Loan for repayment – how to pay back the arrears?

March 19, 2019 From January 2018, all ongoing entrepreneurs’ contributions to ZUS are first transferred to cover existing arrears. This means that entrepreneurs in debt with ZUS will not receive sickness, care or maternity benefits. Arrears in ZUS are also associated with the costs of reminders and interest for delay and the possibility of seizing the bank account of property enforcement. How to pay back arrears in ZUS and US and what company will grant credit to tax debtors? 

Loan for repayment to ZUS and Tax Office – where to find one

Many banks offer loans for business development, but some of them require a certain period of the company’s activity on the market (from 6 to 24 months) and above all a certain creditworthiness. One of the basic conditions for granting a loan is the presentation of a declaration of no arrears to ZUS and Tax Office. Otherwise, the only option may be a loan for those in debt to non-bank institutions. Entrepreneurs struggling with tax debts can apply for:

• loans for companies without certificates – some banks do not require ZUS certificates at the initial stage of the loan process, and only after starting financing,
• earmarked loan for the repayment of ZUS (Social Insurance Institution) – money is immediately transferred to the account of ZUS and Tax Office to activate the remaining part of financing – the entrepreneur will have to present a certificate of settlement of arrears,
• non-bank loans to companies.

Non-bank loans for companies are characterized by a reduction of formalities to a minimum, a quick application process and less restrictive conditions for granting. Some institutions offer special loans to pay tax arrears or for companies with short experience as well as loans without BIK. Due to the high credit risk, it may be necessary to establish a pledge. If the company has valuable property but is not able to credit it, a mortgage for companies may be a good solution.

What is the risk of debt in ZUS?

In the first half of 2018, over half a million Polish companies were indebted to ZUS for the amount of about PLN 3.5 billion. At the same time, the Social Security Office deducted PLN 2.8 billion from current payments to cover overdue debts. Small businesses and entrepreneurs running a sole proprietorship have the biggest problems with regulating contributions 1. Timely payment of the ZUS contribution is to be facilitated by projects such as the start discount or Small ZUS, which came into force on January 1, 2019. He introduced lower social security contributions for companies whose monthly revenues do not exceed 2.5 times the amount of the minimum wage. Despite these reliefs, many entrepreneurs are still struggling with high debts to ZUS and US.

Debt at ZUS can have serious consequences. These include:

• the need to pay penalty interest and additional ZUS fees,
• no chance for the debtor to receive a loan and business financing,
• no possibility to participate in tenders,
• creditors submitting an application for a compulsory entry in the mortgage in the land and mortgage register of a property belonging to the entrepreneur,
• attachment of bank account and assets of indebted entrepreneur,
• entering the company in the register of debtors.

After the changes to the Social Insurance Act, all new payments from the Social Insurance Institution will be automatically transferred to cover old debts. This means that despite paying the premium, the entrepreneur will still be listed as being in debt. Apart from the lack of chance for the debtor to receive sickness or maternity allowance, he will not be able to count on the statute of limitations on the debt. In certain cases, ZUS may even require an indebted company to pay ZUS contributions for its employees 2.

How to check your debt with ZUS?

ZUS and the Tax Office do not inform about arrears and do not calculate the amount of interest. For this reason, entrepreneurs should regularly monitor the financial situation of their company. The Social Insurance Institution may donate payment of overdue interest if it does not exceed PLN 6.60. Higher debt with ZUS may result in entering the company’s real estate in the mortgage register and transferring the company’s data to the Register of Insolvent Debtors (from July the National Register of Debtors). Information about the status of tax settlements can be obtained at the company’s stationary unit or by checking this information via the ZUS Electronic Services Platform (PUE).

A way to protect against arrears is by regularly downloading the BIK report in the My Business offer and activating the BIK Alerts service for companies. The service will send us automatic notifications about entering our company in the register of debtors or delays in settling the company’s financial obligations. By purchasing the BIK Alert service about a contractor, we can also control the solvency of the companies we work with. The company’s debt is also worth checking in KRD and BIG debtors’ databases.

How to repay arrears in ZUS?

People who do not have money to pay ZUS or already have overdue ZUS interest should contact a Social Security Institution advisor who will help them get out of trouble and stop enforcement proceedings. Debtors have the chance to spread the debt into installments, write off contributions or postpone the payment date 3. The reductions can be used by: entrepreneurs and former entrepreneurs, heirs, third parties and legal successors to whom responsibility for unpaid contributions has been transferred; spouses responsible for joint debt for the spouse’s contributions and entrepreneur’s proxies responsible for his debt.

• Spreading the debt into installments – at the debtor’s request. It allows you to pay overdue contributions at a time convenient for the debtor and suspends enforcement proceedings against us. After submitting the application, no more interest will be charged, only a renewal fee of 50%. the default interest rate applicable on the day of signing the contract. If, while using the relief, the financial situation of the debtor changes significantly, it is possible to change the amount and date of repayment of the installments of the liability. If we do not comply with the terms of the contract, it will be terminated and we will have to pay off the contractual obligations immediately.
• Deferral of the premium payment date – is an option for people who have encountered temporary financial problems and do not have the means to settle the premium. The application can be submitted no later than on the day of the payment of contributions, after which a new payment date will be set. If ZUS refuses to postpone, we will have to pay the premiums due, together with default interest accrued up to and including payment. During the deferral interest will not be charged, only the extension fee.
• ZUS contributions cancellation – the so-called ZUS can be abolished only if the debt is completely uncollectible. The application must be supported by evidence confirming the extremely poor financial and family situation of the debtor and the total lack of funds for repayment. The reason for cancellation of debt may be, for example, the death of a debtor who has not left behind any assets or heirs or dismissal / cancellation by the court of the debtor’s petition for bankruptcy. If ZUS refuses to cancel it, we must repay the debt together with default interest accrued up to and including the payment date.

If ZUS has already started enforcement against us, in certain situations we can take advantage of the relief under enforcement proceedings. As part of it, we can apply for suspension of enforcement proceedings, release of property components from execution, making withdrawals from bank accounts, or setting aside enforcement actions. The reason for using the discount may be, among others difficult financial situation or difficulties in doing business. If we have deliberately avoided paying premiums for a long time, we have little chance of taking advantage of the discounts.