According to the A. 1193/2020 decision, issued on 24/8/2020 by the Ministry of Finance, the following are clarified:
All property owners who do not receive 40% of the total rent sum, as predicted by the mandatory rent reduction measures imposed to tackle the effects of the COVID-19 pandemic, will not be subject to income tax and the special solidarity levy for the uncollected part of the rent. Also they are not obliged to report these amounts when submitting their annual income tax return.
If they have received rent sums reduced by at least 40%, individuals-property owners are entitled to a deduction equal to 20% on the remaining 60% of the rental income received during the months, against the debts owed to the tax authority and payable from 31/7/2020 onwards, excluding debts arising from arrangements of partial payment (in installments), debts in favor of a foreign state and from recovery of state subsidies.
The amount of the deduction reduces debts to the tax authority payable from 31.7.2020 onwards, in the following order:
- From personal income tax, special solidarity levy, business levy and luxury living tax, resulting from a tax calculation administrative act issued on the basis of a timely initial tax return submission,
- From EN.F.IA.,
- From VAT
- Any other tax, fee, contribution or monetary penalty that falls within the scope of the Tax Procedure Code.
To benefit from the above favorable arrangements the property owner must submit a statement of changes in rent, via the electronic method of communication (“COVID Declaration”).
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