The House of Representatives has passed a motion to allow business owners to repay their coronavirus-related debts over seven years rather than five.
Easing of restrictions
Earlier this week, in our article, we described Repayment arrangements for coronavirus-related debts have been relaxed the Government’s proposal to relax the rules on the repayment of tax debts for which a special deferral of payment has been granted (“coronavirus debts”). These relaxations are based on scenario 2 of a Chamber letter.
Motion
The bill passed by the House of Representatives motion means that scenario 3, rather than scenario 2, will be applied. Scenario 3 entails extending the repayment period from 5 to 7 years, but not without conditions. This extension must, in fact, apply only to viable businesses. To prevent misuse, companies must demonstrate that they are sufficiently viable. However, only a light assessment should be applied in this regard. This could include a liquidity forecast demonstrating the necessity and feasibility of an extended repayment period. Where financial stakes are higher, this may be supplemented by the mandatory involvement of an independent expert.
As always, companies must meet all new payment obligations punctually.