Suspended arrears reached EUR 8,436 million last year, with tax arrears suspended either pending a court ruling or insolvency proceedings. Active debt (considered to be repayable) last year amounted to EUR 6,193 million. In total, the tax authorities are required to levy 14 629 million euros in taxes. An amount that rises to more than 22 billion euros when calculating the prescribed debts, which, since these are old debts and are difficult to recover, after exhausting all legal attempts to collect them, will end in processes declared unfulfilled.
“The debt portfolio of 22,033 million euros at the end of 2020 shows a relative increase of 4.2% compared to the previous year. However, suspended debt and active debt declined by 0.5% and 0.7%, respectively, ”says the 2020 Anti-Fraud, Tax and Customs Evasion Report, where it understands that outstanding debt has decreased from 6,224 million euros in 2019. to 6,193 million euros last year (a decrease of 21 million), while suspended debt fell by 61 million to 8,436 million euros.
The debt declared in default increased from 982 million euros to 7.404 million euros.
The tax administration explains that in respect of the debt declared as a result of default, in 2019, for the first time, more was presented than the outstanding debt (6 422 million versus 6 224 million, respectively). A trend that continued in 2020: debt declared in default amounted to 7,404 million euros, which is higher than the 6,193 million outstanding debts recorded in the past.
The failed portfolio nearly doubled
Regarding defaulted debt, AT reports that “over the past four years, it has represented a consistent annual growth of about one billion euros per year”: in 2017 it was 4166 million euros, in 2018 this figure was already 5,034 million, in In 2019, it was 6 422 million euros, and last year it reached a record high of 7 404 million euros.
The defaulted portfolio has nearly doubled over the past four years, showing a second more outstanding debt at the end of 2020, according to a report that was submitted to parliament this week. This increase, the report adds, “can be attributed to a shift in the position of the entire jurisprudence on prescription-related issues, the position taken by AT, which today peacefully, with the understanding of the long-term effect of interrupting a prescription, generates fewer prescribed debts.” AT stresses that, therefore, since these are debts of a certain age and therefore are difficult to recover, they, after exhausting all legal attempts to recover them, will end up in processes declared unfulfilled.
