Interest rates that burden debts under the permanent settlement scheme will remain “frozen” at the same levels until April 2027, according to an amendment by the Ministry of Finance submitted to Parliament, ensuring stability for thousands of taxpayers and businesses servicing regulated debts. Based on the relevant provision, the interest rate for debt repayment in up to 12 installments remains at 4.34% for another year, while for 24 to 48 installments it stays at 5.84%.
At the same time, the interest rate of 8.76% per year or 0.73% per month for overdue tax payments remains stable until August 10, 2027, along with the annual interest rate of 6% based on which interest on refunds of unduly paid taxes is calculated. According to legislation, if any tax amount is not paid within the legal payment deadline, the taxpayer is charged interest on the tax amount that “runs” from the day after the expiration of the legal deadline.
Interest rates: Stable charges for settlements up to 48 installments
The provision comes to “lock in” the cost of servicing settlements, limiting uncertainty for debtors in an environment of increased financial pressures as international monetary conditions due to the Middle East crisis remain particularly volatile. In this context, the European Central Bank is expected to adopt a strict stance against inflation, leaving open the possibility of interest rate increases by putting a temporary “stop” to reductions.
It should be noted that the permanent settlement currently constitutes the only facilitation tool for taxpayers with overdue debts, as it provides the possibility of partial repayment in up to 24 installments for regular obligations (such as income tax or ENFIA) and up to 48 installments for extraordinary debts, such as fines or taxes arising after audits. One of the main advantages of the settlement is that upon inclusion, enforcement measures (such as seizures) are suspended, while the debtor can obtain tax clearance under certain conditions.
Tax authority: Where the highest settlement rates are found
However, despite the fact that approximately 4 million taxpayers have outstanding debts totaling 114.24 billion euros, the latest AADE data shows that only 6.65% of the actual overdue balance (80 billion euros) has been included in a settlement, a percentage corresponding to 5.26 billion euros, highlighting the limited scope of utilization of the measure. The highest percentage of total settled debts (18.01%) is found in the range of 10,000 to 100,000 euros, while within this range the percentage of settled debts reaches 19.23% for amounts from 20,001 to 50,000 euros. The highest percentage of settled debts by individuals is found between 500 and 10,000 euros (16.73%) and reaches 19.22% for amounts from 2,000 to 3,000 euros.
Conversely, legal entities settle at a higher rate (26.03%) debts in the range from 10,000 to 100,000 euros, while this percentage reaches 27.72% in the category of 20,001 to 50,000 euros. Low debt settlement rates are observed both for low debt amounts (particularly below 500 euros) and for high debt amounts (above 50,000 euros for individuals and above 300,000 euros for legal entities).
