Seasonal Businesses: Off-Season Obligations, Closing and Reopening Correctly

Temporary Closure or Cessation of Activity: A Costly Difference

Closing your business doors for winter does not mean you have formally ceased business activity. For the tax authority and e-EFKA, the business remains active, along with its obligations: social insurance contributions, VAT returns (even nil returns) and bookkeeping.

Cessation of activity is declared when a business permanently stops operating and is completed digitally through the myAADE platform. The declaration must be submitted within 30 days of the actual cessation date; otherwise it is late and the penalties under the Tax Procedure Code apply. If you are considering cessation and restarting every season, seek an individual assessment first, because this may affect your insurance, VAT return frequency and special regimes for new businesses.

What Continues in the Off-Season

As long as the business remains active, the following obligations continue in the off-season:

• VAT returns: submitted for every tax period, even if there were no sales, with a nil result where there is no activity. Frequency depends on the bookkeeping category and business start date. Under recent regulations, new businesses (starting from 1 April 2025) submit VAT returns monthly, while certain businesses with single-entry books also file monthly. Check with your accountant which period applies to your business.
• myDATA transmissions: winter expense documents (electricity, rent, accounting services) are transmitted and classified as usual.
• e-EFKA contributions: monthly contributions for owners and self-employed people continue while the business remains active.
• Rent and fixed expenses: continue to burden the business and, to be deductible, rent must be settled by electronic payment.
• Accounting monitoring: books are updated as usual, including periods without transactions.

Seasonal Staff: End of Contracts, Bonuses and Rehiring

The end of the season also ends employment for much of the staff. Proper management includes:

• Ending seasonal contracts and updating the ERGANI II digital system within the prescribed deadlines
• Final payroll with an APD declaration and contributions for the last month worked
• Settlement of accrued employee entitlements, including unused leave and proportional holiday bonuses and leave allowance, based on the days actually worked
• Noting that seasonal workers may, subject to conditions, qualify for a special unemployment benefit from DYPA, which makes correct and timely reporting of the contract end important for them too

For the next season, the hiring declaration for every employee, including those employed last year, must be submitted before work begins.

Taxation Is Annual, Not Seasonal

Income tax is calculated annually, not per season. Profits from operating months and expenses from off-season months are offset within the same tax year, so correct recording and documentation of winter expenses reduces the final taxable result. Sole proprietorships are also subject to minimum presumed profit rules, so very low reported activity does not automatically lead to correspondingly low tax. Finally, advance tax is calculated on the previous year’s profit, meaning a good season creates an increased obligation even if the next year proves weaker.

If losses arise, also consider carrying losses forward to subsequent tax years.

An Example: A Restaurant Operating for Six Months

Assume an IKE operates a restaurant from April to October and remains closed for five months, from November to March.

• Seasonal profit before off-season expenses: €60,000
• Off-season expenses: rent of €1,000 per month and other fixed costs (electricity, accounting, contributions) of €500 per month, giving €1,500 × 5 months = €7,500
• Taxable profit: €60,000 − €7,500 = €52,500
• Tax at 22%: €52,500 × 22% = €11,550
• Advance tax at 80%: €11,550 × 80% = €9,240
• Total amount to budget for: €11,550 + €9,240 = €20,790

The business must therefore reserve from seasonal revenue not only winter expenses (€7,500), but also a substantial amount of tax and advance tax payable after filing the return, usually during the next season. If rent had been paid in cash, that amount would not be tax-deductible and the tax would be higher. The amounts are illustrative.

Checklist: At Season-End, During the Off-Season and Before Reopening

For overall annual planning, see year-end tax planning 2026.

The Most Common Mistakes

1. Assuming winter closure is equivalent to cessation of activity and stopping return submissions
2. Omitting nil VAT returns during months without activity
3. Paying rent and suppliers in cash, making the expense non-deductible
4. Submitting cessation of activity late when the business stops permanently
5. Failing to report seasonal contract endings promptly in ERGANI II
6. Not budgeting liquidity for tax and advance tax due after year-end
7. Opening the season without checking POS and FIM interconnection