At the end of the quarantine, the tax exemption ended: what taxes do they return

The quarantine regime that lasted exactly three months due to the coronavirus pandemic in Lithuania was lifted on Wednesday, and the state-level emergency declared in late February remained in place. However, it is not yet clear how long it will last.

According to data from the State Tax Inspection (ITS), before June 12. 21 thousand Entrepreneurs who have experienced the negative effects of COVID-19 have benefited from the fiscal aid measures and have already reserved around 392 million euros for later. 321 million euros in taxes to pay. The delays occurred after March 16, and most of it comes from the € 245 million value added tax (VAT). euros

Irina Gavrilova, director of the Department of Arrears Administration of STI, points out that 492 businessmen have already concluded tax loan agreements with STI and 26.2 million. will pay the tax in installments, without any interest.

Assistance measures for the population.

Non-self-employed and financially disadvantaged residents who declared their income before July 1. You will not be able to pay taxes for 2019, until the end of the emergency and for another two months, the ITS will not calculate the interest on arrears and will not take recovery measures.

Aid measures for companies.

According to her, the ITS tax aid measures for companies affected by the pandemic are valid until the end of the emergency and for another two months, so nothing has changed since the end of the quarantine.

The interlocutor recalls that the STI has published a list of taxpayers affected by COVID-19, taking into account the restrictions and prohibitions established to carry out activities due to COVID-19. Taxpayers who are on this list and for whom as of March 16. Until the end of the emergency and for two months thereafter, taxes due will be automatically removed without request and your taxes will not be recovered.

“After the end of the emergency, but not quarantine, these companies will have two months to pay taxes or enter into an interest-free tax loan agreement. During this two-month period for situation self-assessment and action planning , publicly traded companies will also not be recovered from recently declared taxes, and no interest will be charged, “explains I. Gavrilova.

The same deadlines apply to those companies that are included in the list of victims of COVID-19 according to the list provided.

Self-help aid measures

ITS tax assistance measures for self-employed residents whose activities have been affected by a pandemic are valid until the end of the emergency situation and for another 2 months.

The ITS, taking into account the restrictions established in the performance of individual activities due to COVID-19, has compiled a list of economic activities: the ITS assistance measures applied to the population that performs them or has carried them out before the announcement of quarantines are similar to those of pandemic companies.

This means that if from March 16. until the end of the emergency situation and for an additional two months after that, the taxes to be paid will appear, the self-employed population will be exempt from late payment interest and no new tax recovery actions will be initiated.

The list of individual activities that have been negatively affected by COVID-19 with a certificate and the acquisition of a business license can be found on the STI website.

However, the ITS notes that the provisions for self-employed workers whose activities have not been prohibited and who are not on the list of victims of COVID-19 activities are slightly different. The latter must declare income from individual activities and pay GPM before July 1.

“People who have not been banned, but who have experienced temporary difficulties with COVID-19, should apply to the STI for tax relief measures and request aid measures,” said an STI representative.

Sodra’s contributions return immediately after quarantine

Sodra cooperates with the STI in the application of tax relief measures to companies: it does not calculate corporate debts and does not impose sanctions on companies that are included in the list of companies affected by STI COVID-19. Other companies could also submit a request to the STI at a single window for the non-application of sanctions, and such requests reached Sodra at the same time.

Sodra has already reserved 8 million. payment of contributions from 700 companies. In addition, through the ITS it has received almost 12 thousand. The companies’ requests for sanctions and their responsibilities are estimated at 160 million euros. Euros There are also no sanctions against publicly listed companies.

After the end of the quarantine, Sodra awaits requests from companies affected by COVID-19 to defer payment of unpaid premiums during the quarantine period. This can be done in the next two months and the deadline can be up to 5 years.

However, according to Sodra, this does not mean that all these companies want to defer payment of contributions. If the policyholder does not want to defer the debts, he must pay the premiums for the quarantine period within two months, before August 17.

“In two months, that is, until August 17, we are waiting for the insured’s requests to defer premiums and we are ready to make decisions in a simplified way. This means that the companies affected by COVID-19 will not have to justify your creditworthiness and no interest will be charged.

We urge companies not to delay filing applications before the deadline; however, we anticipate that we will have to make thousands of decisions on deferring contribution debts in a relatively short period of time, “says Ježy Miskis, Deputy Director of Sodra, in a press release.

According to Sodra, late submission of the application may lead to deferment of payments, but under normal conditions, proof of solvency is required and interest is charged.

However, not all companies will be able to benefit from this measure after the end of quarantine. Businesses that are not considered affected by COVID-19, i. and. It is not included in the ITS COVID-19 victim list, but may have had difficulties, the two-month deadline and simplified deferral conditions will not apply. These companies were unable to pay their fees during the quarantine, and Sodra did not impose any sanctions. However, contributions currently unpaid for the previous period must be paid immediately, otherwise Sodra may apply penalties.

Who is covered by the simplified procedure?

Under the simplified procedure, payment of unpaid premiums during the quarantine period can be postponed by experienced policy holders of COVID-19 who have been included in policy holders publicly announced by the STI subject to a waiver of COVID-19 taxes without a request from the beginning of quarantine.

It can also be used for individual activities carried out on the basis of an individual activity certificate or for lists of business licenses for which prohibitions / restrictions have been established. In addition, those whose requests for fiscal aid measures for COVID-19 have been approved by the STI.

However, the possibility of deferring the debt under the simplified procedure is not available for those policyholders whose debt collection has already been delivered to a bailiff before the start of quarantine or for those who have filed for bankruptcy before the announcement of quarantine. Furthermore, the simplified procedure does not apply to policyholders who have not been adversely affected during quarantine.

According to Sodra, companies must meet their obligations within 5 years at the latest, and can choose both the deferment period, during which deferred contributions are not paid at all, and the period of dividing contributions.

It is important to note that if Sodra makes the decision to defer payment of debts, the policyholder must pay current social security contributions in a timely and disciplined manner. Failure to pay current social security contributions on time will result in the decision being overturned and the debt recovered.

“Vacation” loan – until July 1.

Delfi recalls that the financial and credit institutions belonging to the Lithuanian Association of Banks (LBA) have signed moratoriums to alleviate the situation of clients facing difficulties due to COVID-19, pledging to allow all private clients to defer payments mortgage for up to one year and lease and consumer credit: up to half a year and up to 6 months to defer payments on business loans. The moratorium applies to commercial loans amounting to up to 5 million euros per group of companies. euros

According to the moratoriums signed by the country’s financial and credit institutions, until July 1 of this year, residents and companies may take more loan time than provided by law.

“Clients who do not comply with the conditions of the moratorium and clients who wish to defer the loan payments after July 1, can apply for a license without reviewing the contracts and changing the interest rates in the conditions established by law and in accordance with the procedure established by credit institutions. It is also possible to request a credit institution to postpone the repayment under conditions or terms different from those specified. In this case, the situation will be examined individually, “comments the LBA.

The LBA notes that many of the country’s banks are offering more opportunities for the public and businesses that have experienced financial difficulties due to the coronavirus than those provided by law.

Since the beginning of the quarantine, credit institutions have deferred business loans totaling $ 1 billion. more than 200 million euros for the population. mortgage repayment worth euros.

Dozens of non-associative market participants joined the moratorium on loan deferrals initiated by LBA members.

According to the LBA, the greatest interest in the possibility of postponing the repayment of the loans was received in March and April. Currently, requests for deferrals are constantly decreasing, while the number of new loan applications is growing.

“However, taking into account the situation and possible future challenges, the Lithuanian Banking Association and other organizations that unite credit institutions, through their representative of the European Banking Federation, submitted an application to the European Banking Authority to evaluate the possibility of extending the moratorium on COVID-19, “said the LBA.

Principle of operation of loan moratoriums.

According to the moratoriums initiated by the LBA and its members, the deferment of the loan does not apply automatically, so it is necessary to request it at your bank.

All natural persons who have paid their contributions adequately before the start of quarantine, but who have experienced financial difficulties due to the coronavirus situation, have lost their job or part of their income, may be deferred for up to 12 months.

For consumer credit and leasing, credit institutions apply a deferment of up to six months during the moratorium period. During this period, the client will only have to pay interest or other periodic payments.

For companies with financial obligations, loan payments can be deferred for up to 6 months on request. The moratorium applies to commercial loans of up to 5 million per group of companies. Euros These loans represent around 95 percent. The number of all commercial credit agreements.

Individual decisions are made only for those clients who are already in 2020. March 16 had significant and long-standing financial problems, delays or insolvency.