Restructuring of tax and premium debts will allow many debtors to repay their obligations more easily. However, after restructuring, certain points must be observed to preserve the benefits of the arrangement.
What You Need to Know About Restructuring
Under the law enacted for the payment of certain receivables—primarily tax and social security premium debts—many debtors’ obligations were brought within a restructuring framework. In particular, receivables monitored by the Social Security Institution (SGK) have been included under laws covering SGK debts. But simply having a debt restructured is not enough. After restructuring, specific conditions must still be met. If these requirements are ignored, the right to benefit from the restructuring can be lost.
For SGK debts, debtors who chose the lump-sum payment option must pay the required amounts no later than March 1, 2021. Likewise, those who converted a lump-sum payment request into an installment plan must make their first installment payment by March 1, 2021. Failure to make the lump-sum payment or the first installment by this date will result in the loss of the right to benefit from the restructuring provisions. However, if the lump-sum amount calculated is not paid, or is paid partially by March 1, 2021, a delayed payment interest rate will be applied to the unpaid or underpaid portion. If that unpaid or underpaid balance plus the applicable delay interest is paid by March 31, 2021, the lump-sum payment provisions will still apply to the SGK premium restructuring debt.
Key Points for Those Who Chose Installment Restructuring
There are important rules for those who opted to pay SGK debts in installments. The first installment must be paid in full by March 1, 2021, and the second installment must be paid in full by April 30, 2021. If these payments are not made in full within the specified deadlines, or if they are not paid in more than two installments within a single calendar year, the right to the restructuring will be revoked. Even if the first two installments are paid in full within their deadlines, failing to make no more than two installment payments in a calendar year, paying an amount lower than the scheduled installment, or failing to complete an underpayment by the end of the relevant month will trigger delayed payment interest. If the delay interest and payments are not settled, the right to installment restructuring will also be lost.
Each installment that is unpaid, underpaid, or past its legal due date constitutes a breach of the installment plan. Debtors who have chosen the installment option must therefore ensure that all installments are paid in full within the applicable deadlines. Installments that fall at the end of the year must also be paid by the last payment dates applicable to that year; delays in those payments will likewise be treated as violations.
Important Points About Offsetting (Mahsup) Transactions
For the payment of restructured debts, debtors who applied for lump-sum payment and make partial payments in offsetting transactions under the omnibus law will benefit from the law’s provisions only to the extent of the amounts they have actually paid. Payments made after the law’s effective date, where the lump-sum option was chosen, will be applied against the lump-sum amount. If the installment option is chosen, payments made will be credited to the first installment. Similarly, when a debtor has overdue installment obligations, payments will be allocated to the oldest unpaid installment that was not yet due at the time the payment was made.