Which debts are covered?
Taxes due by 31 December 2015 which should have been paid by 31 May2016 are included. Outstanding contributions to Social Security are also eligible over the same period. Taxpayers can join the programme as of 3 November. The programme closes on 20 December 2016.

How to register?
Registration is available online on the Finanças Portal or at Social Security Direct. Individual taxpayers or businesses have to decide whether to make a one-off settlement or pay in instalments (up to a maximum of 150 months). In the case of Social Security, the application form will have an associated simulator so that the taxpayer can estimate the amount due. Adherence to the programme is only finalised with full payment of the debt or the payment of the initial 8% instalment (depending on the option selected) by 30 December 2016.

What are the advantages of a one-off settlement?
Those who pay their entire debt by the end of the year are exempted from default interest, compensatory interest and costs of the fiscal execution procedure. In addition, the taxpayer has a 10% reduction of the fines associated with the breach of duty payment of taxes or contributions.
What are the benefits to those paying in instalments?
Payments can be made in up to 150 monthly instalments (over 12½ years). To adhere to this method, the taxpayer must pay at least 8% of the debt by 20 December 2016 to the Tax Authorities and by 30 December in the case of Social Security. Interest and costs will be reduced by 10% for payments 73-150; 50% for those who choose from 37 to 72 instalments; and 80% for those who liquidate the debt in 36 monthly instalments. The minimum amount of each monthly instalment ranges from €102 for individuals and €205 for companies. Taxpayers with payment plans already underway may also join, provided that they meet the requirements. In this instance, the amounts due will be recalculated, taking into account the reduction in interest rates and the costs associated with the plan.

How much income does the State hope to raise?
The Government expects an annual increment of €100 million from the Special Debt Reduction Programme. This calculation relates only the income tax part scheme. There are as yet no estimates from Social Security.

Dennis Swing Greene is chairman and International Tax Consultant for euroFINESCOs.a. www.eurofinesco.com