What are the core terms of the new 120 installments scheme?
The new regulation increases the maximum number of monthly repayments from 72 to 120, providing significant breathing room for taxpayers. This measure is designed to address debts to both the Tax Administration and various social security funds, including e-EFKA, provided the liabilities became overdue by December 31, 2024.
To qualify for this settlement, taxpayers must meet several strict criteria. First, they must have legally settled or regulated all other outstanding overdue debts. Any debts arising from January 1, 2025, must be cleared within one month of joining the 120-installment plan. Furthermore, taxpayers must have submitted all income tax returns for the last five years, with a deadline for these filings set for December 31, 2025. A critical disqualifier is a final conviction for tax evasion or smuggling.
The regulation also mandates the inclusion of all eligible debts that are not currently under a payment suspension. For debts that are currently suspended, participation in the scheme remains optional. However, certain liabilities, such as those involving the recovery of state aid based on European decisions, are strictly excluded from this arrangement.
How does the extension affect the total cost of debt?
While the 120-installment plan reduces the immediate monthly financial burden, it results in a higher total repayment amount due to the accumulation of interest. The fixed annual interest rate for these settlements is set at 5.84%.
To understand the mathematical impact, consider a debt of 12,000 euros. Under the 120-installment plan, the monthly payment would be approximately 132 euros, leading to a total repayment of 15,872 euros. In contrast, if the same debt were settled via the previous 72-installment scheme, the monthly payment would rise to 198 euros, but the total amount paid would be limited to 14,254 euros. This comparison highlights the trade-off between monthly liquidity and long-term cost efficiency.
Comparison of repayment terms
The following table illustrates the difference between the two available repayment durations for a hypothetical 12,000 euro debt at a 5.84% interest rate:
| Feature | 72 Installments | 120 Installments |
|---|---|---|
| Monthly Payment | €198 | ~€132 |
| Total Repayment | €14,254 | €15,872 |
| Primary Benefit | Lower total cost | Lower monthly burden |
When and how can taxpayers apply for the settlement?
Applications for the 120-installment scheme must be submitted electronically through the Independent Authority for Public Revenue (AADE) platform. The deadline for submitting these applications is June 30, 2027. The AADE platform is expected to become operational by mid-November 2026.
The process for finalizing the settlement is rapid. Once an application is submitted, the inclusion in the scheme is completed upon the payment of the first installment, which must be made within three working days of the application. Subsequent installments are due by the last working day of each month. A notable provision allows debtors to use amounts from offsets, withholdings for tax clearance certificates, or enforcement actions to cover this initial first installment.
What are the risks of losing the settlement status?
Maintaining the settlement requires strict adherence to the payment schedule. The regulation is automatically cancelled if the debtor fails to meet specific conditions, which would immediately make the remaining balance due and trigger enforcement measures.
The primary triggers for losing the settlement include:
- Failure to pay two consecutive monthly installments.
- Delaying the payment of the last two installments by more than two months.
- Failure to settle remaining overdue debts within one month of joining the 120-installment plan.
- Failure to settle new tax liabilities within three months of their due date.
If the settlement is lost, the state regains the right to pursue immediate collection. This includes the potential for renewed enforcement actions and the suspension of any benefits previously granted by the arrangement.
Benefits of compliance
For those who remain consistent with their payments, the settlement provides significant legal and administrative protections. These include the ability to obtain tax clearance certificates and the suspension of criminal prosecution for non-payment of debts to the State. Additionally, certain enforcement measures, such as third-party seizures, may be lifted under specific conditions, allowing for the release of future claims.
How does the scheme apply to social security funds?
The 120-installment opportunity extends to debts owed to e-EFKA and other social security funds for periods ending up to December 31, 2024. This ensures that the settlement provides a comprehensive solution for both tax and social insurance liabilities.
Applications for social security debts are primarily handled electronically through the KEAO platform. To maintain the arrangement, the first installment must be paid by the last working day of the month in which the application is submitted. Much like the tax settlement, consistent payers can benefit from social security clearance certificates and the suspension of enforcement measures. However, the penalties for non-compliance are equally strict: two consecutive unpaid installments or the failure to settle other social security debts will result in the loss of the regulation.
Key takeaways
- Debtors can spread liabilities over up to 120 monthly installments.
- The minimum monthly payment allowed under the new scheme is 30 euros.
- A fixed annual interest rate of 5.84% applies to all settlements.
- Applications must be submitted via the AADE platform by June 30, 2027.
- Existing 72-installment participants can transition to the 120-installment plan.
FAQ: 120 installments for tax debts
Who is eligible for the 120-installment plan?
Eligible individuals and businesses are those with debts to the Tax Administration or social security funds that became overdue by December 31, 2024. Applicants must have no final convictions for tax evasion and must have submitted all income tax returns for the previous five years.
Can I switch from 72 to 120 installments?
Yes, taxpayers who are currently enrolled in a 72-installment plan have the option to migrate to the 120-installment scheme. This transition is voluntary and is only possible if the existing 72-installment arrangement remains active and in good standing.
What happens if I miss a payment?
Missing two consecutive installments or delaying the final two installments by more than two months will result in the immediate cancellation of the settlement. Once cancelled, the entire remaining balance becomes due immediately, and the state can resume enforcement actions.
How much interest will I pay?
The annual interest rate for the 120-installment settlement is fixed at 5.84%. While increasing the number of installments from 72 to 120 reduces the monthly payment amount, it increases the total amount repaid over the life of the debt due to interest accumulation.
Is there a minimum monthly payment?
Yes, the minimum monthly installment allowed under this regulation is 30 euros. This ensures that even smaller debtors can access the settlement, provided they meet all other eligibility requirements and maintain consistent payments to avoid losing the arrangement.
Conclusion
The introduction of the 120-installment scheme represents a significant policy shift aimed at reducing the long-term debt burden on Greek taxpayers. By offering a decade-long repayment window and a low minimum payment of 30 euros, the government provides a pathway for over one million entities to achieve fiscal regularity. However, the increased interest costs and the strict penalties for non-compliance require debtors to approach the application with careful financial planning. Ultimately, the success of this measure depends on the ability of taxpayers to maintain consistency and avoid the pitfalls of the repayment schedule.
