State support may recover: some may have to pay more than benefits received

Support for microenterprises is taxed at 15%.

The state provides a subsidy to small businesses with up to 9 employees, i. and. 50 percent personal income tax (PIT) paid last year. If the GPM reaches up to 1 thousand. A minimum grant of 500 euros is awarded if the PIT amounts to 1 thousand euros or more. up to 2 thousand. 1 thousand euros. the amount of the subsidy, and if the GPM reaches more than 2,000. The grant amount is half the amount of the applicant in 2019. GPM paid.

This amount will generally be subject to income tax. Rasa Virvilienė, Director of the Legal Department of the State Tax Inspectorate (STI), commented to Delfi that the subsidies received by micro-companies, in accordance with the general provisions of subsidy accounting, are considered subsidies to compensate for the loss of income.

‘This means that, for the purposes of calculating corporation tax, these funds received by micro-enterprises are classified as taxable income in accordance with the provisions of the PMI and may be subject to corporation tax. In this case, income tax must be declared and paid in the usual way, before June 15 of the next tax period, “he said.

Auditor, tax consultant Artūras Kapitanovas recalls that the standard is 15 percent. the tax rate is also 5%, if the company’s income does not exceed 300 thousand. EUR.

State support may increase: you will have to pay more

It turns out that by receiving state support, some companies may face the opposite effect: they will have to pay more taxes than they received support.

“The subsidy for the population can increase aside if the company’s income does not reach 300 thousand per year. Eur, then 5 percent is applied. (Income tax rate – Delphi) When you receive a subsidy, the income can exceed 300 thousand. Eur, then you will have to pay 15% ”, the auditor gives an example.

There is another case where some companies may have to pay more than support. If the subsidy received by companies involved in mixed VAT activities will be included in the exempt VAT amounts, then on October 1, 2021, such companies can pay significantly more to the state than the subsidy received by filing an annual VAT return.

“If the subsidy received by microenterprises is included as non-taxable income, and that company, for example, bought real estate with VAT, a large amount of VAT will have to be reimbursed.” Therefore, some companies may return more to the state than they received subsidies ”, explains A. Kapitanov.

Business leaders may be surprised: downtime support is not “bare”

At that time, the employee downtime allowance is not directly taxable.

“The grant is intended to offset part of the remuneration paid during downtime, is included in the grant for corporate tax purposes and is subject to the general accounting rules for grants. In other words, this amount of funds received is not included in income because it reduces the costs incurred by the company, that is, and. salary. In this case, you do not have to pay income tax, ”explains the STI representative.

Although the subsidies received by companies for downtime are not directly taxable, according to A. Kapitanov, they do have an impact on the calculation of income tax.

“For example, if a person’s salary is 1,000 euros and the state reimburses 700 euros, then the company can only classify 300 euros as allowed accounting,” says the tax advisor.

The interviewee notes that this is not new to accountants, but company executives, who may be less involved in accounting, may be surprised.

“There will be no questions for accountants here, but for those who are less concerned with accounting so as not to imagine something like receiving a downtime allowance, and it’s ‘bare’: donated money. They automatically have an impact on the calculation of the income tax, “says A. Kapitanov.

Self-employed workers received 257 euros, and back – 95 euros

The ITS points out that the support of 257 euros received by the independent workers of the Employment Service is not subject to taxes. The auditor notes that the state provides 257 euros tax-free, but the obligation to pay taxes to Sodra remains.

“They were not exempt from having to pay 42.37 euros of compulsory health insurance. Those who have business licenses despite not receiving any income are obliged to pay the state social security contributions of the minimum wage. The calculation depends on whether the person It has had a business license throughout the month, or it has not had any, or if it participates in the second pension pillar, of which the amount may vary slightly, “he points out.

Therefore, if a self-employed person participates in the second pillar of pensions, they will have to pay € 52.93 to € 71.14 of state social security contributions for a full month. After adding PSD contributions (€ 42.37), out of state support of € 257, only € 161.7 remains.

Ministry of Finance: additional support for state support is not considered

According to the Ministry of Finance, the subsidies themselves are already state support, therefore the application of additional support to state support is not considered.

‘Subsidies, for tax purposes, are treated for accounting purposes and are recognized as income or deducted from expenses, but the result, i. and. profit or loss obtained by it.

However, we would like to point out that attributing the subsidy to income or reducing costs does not mean that the amount of the subsidy is taxable. Taxable operating result. Therefore, the income tax on the received subsidies could only arise if the subsidy was not used in the same year and only on the unused part. Or, in other words, if the company obtained a benefit from the subsidy, that is, and. the costs would be lower than the subsidy received ”, comments the Ministry of Finance.

According to the Ministry of Economy and Innovation, on Thursday 70.1 million euros had already been paid to the so-called micro-companies. 70.6 million euros were allocated. euros In total, more than 21.1 thousand. Applications.