A “breath of relief” for over 1.8 million debtors comes from both the new 72-installment payment plan and the expansion of criteria for the out-of-court settlement mechanism. This gives them the opportunity to break down debts totaling 160 billion euros owed to tax authorities and social security funds into installments, putting an end to anxiety about bank account seizures, income garnishments, and property auctions, while gradually achieving a cleaner financial profile.
Detailed guide for the 72 installments
Taxpayers should now weigh which of the two schemes suits them better to organize their finances. This is because these are two different tools with separate conditions, procedures, and levels of protection, which can provide substantial relief to thousands of debtors. For this reason, consistency in adhering to terms and strict compliance with prescribed deadlines is required, as even one delay or failure can lead to loss of the arrangement and reinstatement of enforcement measures. PARAPOLITIKA presents a detailed guide for the new options available to taxpayers with outstanding debts to the state.
What applies to applications
The electronic platform for applications from those wishing to repay old debts in up to 72 monthly installments is expected to open in mid-July, with the deadline for submitting applications expiring on December 31, 2026. The measure affects 1.3 million individuals and 284,000 legal entities with 95.3 billion euros in overdue debts.
According to the relevant provision, if there is technical inability for electronic submission, the application is submitted to the service whose head is responsible for pursuing debt collection. Those with tax debts will enter with their personal codes to myAADE and the section “My Account > Debt Arrangements” or the corresponding electronic application for EFKA debts, choosing the number of installments according to their financial situation, and the system will automatically calculate the monthly amount based on their debt amount. Attention! To finalize the arrangement, the first installment must be paid within three days of submitting the application. Otherwise, the arrangement will remain on paper.
Specifically, certified debts to tax authorities and social security funds that became overdue by December 31, 2023, and remained unsettled until April 21, 2026, are regulated. The arrangement mandatorily includes all debts that are not under payment suspension on the application date, while debts under payment suspension on the application date may be included at the debtor’s option.
The debtor on the date of submitting the application must not have other overdue debts, or all other overdue debts must have been paid or settled legally. In other words, the debtor must not have any other open accounts with tax authorities, except for debts that became overdue by the end of 2023.
Additionally, they must have submitted all income tax returns for the last five years whose filing deadline expired by December 31, 2025, and must not have been irrevocably convicted of tax evasion or smuggling. Under no circumstances can the monthly installment amount be lower than 30 euros, while the basic debt is charged with a fixed annual interest rate of 5.84% throughout the arrangement period. In case of delay in paying an installment, the amount is charged with surcharges.
The first installment is paid within three working days from the application submission date, and subsequent installments are paid by the last working day of the following months from the application date.
Primary residence protection
The out-of-court mechanism is expanded to cover smaller debts, from 5,000 to 10,000 euros, opening the door to approximately 300,000 additional debtors. Additionally, it provides the possibility of repaying and saving the primary residence through liquidation of other properties.
Unlike the 72-installment arrangement, the out-of-court mechanism considers the debtor’s overall financial picture. Income, assets, bank deposits, other obligations, and actual repayment capacity are examined. For this reason, inclusion requires consent to lift banking and tax secrecy.
Specifically, under the new framework, the debt threshold for inclusion in the out-of-court settlement is set for debts above 5,000 euros, with repayment possible in up to 240 monthly installments and partial write-off of interest, surcharges, or even part of the basic debt, with a fixed 3% interest rate. With the application, creditors can propose liquidation of the debtor’s other properties, except the primary residence, to cover debts, while only the value of the primary residence is calculated in the arrangement. Once the agreement is signed and properly maintained, the primary residence is protected from seizures and auctions.
Attention! If not maintained, protection is lost and no new arrangement can be made for the same debts. Finally, a six-month opportunity for new applications is given to those who had previous arrangements but lost them for non-payment.
Published in Parapolitika
