The countdown has begun for the 120-installment debt settlement plan, with more than 1 million debtors awaiting the launch of the online platform in mid-November. The platform will allow taxpayers to restructure old debts owed to the Tax Authority and social security funds — debts that currently exceed €95 billion. The new scheme enables repayment over a full decade, reducing monthly payments by up to 40%, with a minimum installment set at just €30.
Read also: Tax debts: The 120-installment plan is coming in November — Who qualifies
According to the relevant provision included in the omnibus bill submitted to Parliament by the Ministry of National Economy and Finance, the new arrangement covers debts owed to the Independent Authority for Public Revenue (AADE) and the EFKA social security fund that became overdue by December 31, 2024. This broadens the scope compared to the previous 72-installment scheme, which only covered debts up to the end of 2023. A second key deadline is September 30, 2026 — debts included in the arrangement must not be under any active settlement plan on that date.
Applications must be submitted electronically, with a final deadline of June 30, 2027. Enrollment is activated upon payment of the first installment, which must be made within three business days of submitting the application. Subsequent installments are due by the last business day of each month.
To qualify for the settlement, debtors must meet the following conditions at the time of application:
- They must have no other overdue debts — or, if such debts exist and cannot be included in the 120-installment plan, they must have been legally settled through a payment suspension, restructuring arrangement, court ruling, or interim order. Debts incurred after January 1, 2025, must either be paid in full or included in the standard 24- or 48-installment settlement scheme.
- They must have filed all income tax returns for the last five years, up to and including the 2024 tax year.
- They must not have been convicted by a final court judgment for tax evasion or smuggling.
How much can your monthly payment be reduced?
The increase in the number of installments from 72 to 120 is the cornerstone of the new arrangement, allowing debtors to cut their monthly payments by up to 40%. The minimum installment is set at €30, and the interest rate is 5.84% — the same as the standard 24-installment plan. As an indicative example, for a debt of €3,600, the monthly payment drops from €50 under the 72-installment plan to €30 under the 120-installment plan. The benefit is even greater for those with higher debts, as the extended repayment period reduces the immediate financial burden and frees up liquidity for both households and businesses.
For a debt of €5,000, the monthly payment falls from approximately €82.50 under the 72-installment plan to €55 under the 120-installment plan. Similarly, for a €10,000 debt, the installment drops from around €165 to €110, while for a €25,000 debt, it is reduced from approximately €412 to €276 per month.
The hidden trap: the true cost of interest
However, a lower monthly payment comes with a significant caveat. The longer the repayment period, the greater the total amount paid due to accumulated interest. For example, on a €10,000 debt, the total repayment amounts to approximately €11,878 under the 72-installment plan — but rises to €13,226 under the 120-installment plan, meaning the additional interest burden is €3,226. For a €20,000 debt, the total repayment is approximately €23,756 under 72 installments and €26,452 under 120 installments — an extra interest cost of roughly €3,756 and €6,452, respectively. In short, the 120-installment plan lowers your monthly payment but increases the overall cost of the settlement.
What happens to those already enrolled in the 72-installment plan?
The new arrangement also offers a way out for those already enrolled in the previous scheme. By submitting a request, they will be able to transfer their remaining debt balance into the 120-installment plan, extending the repayment timeline and reducing their monthly payments. This option applies to approximately 35,000 debtors currently enrolled in the 72-installment plan.
When you lose the settlement — and what protections you gain
Enrollment in the plan does not exempt debtors from the obligation to pay their current tax and social security liabilities on time. The settlement is at risk of being revoked if two consecutive monthly installments are missed, or if the last two installments are delayed by more than two months. Revocation also applies if debts left outside the arrangement are not paid or settled within one month of enrollment, or if new overdue debts arise and are not paid or restructured within three months of their payment deadline. In the event of revocation, the outstanding balance becomes immediately due and payable.
Upon enrollment, debtors gain the ability to obtain a tax clearance certificate, while criminal prosecutions and enforcement measures — such as asset seizures and auctions — are suspended. In certain cases, protection against future third-party garnishments is also provided, provided these relate exclusively to debts included in the settlement arrangement.
