COVID-19: Global tax and policy updates

As COVID-19 continues to impact economies across the globe, it’s our goal to keep you updated on international legislative items. Below, please find a broad overview of policies impacting many of our clients along with guidance for obtaining more detailed information.

• Argentina
• Australia
• Austria
• Belgium
• Brazil
• Canada
• Chile
• China
• Costa Rica
• France
• Germany
• Ireland
• India
• Italy
• Japan
• Malaysia
• Mexico
• Netherlands
• Poland
• Singapore
• South Korea
• Spain
• Sweden
• Switzerland
• Thailand
• UK
• Vietnam

Argentina

• Reduction of up to 95% of the employer portion or contributions to the social security program for April 2020. This reduction is for companies with less than 60 employees, plus other requirements.
• For more details on Argentina’s COVID-19 response, visit our Praxity Alliance firms, Mazars, Praxity. 

Australia

• Certain states or territories in Australia have provided either delayed or an exemption of payroll taxes for employers.
• As part of its economic response to counter the impacts of the escalating COVID-19 pandemic, the federal government increased the instant asset write-off threshold of acquired assets from AUD $30,000 to AUD $150,000 and expanded access to include businesses with aggregated annual turnover of less than AUD $500M (up from AUD $50M). The higher thresholds will apply until June 30, 2020. Certain restrictions and criteria may apply to companies seeking to obtain this benefit.
• Businesses with turnover of up to AUD $500M will be allowed to claim a 50% accelerated deduction for the costs of acquiring new assets. This measure will apply until June 30, 2021. To be eligible for the 50% accelerated deduction for new assets, a business must meet the AUD $500M turnover threshold, the same as for the instant asset write-off.
• There will be rebates on payments of (“pay-as-you-go”) PAYG employee federal tax withholding.  This is designed to assist small and medium-sized enterprises (SMEs) in maintaining cash flow to retain their employees. Certain eligibility requirements apply.
• On April 8, 2020, Parliament passed two bills to give effect to the JobKeeper Payment scheme. The measures are expected to benefit six million Australian workers and are budgeted to cost AUD $130B across 2019–20 and 2020–21. Details for the benefits to be derived from this scheme will be forthcoming as the Australian Treasury department finalizes and publishes the related rules.
• For more details on Australia’s COVID-19 response, visit our Praxity Alliance firms, Mazars, Praxity, and William Buck.

Austria

• Until Oct. 31, 2020, a taxpayer expecting a decrease in income may file an application for the reduction of income or corporate tax prepayments for the calendar year 2020. If unable to pay prepayments, the taxpayer may ask the tax office to not assess prepayments at all or to assess them at an amount lower than the expected corporate income tax for the year 2020.
• Taxpayers specifically affected by COVID-19 may apply for a tax deferral, installment payments, and a reduction or complete elimination of interest and late payment fines. These measures apply to income taxes, corporate taxes, and other taxes such as the value-added tax (VAT).
• For more details on Austria’s COVID-19 response, visit our Praxity Alliance firms, Mazars, Praxity.

Belgium

• For all taxes assessed as of March 12, 2020, the payment due dates for corporate income tax, personal income tax (resident and nonresident), and legal entities tax are automatically extended for two months (in addition to the normal payment term). An automatic two-month extension for VAT and wage withholding taxes has also been granted.
• Corporate income tax rules associated with the carry-back of corporate income taxes have been relaxed to allow companies to carry-back income tax losses incurred during the COVID-19 pandemic back to the 2019 tax year. 
• Several tax and social security support measures are available to companies facing financial difficulties as a direct result of COVID-19.
• Certain companies may request a further deferral of payment and a waiver of late payment interest/fines. These measures can be requested for VAT, wage withholding tax, corporate income tax, personal income tax, and legal entities tax.
• The government has increased flexibility concerning the exemption conditions of the deductibility of bad debts.
• For more details on Belgium’s COVID-19 response, visit our Praxity Alliance firm, Mazars.

Brazil

• The Brazilian government has postponed various direct and indirect tax payment deadlines between three and six months, depending on the tax.
• There is a temporary reduction of the IOF tax on indebtedness.
• Tariffs on medical supplies and equipment have been reduced to 0.0% on through Dec. 31, 2020.
• Certain social security contributions to “S System” have been reduced at various rates for the months April through June 2020.
• For more details on Brazil's COVID-19 response, visit our Praxity Alliance firms, Mazars, Praxity.

Canada

• Canada’s Emergency Wage Subsidy provides eligible employers with a wage subsidy of 75% of base salary, up to a maximum of 12 weeks, retroactive to March 15, 2020. Certain eligibility requirements need to be met, and limits on the subsidy exist.
• Deadlines have been postponed for filing income tax returns:
  • For partnerships and certain categories of trusts: May 1, 2020
  • For individuals: June 1, 2020
    • The deadline for income tax payments for individuals, trusts, partnerships and business have been extended until August 31, 2020.
• Post-March 18, 2020 tax payments and installments for businesses, individuals, and certain categories of trusts have been postponed to Sept. 1, 2020.
• As a result, deferral of a sales tax remittance, GST, QST, and HST payments have been extended until June 30, 2020. Certain restrictions exist for the various types of filers.
• For more details regarding Canada’s COVID-19 response, visit our Praxity Alliance firms, Mazars, Praxity, and MNP.

Chile

• Deferral of income tax payments for small and medium-sized businesses (with income up to UF 75K per year) until July 2020.
• Suspension of monthly advanced income tax returns for the months of April, May, and June 2020.
• VAT payment deferment for the months April, May, and June 2020 for organizations with less than US 12,100K per year in revenue.
• Employers are required to guarantee salaries for employees who must remain in their home or work remotely due to the COVID-19 crisis, while the employment relationship is in place.
• For more details on Chile’s COVID-19 response, visit our Praxity Alliance firm, Mazars. 

China

• The Chinese government has implemented various federal and local policies to support business operations and alleviate the financial burden during the COVID-19 pandemic. The policies include:
  • The deferral of the corporate tax filing and tax payment period.
  • Reduction or exemption on certain types of taxes for key industries.
  • Reduction or exemption of social security premium payments from February to June 2020.
  • Refund 50% of the unemployment insurance premiums paid in previous year.
  • Offering subsidies to certain high-tech companies and key manufacturing businesses.
  • Offering subsidized loans to reduce financial cost for industries facing financial difficulties.
  • VAT and tariff exemption for PPE suppliers of COVID-19 control and prevention purposes.
  • Reducing business-related charges for electricity and natural gas.
  • Companies with either 12 consecutive months or four consecutive quarters of accumulative revenue of less than RMB 5,000K are eligible to switch to a Small-Size Tax Payer before December 31, 2020. 
• For more details on China's COVID-19 response, visit our Praxity Alliance firms, Mazars, Praxity.

Costa Rica

• Deferral of the payment of income tax, VAT, certain consumption taxes, and certain customs duties for the months of April through June 2020, until Dec. 31, 2020.
• Exemption of advanced income tax payments for the months of April, May, and June 2020.
• Exemption of Value Added Tax on lease payments for commercial properties for the months of April – June 2020.
• For more details regarding Costa Rica's COVID-19 response measures by the Costa Rican government, contact your Plante Moran engagement partner or another member of our international team.

France

• There has been a deferral of payment of social security contributions without penalty, meaning that employers can defer the payment of all or part of their employee and employer social contributions due to URSSAAF by March 15, 2020 for up to three months.
• Companies may request that tax authorities defer the payment of their next direct tax installments (corporate and payroll tax) without penalty.
• In the most serious situations, direct tax and social security rebates may be granted on a case-by-case basis after an individualized review.
• Various loan guarantee programs, which are guaranteed by the French government at certain percentages for affected companies.
• For more details regarding France's COVID-19 response, visit our Praxity Alliance firms, Mazars, Praxity. 

Germany

• Business directly affected by COVID-19 may defer personal, corporate, trade, and VAT payments and filings until Dec. 31, 2020 without interest or penalties. Certain criteria will need to be met in order to obtain this deferral benefit.
• Eligible companies affected by COVID-19 can request a refund of special advanced payments of VAT made for 2020. This benefit is available in most states within Germany.
• The German federal government has started a subsidy and loan fund to assist organization with liquidity gaps during the COVID-19 crisis. The subsidy fund (EUR 400B) was designed to assist micro-organizations with 10 or less employees. The government loan programs were established to assist small and medium-sized organizations with liquidity gaps that have lower interest rates.
• Taxpayers may request a reduction in required advanced personal income and corporate income taxes if they can show they are directly affected by COVID-19.
• On June 3, 2020, the German government passed a resolution paper which includes the following additional assistance measures:
  • A reduction in VAT rates from 19% -16% to 7% - 5%
  • Import VAT returns filing deadline,postponed until the 26th of each month
  • Loss carry-back rules have been relaxed to increase the carry-back limite to EUR 5,000K. Losses from the years 2020 and 2021 may be carried back. 
• For more details regarding Germany’s COVID-19 response, visit our Praxity Alliance firms, Mazars, Praxity, and Falk.

Ireland

• Corporate Income tax payments may be delayed up to 18 months upon the filing of an application in order to allow companies to conserve cash.
• Ireland has made several COVID-19 plans available, including the Credit Guarantee Scheme, COVID-19 Business Loans, SBCI COVID-19 Working Capital Scheme, and Future Growth Loan Scheme. The criteria for applying for these various cash flow financing options varies by program.
• If an employer can show that they’ve lost at least 25% of their trade, they can claim 70% of employees net wage back (up to a maximum of 410 euros) through the Temporary COVID-19 Wage Subsidy Scheme.
• Additional information is expected on the scheme that will refund employers who pay staff EUR 203 per week for each worker who is temporarily laid off in order to avoid a steep rise in unemployment benefit claims.
• The importation of goods from outside of the European Union will be imported without Customs Duty and VAT from January 30, 2020 through July 31, 2020. Companies can also apply to the Revenue Commissioners for a deferral of tax payments for up to a period of 60 days.
• For more details regarding Ireland’s COVID-19 response, visit our Praxity Alliance firm, Mazars.

India

• For tax returns pertaining to financial year 2018–2019, tax return filings have been extended to June 30, 2020.
• The date for filing GST returns for the months of March, April, and May 2020 has been extended to June 30, 2020. Organizations with less than INR 50M in revenue won’t be subject to interest, penalties, or late fees. Organizations with more than INR 50M in revenue will be charged interest at a rate of 9.0%.
• The date for filing GST annual returns for fiscal year 2018–2019, which are normally due on March 31, 2020, has been extended to the last week of June 2020.
• The Government of India will contribute the employer contribution (on behalf of companies) and employee contribution (on behalf of employees of those companies) toward the EPFO (commonly known as Employee Pension Fund Organization or Retirement Fund) for the next three months for establishments with up to 100 employees meeting certain base salary thresholds.
• For more details regarding India's COVID-19 response, visit our Praxity Alliance firms, Mazars, Praxity.

Italy

• The Italian government has instituted various plans to support micro, small, and medium-sized business. These plans include the extension of credit advances, noncancellation of contractual indebtedness, and mortgage debt until Sept. 30, 2020.
• Certain government loan programs have also been instituted that provide government guarantees to allow organizations to obtain new sources of funding.
• Payments for federal, regional, and municipal taxes and related withholdings due from March 8, 2020 – May 31, 2020 have been postponed until June 30, 2020 without interest or penalties. However, tax filings are still required to be made.
• For more details regarding Italy’s COVID-19 response, visit our Praxity Alliance firms, Mazars, Praxity.

Japan

• Companies can request a tax filing and payment extension for corporate and consumption taxes (outside of the normal extension process) if they meet certain criteria.
• The donation of equipment to support individuals that have suffered losses related to COVID-19 can be deducted by the corporation at cost.
• Certain interest-free loans and credit guaranties have been authorized by the government in order to support small businesses.
• The government has also enacted various subsidy programs in place for certain businesses.
• For more details regarding Japan’s COVID-19 response, visit our Praxity Alliance firms, Mazars, Praxity.

Malaysia

• The Malaysian government will provide a salary reimbursement to employers at various levels per month to every employee for a three-month period.
• Deferral of income tax filings for companies with tax year-end periods from September 31, 2019 to December 30, 2019, for a three-month period.
• For more details on Malaysia’s COVID-19 response, visit our Praxity Alliance firm, Mazars. 

Mexico

• The federal and tax authority haven’t pronounced any extensions or deferrals for corporations in connection with tax returns, informative returns, or tax self-assessments. The government has also not initiated any relief packages for corporations or individuals at this time.
• Some Mexican state governments are offering the deferral of certain payroll tax payments for the months of March and April 2020 and some provide reductions in the tax due depending on each state.
• For more details on Mexico's COVID-19 response, visit our Praxity Alliance firms, Mazars, Praxity.

Netherlands

• Taxpayers can file a request for an extraordinary deferral of the payment of personal income tax, corporate income tax, VAT, and wage withholding tax if certain requirements are met. Certain late filing interest and penalties may be partially or completely reduced.
• The tax loss carry-back rules have been amended to allow Companies to carryback losses incurred in 2020 to the 2019 year to the extent of 2019 income.
• The Dutch government has expanded the government loans guarantee program for small and medium-sized enterprises (under 250 employees and under EUR 50M in revenue and EUR 43M in assets). Under the extended program, the government will guarantee loans made from financial institutions for up to 75% of the principal loan balance.
• The Dutch government introduced a temporary measure for Emergency Employment Bridging Fund (“NOW”). This measure will provide eligible employers who continue to pay employees with an allowance to reimburse the company for 22.5–90.0% of the employers’ wages if certain criteria are met.
• The non-taxable allowance included in the “Work Expense Scheme” for employers has been increased from 1.70% to 3.00% of wage expense for 2020. This non-taxable allowance has a cap of EUR 400K.
• For more details regarding the Netherlands’ COVID-19 response, visit our Praxity Alliance firm, Mazars. 

Poland

• A payroll financing program is available for small enterprises to co-finance the part of the wage costs and the related social security contributions (up to 50%).
• There has been an extension of various tax deadlines for many industries, entities, and individuals. Companies will also have the ability to carryback losses incurred in 2020 to 2019 (up to PLN 5M). The remaining losses can be carried forward to future tax years.
• Various relief benefits have been announced for microentities with nine employees or less.
• Poland has postponed the new VAT matrix rates until July 1, 2020.
• For more details regarding Poland’s COVID-19 response, visit our Praxity Alliance firm, Mazars.

Singapore

• A Job Support Scheme (JSS) was implemented to provide employers with nine months of wage support to help organizations pay wages and to retain local employees (Singapore citizens or permanent residents). Support is provided at various percentages of wages to various industries during the nine-month period.
• Property tax rebate of 30% for the year 2020 for nonresidential property owners and waiver for property tax for property owners with hotels, apartments, tourist attractions, shops, and restaurants.
• A 25% rebate for corporate income taxes, up to SGD 15K for the 2020 tax year. Also, a three-month deferral of income tax payments for businesses and self-employed individuals.
• Deferral of various corporate and GST tax deadlines to various dates.
• For more details on Singapore’s COVID-19 response, visit our Praxity Alliance firm, Mazars.

South Korea

• There has been a 30–60% reduction of income tax and corporate income tax for companies located in disaster areas such as Daegu, Gyeong-san, Bonghwa, and Cheongdo.
• Under exceptional circumstances, corporate tax filing and payment deadlines can be extended for up to nine months. Other local tax deadlines can be delayed, if certain circumstances are met.
• Employee retention and work/life balance payroll subsidies are available at various rates if certain criteria are met.
• Small individual businesses with less than KRW 80M in sales are allowed to apply for a reduced VAT rate.
• For more details regarding South Korea’s COVID-19 response, visit our Praxity Alliance firms, Mazars, Praxity.

Spain

• While various corporate income tax filing and payment deadlines have been extended, interim tax returns, informative returns, and tax self-assessments (i.e. VAT withholding installments), deadlines have not.
• VAT rates have been reduced for certain goods and industries for various dates during 2020.
• For more details regarding Spain’s COVID-19 response, visit our Praxity Alliance firm, Mazars.

Sweden

• Eligible companies may apply for deferment of payment of employer’s contributions, provisional tax on salaries as well as VAT.
• There is a proposal to provide short-time work allowance to support 50% of payroll for organizations that maintain employee pay rates not less than 90% of their base wages.
• It’s been proposed that the federal government would take on 50% of the lowered fixed rents for companies in business sectors impacted by COVID-19.
• To make financing of companies easier, the government is proposing a loan warranty that guarantees up to 70% of new loans from the banks to the companies.
• The social security contribution rate has been temporarily reduced from 31.42% to 10.21%  from March 1, 2020 to June 30, 2020, for qualifying organizations.
• Companies that have suffered a large turnover loss (measured by a 30.0% decrease in revenue in the months of March and April 2020, compared to March and April 2019) are eligible for restructuring support. Other requirements exist to qualify for the restructuring support.
• For more details regarding Sweden’s COVID-19 response, visit our Praxity Alliance firm, Mazars.

Switzerland

• Companies can apply to their banks for bridging credit facilities for up to 10% of their annual turnover.
• Companies can apply for a corporate income tax payment postponement for tax invoices received between March 1, 2020 and December 31, 2020.
• The Federal Council has decided that the payment deadline for VAT credits will be extended from March 20, 2020 to Dec. 31, 2020. No interest for late payment will be charged on VAT claims during this period.
• For more details regarding Switzerland’s COVID-19 response, visit our Praxity Alliance firm, Mazars.

Thailand

• Reduction in social security fund contributions for employees (from 5% to 1%) and for employers (from 5% to 4%) for March to May 2020. The actual contributions for these months have also been deferred for three months.
• The deadlines for withholding tax, VAT, and corporate income tax filings have been deferred for various dates depending on the original tax deadline and tax type.
• For more details on Thailand’s COVID-19 response, visit our Praxity Alliance firm, Mazars.

UK

• There is an employer allowance equal to up to 80% of wages, up to GBP 2,500 per employee per month, for employees who might have otherwise been laid off.
• There is a three-month deferral plan for VAT payments for all UK businesses from March 20, 2020 to June 30, 2020.
• Self-assessed income payments due on July 31, 2020, have been postponed until January 31, 2021. 
• A “Time to Pay” scheme has been implemented to allow companies to pay corporate income taxes due over time in a period in which the organization can afford to make payments.
• Two government funding schemes were implemented to support large organizations and SMEs. The program for SMEs is intended to provide a government guarantee on 80% of the principal value of loans up to GBP 5M for business with revenue of up to GBP 45M. The regulation also removes certain requirements on the loans, including the removal of personal guarantees and other small business requirements.
• For more details regarding the UK’s COVID-19 response, visit our Praxity Alliance firms, Mazars, Praxity.

Vietnam

• Extension of VAT payment deadlines of five months for the months of March, April, May, and June 2020. However, VAT returns are still required to be submitted.
• Five-month extension of the first payment of the 2020 payment for rent paid directly to the State.
• Employers are entitled to unilaterally terminate labor contracts with employees. However, the employers must prove that they have applied necessary remedial measures but still have no choice other than cutting jobs.
• Due to the temporary shortage of labor force due to COVID-19, the 2012 Labor Code allows an employer to temporarily assign an employee to another position to fill in vacancy. The assignment cannot exceed 60 working days within a period of 12 consecutive months, unless otherwise agreed by the employee.
• For more details regarding Vietnam’s COVID-19 response, visit our Praxity Alliance firm, Mazars.