COVID-19 phased payment plans: Ordinance on phase 2 – evidence of ability to pay
The Austrian Minister of Finance has issued an Ordinance regarding the formal requirements for evidence of the ability to pay in connection with applications for phase°2 of the COVID-19 phased payment plan. The ordinance entered into force on 1 August 2022.
To mitigate the financial impacts of the COVID-19 pandemic, the Austrian Federal Fiscal Code (BAO) provides for a special COVID-19 phased payment plan (see Tax Newsletter of 29 June 2021). In this way, Section 323e BAO creates the possibility to request payment in instalments of any outstanding taxes arising due to COVID-19, in two overarching phases over the course of max. 36 months (July 2021 to June 2024). Applications for phase 2 have to be submitted by 31 August 2022.
In accordance with Section 323e para 3 number 5 BAO, for this application the applicant must credibly demonstrate that the remaining outstanding taxes from phase 1 can be paid within phase 2 of the phased payment plan, in addition to any regular tax payments. The newly issued ordinance, in conjunction with Section 323e para 4 BAO, determines the form in which this evidence needs to be submitted. The form of this evidence depends on the amount of the outstanding taxes at the time of application.
In the case of outstanding taxes of EUR 20,000 or less, it is sufficient as evidence in accordance with Section 323e para 3 number 5 BAO, that
- the phased payments and
- any regular tax payments that were due during that period
have been paid in full and on time. Any additional documentation required as evidence must be submitted to the competent tax authority on request.
In the case of outstanding taxes of more than EUR 20,000, a comparison of expected income and expenditure must be submitted for the phased payment period being applied for. This should show how the necessary funds will be obtained to ensure the continued existence of the company as a going concern. The funds required to pay the outstanding taxes and regular taxes must be listed separately.
Our tax procedural law experts would be glad to advise and assist you in preparing an application for phase 2 of the COVID-19 phased payment plan.