The situation with Covid-19 has severely affected the economy and the business activity in Greece. The measures that have been taken by the Greek Government in order to reduce contamination include the suspension of operation of educational institutions of all levels, suspension of operation of several businesses and a curfew that is in effect from March 23rd until April 6th. In this context a series of measures have been decided by the Government to support the economy, businesses and employees.
Labour Relationship Provisions
Concerning the issue of Labour Relations the most important are summarized below:
1. Businesses that have been negatively affected by the situation could be categorized as following and as analysed below:
- Businesses that have ceased their operations with a State decision, and
- Businesses that have been substantially affected by the situation.
Greek authorities have created a list of the latter based on the Code of Business Activity (ΚΑΔ) as this has been declared to the Tax Authorities. The list is updated regularly.
- Cease of specific businesses operations with a State Decision.
In this case the employees are not entitled to their salary, for the period the business is closed due to the Sate decision, since this is considered a force majeure event.
- Businesses that have substantially been affected by the situation.
In this case the employer is entitled with the right to suspend the employment contracts of their employees for up to 1 month, starting from 20th March 2020. Τhis measure can be extended by a decision of the competent Greek authorities, however no further information is available at this moment in time.
In both cases (a) and (b) the employees are entitled to a special purpose compensation of 800 euro paid by the State. The relevant amount is free of tax and covers the period until 30th of April 2020.
Regarding the procedure in regards to making use of the above measures the employer is obliged to submit a declaration with ERGANI where he will declare whether he belongs to case A or B, and the details of the employees that are not entitled to their salary. Then the employee must be notified by the employer and he/she must submit an electronic declaration with the IBAN number of his/her Bank account and refer to the submission number of employer’s declaration.
The employees will have full social security insurance calculated on their full salary and the social security contributions will be covered by the State.
It is important to mention that the above businesses are not allowed to terminate the employment contracts of their employees, and such terminations will be considered void.
2. In case that the employee is affected by the virus, then the general provision for sick leave are applicable. According to the relevant provisions, the employer must pay to the employee (as long as the employee has provided services for at least 10 days):
- Half month’s pay, in the case that sickness occurs during the first year of employment
- One month’s pay, in the case that sickness occurs after the first year of employment.
3. The provision that has been implemented by the Government include a special purpose leave, that is provided to working parents.
The scope of this leave covers the parents who have children:
- enrolled in nursery schools and kindergarten,
- attending in mandatory education schools (general rule: up until the age of 15), and
- attending in special schools or special education and education institutions, irrespective of the children’s age, and to the working parents of persons with disabilities who, regardless of their age, are cared for by relevant institutions.
The minimum period of this special purpose leave is 4 days, 3 days of which correspond to the special purpose leave and 1 day to the annual leave of the employee. The State will subsidize1/3 of this leave.
Employees are entitled to the special purpose leave for as long as educational institution operation is suspended and up until 10.04.2020, provided that at least one parent works in the private sector as an employee, even if the other parent is a freelancer.
If both parents work, they decide who will be entitled to the special purpose leave and they submit a relevant declaration with the employer.
4. Other measures include the right of the employer to unilaterally enforce teleworking and the suspension of working time declarations to ERGANI. The declarations will take place within the first 10 days of the following month.
1. Arrangements for company tax liabilities
- Reduction of VAT rate to 6% from 24% on specific products needed to protect against coronavirus and prevent its transmission.
- Suspension of payment of taxes for 4 months and social security contributions of February & March (until 30/09/2020 & 31/10/2020 instead of 31/03/2020 and 30/04/2020 respectively) for affected businesses, provided that they maintain their existing head count and that they make no dismissals.
- Provisions for businesses who’s Codes of Business Activity (KAD) are included in the published list of the Ministry of Finance:
Businesses deemed to be affected for the purposes of the suspension are those who’s Codes of Business Activity (KAD) were defined on 20/03/2020 by law and are included, per sector and region, in a published list of the Ministry of Finance. For these companies, and only in the condition that they will not dismiss any personnel, payments related to:
a. Tax liabilities due at 31/03/2020,
b. Tax liabilities generated from 11/03/2020 until 30/04/2020,
c. Monthly Installments relating to past debt arrangements,
are suspended for 4 months (until 31st of August, 2020) without interest or surcharges.
In the event that the suspension is not utilized by a company and debts are paid at the timeframes originally set (e.g. until 31/03/2020, 30/04/2020 etc.) there is a provision, but has not yet been legislated, of having a 25% discount on certified tax debts, installments of tax arrangements (excluding VAT).
It is now possible to submit electronically and through Taxisnet authentication of application forms, statement of authorization, authorization and electronic applications to Citizen’s Service Centers. This also applies to legal representatives of businesses using their personal Taxisnet codes.
For businesses who compulsorily discontinue their operation due to the spread of coronavirus or their KAD is included in the list of the Ministry of Finance, there is a provision by law that they will pay 60% of the rent on the commercial property for the months of March and April. The same applies to the rent of employees of undertakings who are compulsorily ceasing their activity due to the spread of the coronavirus and whose employment contract is suspended, on the condition that this is their first residence.
2. Arrangements for prolonging the filing of tax returns
- Up to date, no extension of tax filing deadlines, such as VAT, Salary Tax and other Tax statements has been announced. Extensions concern only payments.
- No extension has been announced yet for filing of FY 2019 CIT returns
- The only extension announced is that of the submission of tax information on invoices issued and received related to the calendar year 2019. Deadline was until 30 April 2020. It has been extended up to 30 June 2020. The correction of discrepancies is extended until 31 July 2020 instead of 31 May 2020.
- Prolonging of submission of Rent Agreements to Taxisnet portal for Agreements starting from 01/02/2020 to 31/05/2020., the submission is now until 30 June 2020.
- The General Assembly (GA) of Shareholders/partners of any legal entity can take place by teleconference of all or some of its members. This is applicable until 30 June 2020. In this case, the invitation to the members of the GA should include the necessary information and technical guidelines for their participation in the session.