“LIQUIDITY” DECREE – URGENT MEASURES TO SUPPORT BUSINESSES

Overview

Decree-Law No. 23 of 8 April 2020 (the so-called “Liquidity” Decree), was published in the Official Journal N0. 94 on 8 April 2020 and simultaneously went into effect on 8 April 2020. It must be converted into law by 7 June 2020, and it could, therefore, be subject to changes and additions.

The decree provides for a set of measures to ensure liquidity flows to business and the operation of the same. More specifically, the decree provides for:

  • liquidity-support measures, with enhancements to the Guarantee Fund for SMEs and the introduction of a SACE guarantee to cover bank loans granted to large businesses and SMEs that have used up their capacity to tap the Guarantee Fund;
  • fiscal measures, that provide, inter alia, for a further suspension of the payments of taxes and social welfare contributions;
  • measures to ensure businesses can continue to operate as going concerns, through a package of provisions that have an impact on business law and insolvency law, as well as a one-year postponement of the date on which the Code do Businesses in Crisis and Insolvency goes into effect;
  • enhancements to the rules for the special powers in sectors of strategic importance, within the sphere of the application of the “Golden Powers” extended to all sectors deemed to be of strategic importance.

As regards the extension of tax and social welfare contributions due on 16 April and 16 May 2020 and the remittance in terms of payment due on 20 March 2020, please see our previous Tax Alert (“Liquidity” Decree – Extension of the payments of taxes and social welfare contributions).

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