The official restrictions for combating the corona virus (CoV) will lead to liquidity constraints for many entrepreneurs. These constraints can be alleviated by deferring taxes and social security contributions upon request. The Federal Ministry of Finance and the social insurance agencies have already published alleviations for the deferral and reduction of charges and contributions. However, entrepreneurs must take action and file an application for a deferral proactively. Your Deloitte advisors will be glad to assist you in this matter. In addition, Deloitte has set up its own team of experts for questions regarding payment deferrals, which is available for urgent questions at any time by telephone or e-mail. Below you can learn more about the relevant background, current measures and upcoming legislation.
Deferral of Tax Prepayments.
The Ministry of Finance published information stating that the tax authorities shall allow – upon request of the taxpayer – the deferral or reduction of tax prepayments as quickly and efficiently as possible in the event of liquidity constraints due to the Covid-19 pandemic are explained credibly. The Ministry has published text modules for the correct application of the credibility statement. Moreover, the tax authorities are instructed to handle with such applications immediately. In addition to a deferral or reduction, also installment can be applied for. Upon request, interest on such payment deferrals shall not be levied. Details concerning the information provided by the Ministry of Finance are available under the following link.
Despite these simplifications, it is in any case necessary that tax returns – such as the monthly/quarterly VAT returns – are submitted in due time (15th of the second following month) and furthermore that the full amount tax debt is reported to tax authorities. However, instead of full payment, an application for deferral can be submitted at due date and, if necessary, only a partial amount can be paid (Section 212 Austrian Federal Fiscal Code). In principle, this is also possible in the case of payroll taxes or advance payments of income tax or corporate income tax. In the case of advance payments of income/corporate income tax, it is feasible to apply for a reduction of advance payments, even if they have already been prescribed in a tax notification. A (partial) non-payment of taxes without corresponding applications can lead to unpleasant consequences: In addition to late payment surcharges (2% of the tax amount) also consequences under criminal financial law may arise. However, late payment surcharges can be reduced or erased upon application.
Deferral of Social Security Contributions.
Furthermore, it is possible to defer social security contributions. As such a written request for deferral of contributions can be submitted to the Austrian Health Insurance Agency (Österreichische Gesundheitskasse, ÖGK). The ÖGK has published up-to-date information on its website, which suggests that the ÖGK is prepared to make concessions due to CoV (deferral of up to 3 months, instalments over 18 months). For details, please see the ÖGK website.
The Social Insurance Institution of the Self-Employed (Sozialversicherungsanstald der Selbständigen, SVS) has also stated that deferrals and instalment payments for insurance contributions on request will be processed quickly and efficiently. In addition, advance contribution payments may also be reduced. Corresponding applications can be made per e-mail or by using the appropriate forms (also online). Details can be found on the website of SVS.
If social security contributions are not being paid in due time, interest on overdue payments may be charged. In addition, the withholding of social security contributions from employees and the non-payment to insurance agencies is punishable (Section 153c Austrian Criminal Code). Thus, it is strongly recommended to apply for payment relief in case of liquidity constraints.
In the event of imminent liquidity constraints due to the CoV pandemic, the Ministry of Finance and the social insurance agencies have announced that they will handle deferrals, instalment payments or reductions in advance tax payments and social insurance contributions quickly and efficiently. In any case, this requires the affected entrepreneurs to take the initiative by submitting appropriate applications to the competent authorities. If payment deadlines are missed without such applications, this may lead to late payment surcharges and interest on overdue payments, although possibilities for reductions exist. Your Deloitte advisors will be happy to assist you at any time in obtaining payment facilities. We will keep you continuously informed about current developments and further actions taken by the Austrian Government.
More articles relating to COVID-19:
- Corona: Governmental restrictions lead to complex legal and tax issues
- Further simplifications for deferral of tax prepayments and social security contributions
- COVID-19: Possible labour law implications and subsequent options for employees
- Closed Shops and Empty Offices in Times of the Corona Crisis
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