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Debt Payment Flexibility to Social Security

The Decree-Law 35-C/2016, of 30 June, has introduced amendments to the legal regime that establishes the flexibility of debt payment to Social Security.

The changes introduced are intended to facilitate instalment payments, and increase the compliance rate of the agreements with individuals and businesses, thus avoiding further debts.

It should be noted that this law harmonises a 2016 plan to combat fraud and tax evasion, which is of crucial importance in the efficiency, transparency and confidence building of the powers of the social security services, helping taxpayers to meet their contribution obligations.

The main change created by the new legislation, is the reduction of the minimum access limit to instalment plan agreements.

Until now, only debts to social security that reached €5,100 could be paid by individuals in up to 60 instalments. With the approval of the mentioned legal diploma, it will now be possible to pay, in the same number of instalments, debts that reach the value of €3,060.

Regarding the payment of debts by companies, currently it is possible to extend the payment period to 120 instalments for debts of the minimum value of €15,300, where previously it was only possible concerning debts in the amount of €5,000 or less.

With the entry into force of Decree-Law n.º 35-C/2016, the maximum number of authorised instalments is extended up to 12 months (previously it was 6 months), provided that the value of debt covered by the agreement exceeds €3,060 for individuals and €15,300 for businesses.

Finally, note that these new rules are extended to all instalment agreements currently in force, provided that an application is submitted to request a review of the existing agreement.