Article:

Tax Arrears

10 June 2021

Thomas Neumann, Director |
Claudia Sonnleitner, Senior Manager |

How can tax arrears be reduced? In view of the payment deadline of 30.6.2021, the BMF will send an information letter in the next few days to all those taxpayers who have more than EUR 100 in tax arrears on their tax account. We have thus summarized the options available to settle the tax debt built up during the Covid 19 pandemic:

 

End of the tax deferral
The tax deferrals provided for by law (granted after 15.3.2020) expire on 30.6.2021. For taxes due between 15.3.2020 and 30.6.2021, no late payment surcharges are to be paid. Furthermore, no deferral interest will be charged for this period. As of 1.7.2021, the deferral interest will be 1.38% (instead of 3.38%) until 30.6.2024. 

 

Covid 19 installment model
The Covid 19 installment payment model, including the so-called "safety car" phase, allows gradual repayment of the levy debt in two phases over a total period of up to 36 months:

  • Phase 1: max. 15 months until 30.9.2022
  • Phase 2: max. further 21 months until 30.9.2024

 

Installment agreements phase 1
This model is available to all those for whom more than half of the tax arrears became due after 15.3.2020. This also includes advance payments of income tax or corporate income tax that have already been assessed.

From 10.6.2021 to 30.6.2021, the application for payment by installments can be submitted via FinanzOnline or informally by mail. The installment payment period is a maximum of 15 months until 30.9.2022 at the latest. The installments do not have to be the same amount, but they must be reasonable. A one-time redistribution of the installment amounts is possible upon request.

 

"Safety car" phase
Under the Covid 19 installment model, there is a flexible initial phase, the so-called "safety car" phase. In the event of liquidity problems, it is possible to agree only a minimum amount (1% or 0.5% of the total tax arrears) as an installment in the first three months (July, August and September 2021). 

 

Installment agreements phase 2
For tax debts that could not be paid in full by the installment payments of phase 1 (until 30.9.2022), an application for installment payment can be submitted by 31.8.2022 at the latest until 30.6.2024 at the latest. The installment payment period is a maximum of 21 months. The installments do not have to be the same amount in phase 2, but they must be reasonable; a one-time redistribution of the installment amounts is also possible upon request.

The following requirements are necessary for an installment payment in phase 2:

  • In Phase 1 (through 30.9.2022), at least 40% of the predominantly corona-related levy arrears must be paid.
  • In the installment payment period, there must be no loss of deadlines; newly due levies must be paid on time in any case!
  • In addition, it must be shown credibly that the tax arrears can be paid within the requested installment payment period in addition to the taxes to be paid on an ongoing basis.
  • The application can be submitted until 31.8.2022 at the latest.

 

Short-time work phase 5

Phase 4 of Corona short-time work ends at the end of June 2021. The social partners and the federal government have now agreed on new regulations for Corona short-time work from July 1, 2021. The new social partner agreements and the adapted AMS short-time work guidelines are expected to be published next week.

 

2 variants
As of 7/1/2021, Corona short-time work is available in 2 variants:

  • Corona short-time work for particularly affected industries
  • Corona short-time work as a transitional model for all other industries