they will buy back the property or have to leave it.
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