Corona: Tax relief measures for businesses

LucaNet AG, |Corona
covid-19 and tax relief

Due to the current corona crisis, the topic of liquidity planning has come to the forefront for all companies affected. A great deal has been written and reported in recent weeks about the tax measures taken worldwide to support companies and the economy in general. But what are other countries doing to relieve companies in terms of liquidity? What measures on an administrative level are being taken in the realm of taxes?

We have compiled a list of the measures taken in countries where LucaNet also conducts business operations. We have put together this list to the best of our knowledge on the basis of available information at the time of writing. As such, we make no claim to completeness with this list. This list serves the purpose of providing a rough overview of the various types of measures taken (and their relevant scopes), and is for information purposes only.

Changes to tax regulations due to Corona in ...

Great Britain

  • VAT payments due in the period of three months from March 20, 2020 are deferred until March 31, 2021
  • Instalments or deferrals are granted for the payment of wage and corporate income taxes on a case-by-case basis, usually for at least two months
  • Deferred tax amounts that arise due to COVID-19 are not subject to interest or penalties.
  • The planned reduction of the corporate income tax rate from 19 percent to 17 percent has been postponed for the time being

Singapore

  • Deferment of corporate and personal income tax payments for three months.
  • Qualifying commercial properties that have been more badly affected by the COVID-19 outbreak, including hotels, serviced flats, tourist attractions, shops, and restaurants, will pay no Property Tax.
  • Maximum number of YAs to which the qualifying deductions may be carried back will be increased from one YA to three YAs.
  • Government will co-fund between 25% to 75% of the first $4,600 of gross monthly wages paid to each local employee in a nine-month period through cash subsidies.
  • All changes to government fees and charges will be frozen by one year, from 1 April 2020 to 31 March 2021.
  • All adult Singaporeans will receive a one-off Solidarity Payment of $600 in cash.

USA

  • The deadline to file or pay (federal) income tax has been extended from April 15, 2020 to July 15, 2020.
  • Net operating losses that arise in the tax years 2018, 2019, and 2020 can be carried back five years
  • The limitation of 80 percent for net operating loss deductions has been suspended temporarily
  • Tax authorities will accelerate the refund of tax credits

Various other relief measures have been implemented at the state level.

France

  • Deferrals are granted for all direct tax payments (corporate income tax, payroll tax [“taxe sur les salaires”], and municipal taxes [“CFE” and “taxe foncière”])
  • The deferral does not apply to VAT payments. Instead, simplified procedures have been put in place for companies to estimate their VAT at the time of filing their tax return. Simplified procedures for electronic invoicing with regard to input VAT have also been put in place.
  • Tax rebates are possible in case of considerable liquidity problems caused by the corona pandemic
  • It is expected that the relief mentioned above will only be granted on condition that no dividends are paid out in 2020
  • Tax authorities will accelerate the refund of tax credits

Spain

  • The deadline for filing tax and self-assessment returns has been extended from April 15, 2020 to May 20, 2020 for taxable persons whose revenue was less than EUR 600,000.00 in 2019
  • Tax payments due in the period from March 13, 2020 to May 30, 2020 are deferred interest-free for a period of three months capped to EUR 30,000.00. These special terms apply to companies whose revenue did not exceed EUR 6 million in 2019 (a deferral for a further three months is possible against payment of accrued interest in arrears)

Austria

  • Interest can be waived for tax deferrals or instalments for tax payments due until September 30, 2020
  • The application for reductions of advance tax payments has been facilitated
  • Interest on back taxes can be suspended for the year 2020
  • Overdue fees for late submission of advance VAT returns can be waived
  • The deadlines for filing tax returns for the years 2018 and 2019 have been extended to August 31, 2020
  • Tax exemption is possible for one-off (bonus) payments made to employees in connection with the corona crisis capped at EUR 3,000.00

Several Austrian provinces and municipalities have announced further relaxing of payment conditions of various taxes (e.g. municipal tax, real estate tax, sewage tax, or tourism levy).

Switzerland

  • No interest will be due in the case of late-payment VAT obligations and other excise taxes, as well as advance payments on federal taxes and certain other levies until December 31, 2020
  • Deferral of corporate income tax and general deadline extensions for certain tax returns (details depend on the respective canton)

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This article was last updated on 07/16/2020

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