Rising interest rates will lead to an increase in bad debts.
Learn about the new measures for SMEs that can help you fight late payments.
Many companies can no longer stay afloat and are sinking. First there was the Covid-19 pandemic, then the repercussions of the war between Russia and Ukraine (increased inflation and energy prices) and to top it all off, interest rates are rising rapidly .
In this context, bankruptcies djibouti email list are going wild during this last quarter of the year and are up 30% compared to the same period last year. Although this is also due, in part, to the fact that the bankruptcy moratorium ended on 1 September .
Among the companies most affected by this avalanche of bankruptcy proceedings are mainly SMEs .
Furthermore, the outlook for the future is not very promising, as rising interest rates may cause large companies to seek financing by extending their payment terms . This reduces the liquidity of their suppliers and forces them to finance their working capital at high interest rates.
Bankruptcy proceedings have increased by 30% compared to the same period last year.
Rising interest rates will suffocate many companies
The rise in interest rates means that the financial costs of many companies with loans at variable interest rates could become so expensive that they could end up suffocating.
The increase in the Euribor , as reflected in the following table, is more than worrying and will undermine the solvency of SMEs and individuals with mortgages and loans contracted at variable interest rates referenced to the Euribor.
A company that takes November as a reference for its interest rate review will see this increase by 3.315 points. This means that if a company has a loan at Euribor + 2, the interest rate will go from 1.5% to 4.875% with a rounding of 0.125. This means that the financial cost of its loans would triple.
Measures to address late payments
These measures are included in article 76 of the Draft Law on the General State Budget for 2023. This article seeks to harmonize with the Community Directive and jurisprudence in cases of modification of the tax base , when the debtor is declared bankrupt, or when the credit is declared uncollectible, for VAT purposes.
With the entry into force of these General Budgets, article 80 of Law 37/1992 will be modified in the following points:
The limit on the amount of transactions that did not oblige the Tax Agency to refund VAT in the event of non-payment is reduced. The taxable base limit is reduced from 300 to 50 euros . Therefore, SMEs will be able to request a VAT refund on transactions that do not exceed 50 euros of taxable base.
The formal requirements for requesting a VAT refund are reduced . Since Law 37/1992 on VAT requires that the taxpayer has requested payment by means of a legal claim against the debtor. However, with the entry into force of the General Budget, it will be sufficient to be able to prove the claim by any means that reliably proves the claim for payment . Even when it comes to credits guaranteed by public entities. When it comes to installment transactions, it will be sufficient to request payment during one of the periods to proceed with the modification of the taxable base of the invoice that allows the refund of unpaid VAT in the proportion that corresponds to the unpaid period or periods.
