Published: April 8th, 2020 at 10:10 AM PST | Updated: April 27th, 2020 at 12:39 PM PST
Please note: The information in this article continues to quickly evolve. We will provide updates as frequently as possible. However, all information is provided “as is,” with no guarantee of completeness, accuracy, or timeliness.
In response to the economic downfall triggered by the coronavirus (COVID-19) threat, countries around the world are introducing emergency tax measures. These measures intend to provide tax relief to the most affected people and companies, as well as foster liquidity of businesses and households.
The following countries implemented or plan to implement tax relief for businesses and persons affected by the COVID-19 pandemic:
Australia announced federal relief proposals adding up to around $320 billion (AUD). State governments also announced relief packages and, in some cases, payroll tax payments deferrals.
The federal relief package includes direct payments to citizens. Job seekers impacted by the downturn, will receive payments of $550 every two weeks in addition to current income support payments. There is also a broad-based, $750 one-time payment to eligible recipients. Individuals will also be able to temporarily access up to $10,000 from certain retirement accounts.
By way of a new wage-subsidy scheme, employers will be able to receive a $1,500 payment per retained worker every two weeks. In order to qualify for the subsidy, the business must have seen revenues fall by 30% (50% for businesses with revenues greater than $1 billion) compared to the same time period during the year prior. This program will be in place for six months.
The aid packages provide relief to businesses through subsidized loans and central bank lending, and temporary relief from insolvency laws, immediate expensing (instant asset write-off) and accelerated depreciation.
Immediate expensing is now available for assets costing less than $150,000 on a per-asset class basis. They expanded eligibility to include businesses with annual revenues of less than $500 million (the current cap is $50 million). This measure applies until the end of June.
Accelerated depreciation will be provided temporarily for businesses with less than $500 million in revenues. In addition to current depreciation deductions, the policy allows an additional 50% deduction but only applies to assets purchased after March 12, 2020 and put into service by June 30, 2021.
Businesses subject to the Goods and Services Tax (GST) can apply for deferred payments if they face cash-flow challenges. Furthermore, businesses that receive credits or refunds under the GST can switch from quarterly to monthly filings to speed up their refunds. Importers may also apply for the deferred GST scheme.
Austria reduced income and corporate tax prepayments, deferred tax payments, allowed taxes to be paid in installments, reduced or provided relief from late tax payments, and suspended tax audits. Businesses with reduced working hours can receive labor subsidies. Additional direct aid is available for sole proprietorships and family-owned businesses, as well as the tourism and cultural sectors.
For corporate tax payments, taxpayers can apply to have their advance payments reduced to zero or to receive a payment deferral or an installment plan. The application process is open until October 31, 2020.
Taxpayers may defer value-added tax (VAT) payments on a case-by-case basis, and payments are not necessary while an application for deferral is pending with the tax authorities. The government also delayed the VAT payment due on June 30, 2020 until August 31. They also temporarily eliminated VAT on protective masks (currently taxed at the standard VAT of 20%).
Belgium adopted several measures to delay tax payments. The government extended the corporate and income tax payment deadlines for an additional two months. There is also relief available for late payments for tax liabilities prior to March 12. Additionally, businesses that demonstrate payment difficulties linked to the COVID-19 outbreak may receive a VAT payment plan that offers relief from penalties. A similar payment plan is available for payroll tax liabilities.
Belgium authorities also delayed VAT filings by two weeks and payments by two months. They also extended the April VAT returns payment deadline from April 15 to July 15. Businesses in good standing may receive early refunds from February’s tax filing by April 30. In addition, businesses will benefit from an increased tax credit for prepayments made in Q3 and Q4 of 2020 for the assessment year 2021, provided there is no dividend distribution between March 12 and December 31, 2020, and there is no capital reduction or repurchase of shares.
The finance ministry introduced a 75% wage subsidy to employers for up to 12 weeks if they saw revenues drop by at least 15% compared to the same month last year (or compared to the average revenue for January and February 2020. The subsidy applies to the first $58,700 (up to $847 per week) of an employee’s salary. This subsidy will co-exist with a previously introduced wage subsidy for eligible small businesses worth 10% of remuneration over three months.
Canada provided a relief package that includes boosting its health system and offering direct support to households and businesses. Federal Goods and Services Tax (GST) filings and payments due in March-May are postponed until June 30.
The Chilean government announced a 350 million Chilean UF stimulus plan. President Pinera outlined a number of tax measures in response to the coronavirus outbreak. The monthly provisional payments of corporate income taxes are suspended until June 30, and payments for VAT and income taxes have been postponed until June 30 for companies with annual sales of less than 350,000 UF. Qualifying small and mid-sized businesses received an early tax refund in April. Furthermore, the government postponed April’s tax payments for individuals with properties assessed at less than 4 million UF.
Finally, qualifying businesses can carry their 2020 losses forward for eight years (this is up from the typical five years).
The Czech Republic waived penalties and default interest for income tax payments until July 1. Late filing waivers for all taxes will be on a case-by-case basis. There is also a general waive of VAT statement penalties.
Businesses may apply to cancel income tax prepayments, defer tax payments (for VAT or income tax), or extend their filing deadline for corporate income tax returns. In addition, payroll tax and labor market contributions payment deadlines in April through June are extended for four months. For example, if a business’ original deadline was July 10, it is now November 10. Also, taxpayers may carry losses incurred in 2020 back for two years (previously there were no loss carrybacks).
The government announced a new package that includes wage-subsidies for employees under quarantine, if a business closed due to government order, or if a business experiences other coronavirus-related economic difficulties. It also includes new loans and loan guarantees.
In addition, workers ordered to go home will receive 90% wage support for three months. The government will also cover sick leave costs from the first day of leave.
Businesses with an annual revenue of less than DKK 5 million that paid VAT for the second half of 2019 in March 2020 and businesses with an annual revenue between DKK 5 million and DKK 50 million that paid VAT for Q4 2019 in March 2020 may be refunded their VAT payment as an interest-free loan. VAT-exempted businesses subject to payroll tax under the so-called “method 4” (e.g., passenger transport companies, dentists, and doctors) that paid payroll tax for Q1 2020 no later than April 15 may also have the amount of tax returned to them as a loan. In total, the interest-free loans may amount to DKK 35 billion and must be repaid by April 2021.
R&D credit payments for loss-making businesses are being advanced so that 2019 tax credits will be paid in June 2020 instead of in November 2020.
Estonia suspended interest penalties on late corporate tax payments until the end of the virus-related state of emergency (a rate of 0.03% per day, down from today’s 0.06% per day, will apply after they lift the state of emergency). VAT payments are not due until May 1.
Between March and May, there will be no minimum monthly base for employers’ social tax (minimum monthly base is currently at €540). There is a 70% wage-subsidy (capped at €1,000 per month). The country also decided to reduce excise duties on diesel, electricity, and natural gas.
In addition, the EU waived VAT on imports of medical equipment including testing kits, protective equipment, and ventilators.
They also provided a temporary framework for state aid measures. Member countries providing specific support to businesses and sectors have temporary flexibility for targeted measures relative to the state aid rules that would otherwise apply.
Finland delayed corporate income tax payments. The government is supporting loan guarantees for small and medium-sized businesses. They reduced the interest rate for late business tax payments from 7% to 4%, and delayed and reduced private-sector pension payments.
The country also introduced VAT loans, enabling businesses to apply for a temporary refund of VAT payments made on their returns in 2020. The interest rate for these loans is 3%.
The country also bankrolled a €1 billion solidarity fund for affected businesses. In total, France has deployed a €45 billion relief package with an additional €300 billion in loan guarantees.
Germany will make it easier for companies to claim subsidies to support workers on reduced working hours to counter the effects of the pandemic. This is the same measure used to help prevent large-scale layoffs during the 2008 financial crisis.
Tax measures include broad deferral options and tax base reductions for trade taxes. Deferrals will be granted without interest, but taxpayers must apply before December 31, 2020. Also, the government waived late payment penalties through the end of 2020, and delayed advance payments for income and corporate taxes until June 10. Trade tax advance payments were delayed until May 15. Finally, they extended the 2019 annual VAT return deadline to May 31.
The government also discussed reforming the solidarity tax (a 5.5% surcharge on high-income earners) so that it may apply in 2020 rather than in 2021 as previously planned.
Germany is providing up to €50 billion in support for self-employed and small and medium-sized businesses, and up to €500 billion in liquidity measures for affected businesses.
The labor agency will cover 100% of social security contributions for lost hours of short-time employees. In addition, the country temporarily reduced VAT for catering food services from 19% to 7% during the period of July 1, 2020 through July 1, 2021.
Greece suspended VAT payments due at the end of March for four months, and VAT for businesses affected by coronavirus until August 31. Companies’ social security contributions will be suspended until June 30. They reduced VAT from 24% to 6% for products related to preventing the spread of COVID-19. In addition, the sales list filings for 2019 have been delayed until June 30.
On March 30, Greece passed legislation to reduce assess liabilities with tax payment deadlines between March 30 and April 30, by 25%. The bill also allows for advance tax payment refunds and gives VAT exemption for donations made to the government in support of relief efforts. Greece allowed VAT payers to withhold 25% of their VAT due in April if they did not lay off employees. The country also extended both the deadline for tax debt payments, with a corporate deduction of 25% of the tax debt owed for businesses affected by the pandemic, as well as the deadline for employers’ social security contributions to April 21. Qualifying businesses affected by the coronavirus that meet their 2020 first trimester VAT obligations may offset 25% of their VAT paid against tax debt or repayment scheme installments due from May 1 and beyond.
Hungary provided relief for social security contributions. Employers will not be required to pay the employer side of social security contributions from March through June. In addition, employees will only be liable for their 4% health-care contribution rather than the typical 18.5% total social security contribution. The 2020 projected budget deficit increased from 1% to 2.7% of GDP. In addition, the country suspended the media tax and is funding more than HUF 2 trillion in loans for businesses.
The country also extended the deadlines for certain taxes, including corporate income tax, “Robin Hood tax,” local business tax, innovation contribution, and small business tax, to September 30. As of July 1, the social tax will be reduced from 17.5% to 15.5%. Hungary also accelerated VAT refunds for small and medium-sized businesses so businesses may receive refunds within 30 days from the filing date (a decrease from the typical 75 days).
On May 1, 2020, Hungary announced a COVID-19 emergency bank tax. This is a one-time charge in addition to the existing banking tax. As of May 1, Hungary implemented a retail turnover tax on e-commerce levied in scale from 0.0% to 2.5% depending on the retailer’s annual sales.
Iceland postponed payment deadlines for social security taxes and public levies. Furthermore, the government delayed taxes originally due on March 16 to April 15, and then further delayed them until May 15. No penalty or surcharge will apply if the payments were made by May 15.
Companies may apply to postpone their VAT payments until 2021. Also, the government will give 100% VAT refunds through December 31 for the building sector.
The country also expanded unemployment benefits to include part-time employees. On March 30, they passed legislation allowing employers to postpone deadlines for up to three payments of social security tax and withheld public levies at source in the period of March 1 through December 1 to the new deadline of January 15, 2021. In addition, the legislation permits businesses to postpone real estate taxes up to three payments. Finally, the government suspended the bed-night tax on overnight stays from April 1, 2020 through December 31, 2021.
India provided a fiscal support package of 150 billion rupees, with the primary focus being the health system’s response to the outbreak. They also announced state level fiscal support and the postponement of tax filings from March 31 to June 30 for income tax returns. In addition, they reduced the interest rate for tax payments made by June 30 and waived late filing penalties. Goods and services tax (GST) deadlines for March, April, and May are due at the end of June.
Furthermore, the country is working on a relief package for the airline industry including deferring aviation fuel tax. They will also accelerate refunds for the Goods and Services Tax (GST) and customs duties, as well as companies’ income tax refunds up to INR 500,000. The country extended the deadline for FATCA and CRS returns from May 31 to June 30. India also extended the deadline for March’s provident fund contributions from April 16 to May 15.
Indonesia waived income tax for individuals in the manufacturing sector with income below 200 million rupiah for six months. In addition, they extended the deadline for tax amnesty program submissions until April 30. A second stimulus package will allow firms to delay corporate and income tax payments on the sale of imported goods. These measures went into effect April 1st and will last for six months. Also, to encourage tourism to certain destinations, the government will lift a 10% hotel and restaurant local tax for six months and compensate local governments for the expense. In addition, qualifying businesses in the manufacturing sector and other export-oriented companies will receive advanced VAT refunds from April to September’s tax period, as well as a 30% reduction of corporate income tax installments. The total stimulus package totals to 33.2 trillion rupiah.
In conjunction with the above measures, the country will cut the corporate income tax rate from 25% to 22% for the 2020 and 2021 tax years, and to 20% beginning in the 2022 tax year. They lowered stock exchange tariffs to 3%, and deferred import tax payments for six months for certain businesses. Finally, the country will impose VAT, income tax, and transaction tax on electronic financial transactions on nonresidents.
In Iran, employees can defer tax payments for the next three months and the 3 million poorest Iranians will receive an additional cash subsidy. There will be additional tax relief for small to medium-sized enterprises. They postponed the 2019 fourth quarter VAT returns to April 19 and qualifying businesses may apply to extend the deadline further to May 20. The country also announced a support package worth approximately 10% of GDP in response to the ongoing pandemic.
Ireland instituted a broad relief program amounting to €6.8 billion. The program includes waiving interest on late tax payments and suspending relevant contracts tax. For small and medium-sized businesses, interest on late payments of January-February VAT and February-April Pay-As-You-Earn liabilities are suspended until further notice; returns must still be filed on time, though returns you must still file returns on time. The relief program also entails broad lending authority and specific relief for temporary layoffs. Employers who temporarily lay off or reduce the hours of their employees due to the crisis will be eligible for a refund of €410 per week for up to 12 weeks. The government is also providing sick pay of €350 per week for two weeks for qualifying individuals. Unemployment benefits expanded from €203 per week to €350 per week for individuals who have lost their jobs due to the pandemic. Affected business may defer their rates payments until May 31.
Israel allocated NIS 80 billion in response to the COVID-19 crisis. Of that, NIS 41 billion will go toward guaranteed loans, grants and other measures for small and medium-sized businesses. The government also expanded unemployment benefits by waiving certain requirements.
Israel delayed VAT payments for 10 days for monthly filers and 12 days for bi-monthly filers. They also extended the deadline for online income tax filing and payments to July 30 and offline to June 30. In addition, Parliament approved an NIS 500 grant for families with children, the elderly, and people with disabilities.
In Italy, they extended tax deadlines for residents and companies in the so-called “red areas” of the country. Also, all tax payments related to social security contributions, assessment, income, and wealth due between February 23 and April 30 were extended until May 31, and companies that suffer a 25% drop in revenues will receive tax credits. In addition, businesses earn a 50% tax credit for sanitation expenses, such as daily cleaning services, masks, and other precautions that help stop the spread of new coronavirus. Finally, banks received options to take some loss deductions and convert them to tax credits.
On March 16, Italy announced a €25 billion relief package. This includes €10.3 billion for unemployment benefits and assisting the self-employed with a €600 allowance for the month of March. The package also allows parents to claim €600 for babysitting costs, or apply to extend parental leave for 12 days. Finally €3.2 billion covers hiring an additional 1,000 doctors.
Italy also announced that April-May VAT returns may be delayed until June 30 for businesses with a decline in revenue since March, specifically small businesses with at least a 33% decline and large businesses with at least a 50% decline. As of April 8, those same businesses may also defer payments of VAT, social security and welfare contributions, and withholding tax on wages and salaries until June 30.
The country also suspended loan repayments by small and medium-sized businesses through September 30. Employees who continue to work at this workplace during the pandemic will receive a bonus of €100. Furthermore, businesses will receive a 60% tax credit on commercial rents. Finally, they delayed the mandatory use of the Italian Revenue Agency’s e-invoicing platform from October 1 to December 31.
Japan instituted a one year delay on national tax payments of corporate and individual taxpayers with payment deadlines between February 1, 2020 and January 31, 2021, if the taxpayer’s revenue decreased by 20% compared to the previous year. Japan also provides relief to companies whose sales have decreased at least 50% for a one-month or longer period by permitting the cancellation of taxable company status for consumption tax purposes. Altogether, the country has allocated ¥108.2 trillion in response to the health crisis and extended the filing and payment deadline for income tax, gift tax, and consumption tax for the self-employed from mid-March to mid-April. Businesses with stated capital of ¥1 billion or less can claim a tax refund for tax-loss carrybacks.
Latvia extended the VAT reclaim deadline for non-EU countries, from June 30 to the end of September. They also granted tax delays including VAT payments to provide relief for businesses, which also must apply to delay their taxes until June 30. Businesses with a decrease in income due to the coronavirus that qualify can have tax payments deferred or staggered for up to three years, and the government will cover 75% of salaries of workers experiencing downtime because of the coronavirus from March 14-May 14.
The country’s support package comes out to about €2 billion. They also accelerated VAT refunds from the end of the tax year to within 30 days after the due date. The government will pay for sick leave from March 22-June 30.
Lithuania delayed the corporate tax and filing deadline until March 30. Businesses can revise their corporate income tax calculations based on projections for 2020 rather than the previous year’s results. Personal taxes have also been delayed from May 4 to July 1. VAT payers can defer returns for up to one year with no interest or penalty. VAT payers affected by the coronavirus may apply to write off all outstanding VAT.
In addition, the country will provide a wage subsidy of at least 60% of salary to support workers who have experienced reduced hours. The subsidy can reach up to 90% for those sectors most impacted by the COVID-19 crisis.
In Luxembourg, businesses can file requests to cancel the first two quarterly tax payments for 2020 (for corporate income and municipal business taxes). In addition, there is a four-month deadline extension (for corporate income, municipal business, and corporate net wealth taxes) for all payments that were due after February 29, 2020. Businesses with financial difficulties may also postpone all VAT payments reaching back to the start of the coronavirus outbreak.
Malaysia is exempting accommodation services (including hotels) from the 6% services tax and providing sales tax exemptions and lifting import duties on equipment and machinery. Again, they extended the due dates for making installments of tax from April 15 to May 31, and deferred making monthly tax installment payments for three months for small and medium-sized businesses and six months for companies in the tourism sector. The monthly tax installment payments to accompany CP500 form for March and May 2020 can be deferred without penalties. The country also provided relief by allowing the deferment regarding estimated taxes reported on form CP204, for three months for small and medium-sized business and for six months for companies in the tourism sector. The deadline for submitting a Country-by-Country Report (CbCR) has been extended, with the new due date dependent on the original due date. Cash or in-kind donations to approved projects to address the coronavirus pandemic are tax-deductible; taxpayers may apply them against the gross business income.
Mexico delayed deadlines for lawsuits in tax courts until April 19. States including Nuevo León, Baja California, Colima, Durango, Mexico state, Jalisco, Hidalgo, Morelos, Puebla, Sonora, Quintana Roos, Zacatecas, as well as the federal district of Mexico City, provided some form of tax relief and extended the tax filing and payment deadlines. The government extended the deadline to file individual tax returns for 2019 until June 30, and allowed for the deferment of social security payments for up to 48 months and upon a 20% upfront payment for the employer quota and 100% of the worker quota with a monthly interest rate that ranges between 1.26% and 1.82%. Also, they accelerated Value-Added Tax credit repayments.
The Netherlands delayed payroll, income, and corporate tax payments along with VAT for three months. From April, the temporary deferral policy applies to tax on games of chance, insurance premium tax, the landlord levy, environmental taxes, coal tax, waste tax, tax on tap water, excuse duties (on mineral oils, alcohol, and tobacco), and the consumption tax on non-alcoholic drinks. In addition, the government reduced the interest cost of late payments to 0.01%. From April 25, requests for a deferral of payment of longer than three months can be granted subject to certain conditions. These businesses will not be assessed with a default penalty (for a late tax payment) during the period beginning March 12 through the date when the granted tax payment deferral ends. When companies receive and pay the preliminary tax assessment 2020 (CIT) and expect lower profits in 2020, they can amend the preliminary tax assessment and receive a refund for the paid taxes.
In addition, VAT will not apply on the supply of medical staff for designated medical facilities. VAT is not required to be paid on medical supplies (relief supplies and equipment) that are provided free to health-care institutions, care facilities, and general practitioners.
Furthermore, the government will provide support for businesses that see a 20% reduction in revenues, at 90% of wage costs. There is also a €4,000 compensation payment available to businesses forced to close temporarily, and an expansion of government guarantees for loans to small and medium-sized businesses.
As a means to encourage investment, New Zealand announced the reintroduction of depreciation deductions for commercial and industrial buildings. In addition, they increased the threshold for payment of provisional tax to NZ $5,000 (US $2,850) to reduce cash-flow pressure on small firms. Taxpayers can also choose to receive refunds for research and development (R&D) tax credits one year early. The authorities suspended fines and late filing penalties of Goods and Services Tax (GST). Also a tax loss “carryback” rule will allow refunds of tax paid in a prior year. The rule will apply temporarily for tax losses in the 2020 and 2021 tax years and become permanent for future years. Tax losses can also be carried forward to help companies raise capital. The carryback and carryforward rules apply to all businesses, not just small and medium-sizes ones.
The country also approved two loan schemes to provide businesses with additional funding. Medium and larger business may receive loans of up to NZ $500,000 through retail banks. Then on May 1, New Zealand introduced a cash-flow loan scheme for small businesses (defined as 50 or fewer full-time employees) for up to NZ $100,000. The loan amount equals $10,000 per applicant plus NZ $1,800 per full-time employee. These loans are interest-free if they the recipients repay them within one year, and they are subject to 3% interest if repayment takes longer than one year. The maximum term is five years.
Norway implemented a number of measures. The government reduced the employee tax rate by 4 points for two months. Corporations may deduct losses in 2020 to reduce tax payments in the two previous years. The government temporarily lowered the VAT rate from 12% to 7%, and this change is retroactive to January 1. From April 1 to October 31, a 6% rate will apply. Tax payments for VAT and advanced payments for other businesses will be postponed. The first VAT return payments are deferred from April 10 to June 10. Net wealth tax payments will be reduced for those who own stock in loss-making companies. The tax on air passenger flights is suspended from January 1 to October 31, 2020. Finally, they extended the deadline for filing corporate income tax returns for 2019 from May 31 to August 31.
Poland extended the deadline for the new SAF-T VAT regime from April 1 to July 1, and will allow accelerated VAT refunds. The government extended the personal income tax deadline by one month and allowed businesses to apply to defer social security contributions for three months. VAT filers can apply for a liabilities write-off or a payment deadline extension. In addition, they extended the corporate income tax filing and payment deadline to May 31. Corporate and individual taxpayers whose revenue in 2020 will be lower by 50% when compared to 2019 revenue, can offset tax losses incurred in 2020 against their 2019 taxable income, subject to a ceiling of PLN 5 million loss.
Small and medium-sized businesses with a decline in economic turnover of at least 25% in any month after February 1, 2020 are eligible for a returnable subsidy with the possibility of redemption of up to 75% after 12 months, as long as they maintain employment. Large companies will receive financing in the form of loans or bonds, and preferential financing and investment in the form of equity instruments. Nevertheless, the beneficial owner must be a Polish tax resident to receive financial aid.
Further relief comes in a PLN 212 billion relief package aimed at supporting the economy and healthcare system.
Portugal suspended social security contribution payments for companies affected by the coronavirus outbreak. Also, authorities offered businesses with less than €10 million in revenues in 2018 or a 20% reduction in revenues, the opportunity to adjust VAT and withholding tax payment schedules. February monthly VAT returns, due on April 10 were postponed to April 17 and associated tax payments were not due until April 20. Furthermore, taxpayers can delay the monthly VAT return for March and April until May 18 and June 18, respectively. There are no late filing penalties or payment interest charges. They also allowed taxpayers to defer the deadline to prepare and file the documentation adopted to comply with the transfer pricing rules until August 31, 2020.
Romania will suspend most tax audits, extended the deadline for an annual profits tax from March 25 to April 25, and sped up VAT refunds to help businesses. The government declared that taxes with deadlines after March 21 will not be subject to penalties and late-payment interest until 30 days after the end of the state of emergency.
In addition, the government approved a “discount” for taxpayers that paid their profit tax for the first quarter of 2020 (due on April 25) on time. Large businesses will receive a 5% discount while small and medium-sized businesses will receive a 10% discount.
Also, the government deferred the VAT payment at the time of import for medicines, protective equipment, other medical devices or medical equipment, and sanitary equipment used in efforts to combat the coronavirus.
Russia will allow small and medium-sized business operating in certain industries the chance to defer all taxes for six months, except for VAT and social security enterprises (only for micro-enterprises). The country provided tax holidays for taxes and social security contributions until May 1 for companies engaged in tourism and aviation industries. Also, the government reduced the social insurance rate from 30% to 15% for salaries exceeding the minimum wage. Small and medium-sized business will receive a three-month grace period for rent payments to the government. Plus, pharmaceutical and medical supplies and equipment are exempt from import duty payments. Finally, other tax measures include a 13% income tax rate on interest accrued on deposits exceeding 1 million rubles (USD $12,700).
Other measures are up for consideration. These include a review of some double tax treaties to impose a 15% tax on dividends from Russia.
To provide economic relief, Singapore deferred corporate income tax payments for April-June for three months. The self-employed received automatic deferment of their income tax payments due in May, June, and July by three months. Also, an automatic extension was implemented for filing individual income tax returns to May 31, originally due on April 18. Commercial properties affected by the coronavirus (i.e. hotels, restaurants, stores) will receive property tax rebates. Qualifying employers can receive a grant of up to 75% of their gross monthly payroll from October to December 2019, capped at SGD 4,600 per employee per month. Also the country granted a corporate income tax rebate of 25% of tax payable, capped at SGD 15,000. Companies receive an option to accelerate the tax depreciation claim for plant and machinery required for 2021 over two years: 75% of the cost in 2021 and 25% in 2022. Expenditures on renovation and refurbishment can benefit from an accelerated deduction in one year instead of over three years, as currently allowed. In addition, they waived the foreign worker levy for the month of April and granted a rebate of SGD 750 for each work permit or S-pass holder.
Finally, they extended the deadline for Goods and Services Tax (GST) due on April 11 to May 11. GST will remain at 7% in 2021, but may increase to 9% sometime between 2022 and 2025.
To provide relief for individuals, South Africa increased the Employee Tax Incentive (ETI) for those earning bellowed R6,500 by giving an increase of up to R500 per month from April 1 to July 31. The government will allow for accelerated payments of ETI reimbursements from twice-yearly to monthly. Finally, small businesses can delay 20% of pay-as-you-earn liabilities for four months.
The country waived VAT for imports of “essential goods” during the crisis. Also, from April 1 to July 31, small and medium-sized businesses can defer portions of employee taxes and provisional tax payments.
South Korea cut its VAT for small businesses by increasing the VAT registration threshold from KRW 30 million to KRW 48 million until the end of 2020, gave tax boosts for consumers replacing their cars early, and provided a new tax deduction on personal credit card spending between March 1 and June 30. Furthermore, the government extended the filing deadline for corporate tax returns from April 4 to May 4. For individual taxpayers, the government increased income deductions from March 1-June 30 and deferred VAT liability for some businesses from April 24 to July 27.
The government also approved a corporate income tax reduction for businesses in designated disaster zones connected to the COVID-19 crisis. Tax reductions for small and medium-sized businesses may be up to 60% and 30%, respectively. The reductions are limited to KRW 200 million.
Spain approved tax relief for small and medium businesses and self-employed persons. Those businesses have the ability to defer income, corporate, and VAT tax obligations for six months without interest. The country also adopted a proposal in response to the coronavirus outbreak that allocates a €100 billion line of guarantees for businesses.
Businesses with less than €600,000 in annual revenues can delay first-quarter VAT filing and payments until May 30.
Sweden is allowing businesses to reclaim tax payments made from January to March for one year and then repay them. The government will pay for sick leave for April and May, as well as delay businesses’ VAT payments and other outstanding taxes for 12 months. Finally, the country’s aid package consists of SEK 300 billion.
To fund reduced work schedules and loan programs for businesses, Switzerland adopted an aid package of CHF 42 billion. The package allows small and medium-sized businesses to receive loans of up to CFH 20 million. In addition, the government deferred businesses’ social security contribution payments interest-free and waived individuals’ VAT late penalties and interest fees through the end of 2020 (with an application). Finally, the authorities delayed the federal income tax payment.
The Swiss government also expanded the short-time work program from three to six months, waived the waiting period, and will not expect employers to contribute for the lost work.
Thailand’s cabinet cut the income withholding tax from 3% to 1.5% (from April to September). It also doubled the tax benefit for investment in long-term mutual funds to THB 412,000 (US $12,570).
In addition, the country extended the personal income tax filing deadline from June 30 to August 31, and will give direct aid (THB 5,000 per month for three months) to 3 million people. All businesses received an extension on monthly tax return submissions. Depending on the type of tax, deadlines in March or April are extended to May 15 or May 23.
Tunisia extended the corporate income tax return filing deadline to May 31, except for companies paying the 35% tax rate. Also, they suspended tax audits to May 31, accelerated VAT credit refunds (with payments coming in 1 month), and allowed companies affected by COVID-19 to postpone their tax debt for up to seven years. Finally, they postponed the circulation tax deadline to the end of April.
Turkey will give a six-month deferral on some tax and insurance premium payments to certain sectors, including retail and transportation. In regards to VAT, they extended declarations and payments from March 26 to April 28, delayed returns for April-June until June 27, and cut VAT on domestic air travel from 18% to 1%. Furthermore, they will increase minimum payouts and make early bonus payments to pensioners. Turkey also extended the personal income tax deadlines to the end of April.
In total, the country adopted a TL 100 billion fiscal package in response to the coronavirus crisis.
Due to the COVID-19 outbreak, the country will allow a two-month extension to file corporate tax returns for companies whose accounting year ends in September. Individuals will receive a tax deadline extension for VAT, PAYE, local excise duty, and withholding. More specifically, payments that due on March 15 became due March 31, and payments due on April 15 were due April 30. They also extended the deadline for annual income and asset returns for businesses until July 1, and agreed to not levy land and real estate taxes between March 1 and April 30.
Ukraine will exempt imported medicine, medical devices, and other equipment from its VAT. Furthermore, the government waived penalties and interest for late submission of the unified social tax payment or its report from March 1 until April 30. Similarly, they also waived late payment interest fees for VAT until the end of May. The Ukrainian government extended the deadline for filing personal income taxes to July 1 and payment to October 1.
The government reduced VAT on domestic electricity from 20% to 10% and agreed to not apply the tourism tax until the end of 2020.
The UK government waives business property taxes for retail, leisure, and tourism businesses for 12 months to reduce the economic impact of the coronavirus. It also paused plans to expand rules on the employment status of contractors in the private sector. These so-called “off-payroll” rules aim to ensure that contract workers pay about the same tax and social security contributions as regular private-sector employees. In addition, the UK is expanding the Universal Credit and working tax credit by £1,000 and delaying £30 billion in VAT payments until June 30. On May 1, they implemented a VAT reduction on e-books.
Self-employed taxpayers can receive up to 80% of their average earnings, limited to £2,500 per month. This should benefit 95% of the self-employed earning up to £50,000 per year who have filed a return for 2019.
The UK also delayed Phase Two of Making Tax Digital from April 1, 2020 to April 1, 2021. Therefore, businesses have another year to have accessible digital links for VAT.
Finally, the country waived import taxes on medical equipment.
The United States government adopted a short-term expansion of paid sick leave. Furthermore, the federal tax authorities delayed tax payments from April 15 to July 15 without interest or penalties. The CARES Act legislation, consisting of a $2.2 trillion stimulus package, provides a $1,200 tax rebate for individuals ($2,400 for joint filers) with an additional $500 per child. Among many tax measures for businesses, the bill includes a refundable payroll tax credit and allows employers to delay paying Social Security payroll taxes, with half of the payment due December 31, 2021 and the rest due December 31, 2022. Also, the bill provides for the distribution of $150 billion in relief funds to the states.
In addition, the US increased unemployment insurance payments and extended $450 billion in forgivable loans to support payroll costs for small businesses.
Disclaimer: This material has been prepared for informational purposes only, and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional tax planner or financial planner. All information is provided “as is,” with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information.
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