The Greek government has taken further measures in order to mitigate the effects of the COVID-19 pandemic on the Greek economy and labor market. These measures are described in detail in the latest law 4690/2020 announced through the Legislative Act FEK 104 A '/ 30.05.2020, on 30.5.2020.
The most important Labour and Tax measures are described in the brief below:
A. LABOUR PROVISIONS
Article 31: A new mechanism to support employment under the name «SYN-ERGASIA» is introduced. According to the mechanism any employer with a reduction of at least 20% in his turnover over a reference period is eligible.
Employers can reduce weekly working time of all or part of their employees up to 50%. The State covers 60% of the loss of the net income of the employee. If the net income on a monthly basis is lower than the minimum wage, the State covers all the amount up to the minimum wage. It is important that Social Security contributions are covered by the employer.
The mechanism will be in force from 15.6.2020 to 15.10.2020.
Employers who make use of the mechanism are not allowed, to dismiss nor change (during the relevant period) the nominal salaries of employees who are covered by the mechanism.
Special provisions apply for employers in the business of air transportation (based on their Code of Business Activity - ΚΑΔ). The relevant employers can apply the mechanism until 31.12.2020, and they are obliged to cover Social Security Contributions corresponding to the working time of their employees.
It is important to mention that the "safe operation staff system" that had been introduced in March 2020 is abolished as of 15.06.2020.
Further details of the Mechanism will be provided by Ministerial Decision.
Article 32: The relevant provision refers to Seasonal employees in the tourism sector who have the right to be reemployed. The contracts of the relevant employees can be suspended between 01.06.2020 and 30.09.2020. Employees are entitled to the special purpose compensation of €534 per month.
Based on the occupancy rate, employers are obliged to partially revoke the suspension of the employees. Employees whose suspension is revoked can be included in the «SYN-ERGASIA» mechanism.
Employers who suspend employment contracts are obliged not to dismiss any employees and in case of termination of any employment contract it is considered void.
Article 34: According to the provision of article 34 the employees of businesses that have ceased their operations with a State decision and had been excluded by the Special Purpose Compensation introduced in March 2020, due to the fact that they were on a leave (e.g. maternity, sick leave) are entitled to the above mentioned compensation and of 01.05.2020 provided that the leave has expired during the lock down period. The amount of the compensation is €534 corresponding to 30 days.
Article 35: Employees who are parents are entitled to the special purpose parental leave as it was introduced in March 2020, provided that they reach a relevant agreement with the employer which entitles them to work 25% less hours per day without the reduction of their salary. In such case they will cover the above-mentioned hours at a future time that they will agree with the employer without entitlement to overwork and overtime surcharges.
The above facilitation is provided irrespective of and in addition to the special purpose parental leave.
Article 37: Article 37 determines the issue of the suspension of employment contracts of specific sectors. More specifically:
Employers in the sectors of tourism, transport, culture and sports that have been negatively affected based on their Code of Business Activity – ΚΑΔ can extend the suspension of the contracts of their employees or suspend for the fist time the contracts of all or part of their employees for a maximum of 30 days per month up until 31.07.2020.
In addition, employers in the food sector that have been negatively affected based on their Code of Business Activity – ΚΑΔ can extend the suspension of the contacts of their employees or suspend for the fist time the contracts of all or part of their employees for 30 days per month up until 30.06.2020.
Employees during the suspension are entitled to the special purpose compensation of €534 per 30 days.
Employers who suspend the employment contracts of their employees are not allowed to dismiss their employees until 30.06.2020 and 31.07.2020 respectively. In addition, they are obliged to maintain the same number of employees and under the same employment contract type for 30 days after the expiration of suspension time.
Further details for the Mechanism will be provided by Ministerial Decision.
B. TAX PROVISIONS
Article 3: Extension of the benefit of the 25% discount on timely payments of certified debts that expired in May 2020
The discount of twenty-five percent (25%) for businesses and individuals, extends on timely paid installments of certified debts and installments of settlements or facilitations which were due in the period of May on the condition that the payment deadline was extended according to previous legislated acts. The discount of twenty-five percent (25%) also applies to debts paid from March 11, 2020 to March 29, 2020 and is carried out through offset of equal amounts to other certified debts, or installments of settlements or facilitations of partial payment to the Tax Administration, whose deadline starts after June 1, 2020.
Article 4: Extension of the reduction of professional rents, residential rents, rents of dependent members – students and rents of sailors for the month of May 2020
The lessee of professional lease of a business establishment which have either been severely affected by the COVID-19 epidemic or have been under extraordinary measures to suspend or temporarily prohibit operations for precautionary or repressive reasons related to the COVID-19, is released from the obligation to pay 40% of the total rent for the months of March, April and May 2020, by way of aberration from the existing legislative provisions on leases.
Article 6: Extension of deadlines for payment of tax charges corresponding to coffee products
The collection of the excise tax and value added tax (VAT), which are certified by the customs authorities in accordance with Law 2960/2001 for coffee products, which came out of a tax warehouse in April 2020, is extended to June 25, 2020. The provisions apply to documents of excise tax submitted for the certification of the above tax charges until the 25th of May 2020.
The deadlines for the collection of the excise tax and the VAT corresponding to coffee products are extended by ten (10) days for the cases where the obligation of certification and collection is generated until the 5th of June 2020.
The above provisions apply from May 25, 2020.
Article 11: Reduction of VAT rates for specific goods and services from June 1, 2020 to October 31, 2020
The tax rate on non-alcoholic beverages without addition of alcohol in any ratio and sparkling drinks is set at thirteen percent (13%).
The tax rate for the exploitation of cafes, coffee shops, confectioneries, restaurants, grills, wineries and other related businesses, except for entertainment halls, with the exception of the distribution of alcoholic beverages in any proportion is set at thirteen percent (13%).
The tax rate on transport of persons and their luggage is set at thirteen percent (13%).
The tax rate on cinema tickets, tickets for theatrical performances and concerts is set at six percent (6%).
Article 13: Measures to support the lessors (landloard) from the partial collection of leases by order of law in the context of tackling the effects of the coronavirus
The amount of the rent that has not been or will not be collected at the request of law does not constitute income and is not subject to income tax and special solidarity contribution of article 43 of the I.T.C. The measure applies to all the months that the provision of the reduced rent by 40% has been or will be into force.
The entities have the right of deduction of an amount equal to 20% on 60% of the rents of the aforementioned periods prior to the reduction, from their debts ending July 31, 2020 and onwards, except for debts from settlements or facilitations for partial payment, debts in favor of a foreign public and from recovery of state grants. This applies on the condition that these entities have been remitted reduced amount of rent at least by 40%.
Article 14: Extension of deadlines for payment of certified debts and installments of settlements/facilitations for partial payment, suspension of collection of overdue debts and 25% offsetting with certified debts for real estate tenants (for the month of May)
For those who lease real estate to lessees exempted from paying 40% of the rent in May 2020 and the deadline for payment of their debts and installments of settlements were in the same month, this is extended to 30/09/2020 and the collection of their overdue debts is suspended. Interest and late payment surcharges are not calculated for the period of suspension.
For those who lease real estate to lessees exempted from paying 40% of the rent in June 2020 and the deadline for payment of their debts and installments of settlements were in the same month, this is extended to 30/10/2020 and the collection of their overdue debts is suspended. Interest and late payment surcharges are not calculated for the period of suspension.
Twenty-five percent (25%) of those debts paid from 11/03/2020 until the entry into force of the Law, or of those that will be paid on time, is offset by other certified debts or installments of settlements/facilitations of partial payment to the Tax Authorities with expiration dates from 31/07/2020 onwards.
In the case of debts that are in the regime of settelement facilitation of partial payment, a percentage of twenty-five percent (25%) of the amount of the adjustment installment is deducted.
The benefit of the present excludes debts from VAT and withholding taxes that have not been subject to a regime of settlement/facilitation of partial payment, as well as debts arising from the recovery of state financial support.
Article 15, par 1: Extension of the reduction of professional rents, residential rents, rents of dependent members – students and rents of sailors
The lessees of professional lease of a business establishment, for which special and extraordinary measures on suspension or temporary prohibition of operations have been taken during March, April, May 2020 or also taken in June for precautionary or statutory reasons, are also exempted from the obligation to pay 40% of the total lease for the month of June 2020, by way of aberration of the existing legislative provisions on leases. The lessees of professional lease of a business establishment which continue to be financially affected by the appearance and the spread of COVID-19 epidemic, are released from the obligation to pay 40% of the total lease for the months during which they are affected and not later than August 2020 by way of aberration of the existing legislative provisions on leases.
By decision of the Minister of Finance, following a proposal by the Governor of the Independent Public Revenue Authority (AADE), the affected companies of the previous paragraph by branch and per month are determined, as well as any other necessary details for the implementation of this.
Article 27: Reduction of Social security contributions by twenty-five percent (25%) for the self-employed/individual professionals (not corporations) for the months of April and May
Self-employed professionals, are provided with the option to pay their monthly social security contributions reduced by 25% on the condition that they pay the contributions of the months February, March, April and May 2020 in a timely manner and given that they have not previously used the alternative option of the extension of the deadline of the aforementioned payments according to the previous Leg. Act. of March 20, 2020.