Support measures: VAT reduction, rent exemption, refundable advance payment

The measures of immediate application with the aim of supporting the economy for February to March, announced the Minister of Finance Christos Staikouras on Monday morning, 08/02. The total cost for the support measures for the first quarter of the year, including contract suspensions, is EUR 5,9 billion.

The package includes:

1. 1. All companies whose operation is currently suspended by order of a public authority, such as restaurants, gyms, cultural and sports businesses and other sectors, as well as businesses operating in tourism and transport - sectors that are particularly affected by the health crisis - are entitled to a mandatory full exemption from paying rent on their business properties for the month of March. Businesses that will receive full rent exemption for the month of March include retailers. The owners - natural persons who lease property to these businesses will be compensated by the budget with the 80% of the monthly agreed rent, while the owners - legal entities will be compensated with 60% of the monthly agreed rent. The provision for a 40% rent reduction applies to the remaining affected sectors, for the entire first quarter of 2021, as well as to primary residence employees whose employment contract is suspended and in the student residence of their children. The cost for March amounts to EUR 70 million.
   2. As far as property owners are concerned, they have borne a significant financial burden to date: Tax debts amounting to €42.8 million have been offset in 227,887 cases. -Compensation of €19.3 million paid to 176,404 TAFs for November. Available: Completion of the procedure in February, for pending offsets from previous months, either due to corrections of beneficiaries' declarations or due to rejection of other applications. Completion of the compensation procedure for November, in the coming days, given that around 25,000 applications have not submitted a valid IBAN account number. Payment of compensation for December, after mid-February. Start of the declaration procedure by owners- by next week - for January, so that at the beginning of March this month can also be paid. The amounts of compensation paid into beneficiaries' accounts are tax-free and unencumbered. While, rental amounts not received for the entire period from March onwards are not income and are not subject to income tax and solidarity levy.
   3. The reduction of VAT rates on coffee and non-alcoholic beverages, transport, cinemas and theatrical performances is extended until 30 September 2021. The reduced rate applies to all transport of passengers and their luggage, i.e. any type of passenger transport, such as land or air transport, which is carried out with a ticket for the passenger. Also included are passenger transport operations carried out by tourist buses and taxis. In addition, the reduction of VAT on the tourist package is extended until 31 December 2021. The additional costs amount to EUR 125 million.
   4. The remaining amount of the 5th cycle of the «Refundable Advance» is paid within the week. To date, in just the last few days, more than €1 billion has been paid out in 344.885 enterprises and freelancers. According to the data so far, since the relevant platform closes today, there are about €200 million pending payment to 15,000 businesses, most of which are new businesses, following the recent addition made by the Ministry of Finance to include them. Within the week, and for only a few days, will be given the possibility of correcting the VAT return for OPAP agencies, so as to include in the refundable advance those of them so far rejected and show a drop in turnover. At the same time, in order to speed up the liquidity support to the sectors most affected by the economic impact of the pandemic, the 6th cycle of the Repayable Advance is split into two cycles, the 6th and the 7th, and the total funding is increased to €1.5 billion. The 6th cycle, with an estimated budgetary cost of around EUR 500 million, will only relate to the loss of turnover in January. The submission of applications for interest will start by next Monday, and aid will be granted in the first days of March. As the aid is for one month, the minimum aid threshold for sectors that do not remain closed by public order is EUR 500 and the maximum aid amount is EUR 50,000. Freelancers without employees will receive between 500 and 1,000 euros, depending on the fall in their income. In particular for focus and the sectors that were still closed at the end of January, the minimum aid amount will be EUR 1,000 for enterprises with no employees, EUR 2,000 for enterprises with 1 to 5 employees, EUR 4,000 for enterprises with 6 to 20 employees and 8,000 euros for companies with more than 20 employees. The 50% of the aid is not refundable, provided that the number of employees is maintained until 31 July 2021. In the current context, the 7th cycle, with a budgetary cost of around €1 billion, will concern the loss of turnover for the entire first quarter of 2021, which will include the amounts given in the 6th cycle. The payment of the aid will be made in April. Again there will be increased thresholds for restaurants and businesses that remain closed by government order in February. The 50% of the aid will not be reimbursed. The total injection of liquidity to businesses through the «Reimbursable Advances» measure is expected to reach €3 billion in the first quarter of the year, and a total of €8.5 billion since the beginning of the health crisis.
   5. By the Tuesday, 9 February, at 10.00, the 24,000 beneficiaries of the heating allowance can, who had not registered their IBAN in the myTaxisnet, to do so, so that the amount can be deposited in their bank account. Already 3,000 of them have done so over the weekend. The amount will be credited to these beneficiaries tomorrow afternoon. To date, 355,314 beneficiaries, or 94% of those who made oil purchases up to December 31, 2020, have been repaid, with the total amount exceeds EUR 42 million.