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Coronavirus: Tax provisions and Easements by Country

Coronavirus: Tax provisions and Easements by Country

The below highlights a country-by-country breakdown of the tax provisions and easements being implemented by individual country tax authorities. These provisions are in light of the stress that Coronavirus is putting on the global economy. Many governments are looking to VAT deferments, tax rate cuts and VAT refunds as a way to help SMEs and large companies alike get through these uncertain times.

We encourage all businesses – especially those with multiple foreign VAT registrations – to read the below and take advantage of these provisions. If you need any help or further advice, please don’t hesitate to get in touch with us on info@vatglobal.com.

Tax provisions and easements by country: 

Australia

Australia Tax payment holiday: If you or your business has been affected by COVID-19, The Australian VAT Authorities will work with businesses to defer some payments and vary any due instalments. These include income tax, activity statement, pay as you go (PAYG) instalments, FBT and excise payments by up to six months. (source)

Low-interest payment plans: If your business has been affected by COVID-19 and you need help to pay your existing and ongoing tax liabilities, you will be able to discuss entering a low-interest payment plan with the Australian tax authorities.

Austria

Austria tax Payment holiday: The taxpayer can apply to his tax office for deferral of payment or payment in instalments if justified.

Low-interest payment plans: The taxpayer can apply to his tax office (e.g. in the application for a deferral or instalment payment) for a reduction of the late payment interest.

Belgium

update 28/5/2020

VAT rate on catering, restaurant and cafe services reduced to 6%

Belgium tax payment holiday: The tax authorities have implemented an automatic deferral for 2 months, without administrative fines or late payment interest being imposed.

  • Payment – February 2020 VAT return: until 20 May 2020
  • Payment – March 2020 VAT return: until 20 June 2020
  • Payment – Q1 2020 VAT return: until 20 June 2020

Postponed Tax Audits:  The Belgian tax authorities also have postponed all non-essential/less urgent on-site tax audits. Remote tax audits could still be executed, as well as urgent on-site tax audits (to protect the financial interests of the Belgian state).

Bulgaria

Bulgaria tax penalty and interest easements: There are reports that the deadlines for filing the VAT returns or for paying monthly VAT liabilities will not be adjusted, but it may be that penalties and interest for late filings or payments could be waived.

Bolivia

Bolivia VAT Payment Deferment: VAT payments, submissions and obligations for Feb ad March deferred to May.

Tax Refund Requests Submission extension: Submission of tax refund requests due in March deferred to April.

Canada

Canada payments of income tax holiday: Allow all businesses to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period. This measure will result in businesses having more money available during this period. (source)

China

update 28/5/2020: Revenue from film screening is exempted from VAT in a bid to support the film industry post the Coronavirus.

China has cut VAT on medical services, catering and accommodation services, sundry personal services (e.g., hairdressing, laundry), and public transport. There is also a cut on masks and protective clothing. VAT has also been reduced from 3% to 1% on the cash accounting scheme for small businesses until the end of May.

Colombia

update 28/5/2020: Earlier in May, Colombia eliminated VAT for three days in a bid to reactivate its economy.

For taxpayers engaged in hoteling services, passenger air travel services, theatrical activities and live show business activities, the VAT payment due for the March – April period (or for the January – April period, if they file the VAT return every four months) was extended to June 30, 2020 (previously from May 12 to May 26, 2020).

For taxpayers engaged in the provision of alcoholic beverages in situ, cafeterias and restaurants, as well as travel agencies and tour operators, the deadline to pay the VAT and national excise tax for the March — April period (or for the January – April period if they pay the VAT every four months) was extended to June 30, 2020 (previously from May 12 to May 26, 2020, depending on the last digit of the taxpayer’s tax identification number). These extensions are for the date of payment, not for filing VAT or the national excise tax returns. (source)

Costa Rica

update 28/5/2020: The rate of VAT  applicable for engineering, architecture, topography, and civil works construction services will be 4%, effective 1 July 2020.

Costa Rica has provided a 3-month VAT payment deferment for taxpayers from March 15. Further, there is an exemption from VAT on commercial leases for the months of April, May, and June 2020 if both the lessee and the lessor are registered in the taxpayer registry. (source)

Croatia

The Croatian government will allow taxpayers to defer payment or to arrange an instalment payment plan for their tax liabilities, social security contributions and certain non-tax levies without being subject to interest being imposed during the period of deferral of payment (payments in instalments). (source)

Cyprus

The Ministry of Finance in Cyprus announced on March 18 the approval of two VAT bills with which:

VAT Return Suspended: The obligation to submit the VAT return for the period 01/12/2019 – 29/02/2020 is suspended until 30 April 2020 where (a) the VAT payable for the said VAT period is settled not later than 10 November 2020, and (b) the total revenues for the period 01/03/2019 – 29/02/2020 does not exceed EUR 1 million.
VAT Rate Decrease: The standard VAT rate and one of the reduced VAT rates are temporary reduced: – from 19% to 17% for the period 01/04/2020 – 31/05/2020 – from 9% to 7% for the period 01/04/2020 – 15/07/2020.

Czech Republic

update 28/5/2020: VAT on accommodation services and admission to cultural and sporting events reduced from 15% to 10%.

VAT Return Deadline Extended: The deadline for filing tax returns for annual taxable periods shall be automatically extended to four months if tax returns are filed electronically.

VAT reductions: Advances for VAT deduction will allow the tax authority to refund parts of excess deductions not subject to review. The deadline for refunding excess deductions (typically relating to VAT) will be extended from 30 to 45 days; under transitory provisions, the new deadline will apply to taxable periods for which the deadline for filing tax statements expires after the amendment’s effective date.

Czech tax penalty and interest easements: The Czech Republic will lift fines for coronavirus-related late filing of corporate income tax returns and value-added tax reporting.

‍Denmark

VAT Payment Holiday: Deadline for reporting and payment of VAT for companies who report on a monthly basis as well as companies who report on a quarterly and semi-annual basis. (source)

For small businesses:  For small and medium-sized businesses, the tax periods for the first and second quarters and the first and second half years must be added together. This reduces the payment deadline for medium-sized companies for the first quarter of 2020 by 3 months, and for small businesses, the payment deadline for the first half of 2020 is reduced by 6 months. The periods are collected so that you pay as a result of reporting the second period. However, you can still report to the original deadlines and, for example, get negative VAT paid.

For large businesses: 

  • The deadline of April 27 will be moved to May 25, 2020
  • The deadline of 25 May will be moved to 25 June 2020
  • The deadline of 25 June will be moved to 27 July 2020

Estonia

The Estonian Tax and Customs Board (ETCB) has introduced a VAT payment delay for taxpayers until 1 May 2020. VAT will not have to be paid, but returns must be submitted as normal. Companies in difficulties need to apply for the payment of tax arrears in instalments through the ETCB’s e-service environment. In addition, all VAT audits and assessments are suspended.

Finland

update 28/05/2020: VAT paid earlier in 2020 can be claimed back and paid later.

Finland tax penalty and interest easements: Penalties related to late filing of VAT returns will not be collected.
No tax payment holiday in Finland: There is no possibility to apply for an extension for the filing of the VAT return.

France

Update 28/05/2020: VAT exemption for funds management operations expanded.

Although France has allowed some deferrals with regards to direct taxes such as corporate taxes and payroll taxes, they have made it clear in their regulation that they will not be granting any deferments or changes to value added tax.

Germany

update 28/05/2020: VAT for Restaurant and Catering Services reduced from 19% to 7% from 1 July 2020 until 1 July 2021.

Germany Tax Payment Holiday: businesses may apply for VAT payment postponement until 31 Dec 2020. 

Greece

update 28/05/2020: VAT rates temporarily reduced for a host of items including transport from 24% to 13% from 1 June 2020 until 31 October 2020, transport by train, metro, tram, buses, plane, ship and by combined transport. VAT  on coffee and non-alcoholic beverages as well as cinema tickets reduced from 24% to 13% for the same period (1 June – 31 October 2020).

VAT Rate Decrease: VAT rate reduction from 24% to 6% for products needed to protect against Coronavirus.

Tax Payment Holiday: There will be a four-month VAT payment delay. By decision of the Minister of Finance, upon recommendation by the Governor of the Independent Public Revenue Authority (AADE), the affected enterprises by sector and by region are specified, the period of extension of the deadline for payment and suspension of VAT collection, as well as any other details necessary for the implementation of this Agreement.

Guatemala
Update 28/5/2020: Items imported to combat the COVID-19 crisis and donated are exempt from VAT.

Guyana

update 28/05/2020: Vat exempt on domestic air tickets

VAT Rate Exemptions: VAT exempted for all medical Supplies for testing, prevention and treatment of COVID-19 virus. Exemption valid until 30 June 2020.

Hungary

Waiving of tax payment for transport service Companies: Small taxpayers carrying passenger transport services (e.g. taxis) under the KATA taxation regime are exempted from their tax liability for the months March, April, May and June 2020.

The Hungarian Authorities have made no mention of VAT payment deferments for companies.

Iceland

Although the Icelandic tax authorities have passed legislation providing tax provisions for individuals, they are yet to provide VAT provisions or payment deferments for companies.

India

The Ministry of Finance has extended the deadlines for filing returns of goods and services tax (GST) in view of the coronavirus crisis and difficulties faced by taxpayers in meeting the compliance norms. (source)

Indonesia

Relaxation of Import Taxes: Relaxation of ITA 22 (PPh Pasal 22) for importers in three months
Speedy VAT Refunds:  for businesses Speeding up the refund of Value Added Tax for three months.

Ireland

Irish tax penalty and interest easements: Interest on late payments of January and February VAT are to be suspended. This is designed to help small and medium businesses experiencing cash-flow and trading difficulties as a result of the coronavirus.

Israel

Israel Tax Payment Holiday: The Israeli tax authorities allowed a 10-day deferment of VAT filings and payments. The tax authorities have also stated that they will be open to any request for further delays or assistance from businesses experiencing difficulties.

Italy

Update 28/05/2020: VAT exempted on ventilators, monitoring systems, infusion pumps for drugs, endotracheal tubes, and certain protective devices and masks, among many other items. Supplies of eligible goods if made between 19 May 2020 and 31 December 2020 will be VAT-exempt, with the right to recover VAT. from 1 Jan 2021.

VAT Payment Holiday for certain sectors: The aim of this provision is to grant assistance to entities operating in sectors more heavily affected by COVID-19. In particular, the decree postpones the VAT payment deadline for entities that have their legal seat or center of operations in Italy and that operate in sectors including sports, theatres, cinemas, conventions and exhibitions, restaurants, bars or pubs, assistance for the elderly or disabled, childcare, thermal sites (hot springs), and tour guides. For these entities, the deadline for VAT payments due in the month of March 2020 is postponed to 31 May 2020; payment may be made in up to five equal monthly instalments if the first instillment is paid by 31 May 2020. The deadline is 30 June 2020 for payments by entities in the sports sector.

Jamaica

Tax Rate reduction: Jamaica has lowered its consumption tax rate from 16.5% to 15%.

Japan

Japan local tax late payments: The Tokyo tax authorities announced an extension of business tax (local tax) due between 27 February 2020 and 15 April 2020 will be extended to 16 April 2020 (except for when a taxpayer closed the business in the middle of the year).
Consumption tax rate: Japan is considering lowering or temporarily abolishing the 10% consumption tax rate in order to support the economy. But they are yet to make a decision.

Kazakhstan

Update 28/05/2020: Civil aviation exempt from VAT.

Excise Duties exemption: Excise duties will be exempted on exported petrol and diesel fuel until 31 December 2020.

VAT Rate Decrease: sale and import of socially significant alimentary goods will be subject to VAT at the rate of 8% until 1 October 2020.

Korea (South)

South Korea VAT Cuts: South Korea has cut vat for small businesses.

Luxembourg

Update 28/05/2020: The Luxembourg authority for VAT has announced that the administrative tolerance regarding VAT declarations in relation to COVID-19 has been revoked in view of the gradual deconfinement of the national economy.

Starting this week, the Indirect Tax Administration will reimburse VAT credit balances below €10,000, which should help to improve cash positions of approximately 20,000 enterprises established in Luxembourg.

Luxembourg tax penalty and interest easements: The Indirect Tax Administration announced that due to COVID-19, a possible failure to file VAT returns within the normally applicable deadlines will not be fined. This measure will apply until further notice.

Malaysia

Malaysia has waived service tax on tourism-related expenses.

Malta

Malta Tax Payment Deferment: VAT payments due by 15 March 2020 and 15 April 2020 to be settled in two equal instalments with the two quarterly returns immediately following the quarter in relation to which the VAT was deferred. The deadlines for submission of statutory tax documents and notifications will, however, remain unchanged.
Malta tax penalty and interest easements: No interest of penalties will be charged on tax payments that are postponed in terms of this measure.
Accelerated VAT refunds: The Commissioner for Revenue has also committed to accelerating pending tax refunds.
VAT Waived on certain expenses: VAT on hotels and accommodation has been waived.

Moldova

VAT waived on certain expenses: VAT on hotels and accommodation, restaurants and catering have been waived.
VAT Audits postponed: Any VAT investigations or assessments will be paused.

Netherlands

update 28/05/2020: VAT exemption for supply of personnel to care for and nurse persons in qualifying institutions.

Input VAT returns can be made earlier: VAT-registered businesses that are typically in a VAT recovery position may adjust quarterly VAT filing to monthly.
Netherlands VAT payment Deferments: VAT-registered businesses that are typically in a VAT remittance position may adjust VAT filing from monthly to quarterly. It may also be requested to credit VAT recovery rights with other tax liabilities (such as wage tax).
Netherlands tax penalty and interest easements: The Dutch tax authorities will temporarily impose no administrative penalties on businesses for late tax filing or payment. This will apply to personal income tax, corporate income tax, wage tax and VAT.

New Zealand

New Zealand tax penalty and interest easements: Inland Revenue will be given the authority to write off interest on late payments for those adversely, financially, affected by COVID-19 for tax payments due after 14 February 2020.

Norway

Although Norway has allowed deferred payments of wealth tax on business assets for the 2020 financial year, they have not made any changes to their VAT scheme.

Oman

The Omani government announced it has taken measures to help small businesses in the sultanate, including tourism and municipality tax breaks.

Philippines

Philippines Tax payment Holiday: The Philippine Bureau of Internal Revenue March 19 issued a circular extending the filing deadlines for various taxes, including VAT. Businesses will be allowed to extend their monthly VAT declarations for February and March.

Poland

update 28/05/2020: Mandatory electronic VAT cash registers have been delayed to 31 December 2020 for catering, accomodation and fuel sectors. Other sectors have been postponed until 30 June 2021.

Postponed VAT deadlines: Postponed deadlines—the effective date of new SAF-T-V7M would be postponed to 1 July 2020 (from 1 April 2020), and value added tax (VAT) settlements would be facilitated.

Portugal

Update 28/05/2020: VAT on gyms and health club membership reduced to 6%.

VAT exemption and reduced VAT rates on certain goods used in the fight against COVID-19. The temporary measures are intended to reduce the tax burden on taxpayers and support the healthcare industry during the pandemic.

Delays to VAT payments as follows:

March returns to 25 May 2020
April returns to 25 June 2020
Q1 returns to 25 June 2020
Annual returns to 7 August 2020

Portugal Tax Payment Holiday: Postponement of the deadline regarding the first instalment of the special payment on account (due in March) to 30 June 2020, without being subject to any penalty. This is automatic for businesses with less than €10 million turnovers per annum. Businesses that exceed the threshold will have to apply.

Romania

update 28/05/2020: Companies’ VAT registration will be performed with a subsequent risk analysis by the tax authorities. Until now, the risk analysis was also performed prior to VAT registration.

VAT reimbursements brought forward: The reimbursement of VAT tax during the month of March for all the accounts that are settled and for which decisions of reimbursement were issued.
Faster VAT refunds going forward: The implementation of a new mechanism for VAT reimbursement which aims to rapidly solve the VAT reimbursements starting with April 1st, 2020.
Netherlands tax penalty and interest easements: The Dutch tax authorities will temporarily impose no administrative penalties on businesses for late tax filing or payment. This will apply to personal income tax, corporate income tax, wage tax and VAT.

Russia

Update 28/05/2020: The sale of medical supplies aimed to combat the COVID-19 pandemic is subject to a reduced 10% VAT rate.

Russia VAT deferment: The tourism and airline industries have been given tax deferrals from 1 May 2020. Although the Russian government has given assurances that there will be tax payment reliefs for some distressed sectors of the economy during the coronavirus pandemic, it has still not clarified if this extends to VAT.

Saudi Arabia

Saudi Arabia Tax Payment Holiday: The tax authority has allowed businesses to have a VAT payment deferment for 3 months.  Monthly returns due for February to May will all be delayed to the last days of June to September, respectively. Quarterly returns for Q1 are delayed until 31 July 2020.

Serbia

Serbia Tax Payment Holiday: For taxpayers granted a deferral for paying taxes during the state of emergency, effective for the instalment due in March 2020, the tax authorities will not cancel a “decision” for a delay of a tax payment or will not initiate a forced collection procedure. During this period, no default interest will be charged on the tax debt. (source) The source is unclear on whether this is in relation to individual taxpayers only or includes businesses.

Singapore

Several financial support packages have been approved by the authorities. However, up to now it appears there are no deferments or postponements of taxation due dates.

Slovakia

update 28/05/2020: Slovakia to allow late cross border VAT submissions to third countries via the 13th Directive mechanism.

Slovakia VAT Payment Holiday: The Slovak Ministry of Finance has published a proposed relaxation of Value Added Tax and other tax rules. This includes an extension of the VAT payment date, currently the 25th of the month, following the reporting month or quarter. There will also be no interest or penalties on late filings.

South Africa

VAT Refunds: SARS (South African Revenue Service) is considering allowing businesses and workers to reclaim the VAT put on goods that have been purchased specifically for their trade. If it’s an essential tool to facilitate work, businesses may soon be able to apply for a refund on each item. However, this has not been confirmed yet by the government.

Indications from the South African Revenue Service are that taxpayers need to continue to comply with their tax obligations, but that there may be several unusual value added tax (VAT) consequences to be considered (source). The details of the actual temporary relief measures are not known at this time.

VAT Exemption and import VAT refunds on certain goods: A VAT exemption on “essential goods” and full import duty rebate on importation during the COVID-19 pandemic if the goods are imported for the relief of distress of persons impacted by COVID-19. “Essential goods” are broadly goods that may be manufactured or traded with during the COVID-19 pandemic.

Spain

Spain Tax Payment Holiday: Earlier in March, Spain had already announced VAT and other tax payment holidays for small businesses. The scheme is not available for large businesses (above €6m turnover) or if the Value Added Tax due is above €30m.

Sri Lanka

Update 28/05/2020: Deadlines for VAT Returns further extended  to 15 July 2020.

Sri Lanka VAT Payment Deferment: February and March VAT payments (previously due on 20 March and 20 April) are delayed to 30 April.

Penalties and interest waived: There will be no late payments or interest charges.

Sweden

Sweden tax penalty and interest easements: Sweden is providing late penalty and interest easements on VAT payments for up to one year.

Switzerland

Switzerland tax penalty and interest easements: The Swiss tax authorities have granted late penalty interest relief for VAT  payments until the end of December 2020. Taxpayers must apply for the deferral to their VAT payments. There will be 0% interest charge. VAT returns must be filed as normal to report the unpaid Value Added Tax.

Taiwan

Taiwan tax payment Holiday: Taiwan will allow tax payment delays of up to one year due to the pandemic (source).

Thailand

Update 28/05/2020 – Faster VAT Refunds: Business operators who have been approved as “Good Exporters” by the Revenue Department shall receive VAT refunds within 15 days (normally takes 30 days) from the date of filing the online; or 45 days (normally takes 60 days) from the date of filing in paper form at the Area Revenue Branch Office.

VAT Exemption: Applicable import duties imposed on 66 items categorised as medical supplies or others which help treat, diagnose or prevent COVID-19 will be exempted from 26 March 2020 to 30 September 2020.

Faster VAT refunds: VAT refunds will be granted within 15 days, compared to a normal 30-day period, if VAT returns are filed via an e-filing system.  For paper filings, refunds will be granted  within 45 days, compared to a normal 60-day period. (source)

Turkey

Turkey Tax payment Holiday: Several sectors will have their VAT returns for April, May and June delayed until 27 June 2020. VAT payments for April to June are delayed six months out to October to December. The sectors include Automotive; Accommodation; Cinema; Health; Publishing; Public exercise facilities; and Professional services.

VAT Rate Reductions: The VAT rate on airline travel is to be cut on domestic flights from 18% to 1%. Hotel accommodation and services are to be zero-rated.

United Arab Emirates

The stimulus package released by the Dubai Government includes a refund of 20% of customs duties paid on imported goods that are sold locally, cancellation of bank guarantee required to clear goods, and a 90% reduction of customs clearance fees. Dubai Customs has also put audits on hold. (source)

United Kingdom

UK Tax Payment Holiday: All VAT payments are postponed for the next three months until the end of June 2020. The VAT not paid during the period is then due to be paid  by the end of the 2020/21 financial year, which ends on 31 March 2021. There was no mention of interest charges on any deferred VAT. However, it can be assumed that this will not be imposed. There are no allowances for businesses on special schemes, such as the annual VAT payment. Returns must still be filed on time.

Import VAT and duties waived on certain goods: Goods arriving from outside the EU will not be subject to customs duty or import VATThese goods are vital medical equipment including ventilators, coronavirus testing kits and protective clothing.

Vietnam

Updated 28/05/2020: Monthly returns due 15 April 2020 and 15 May 2020 extended until 31 May 2020.

Vietnam Tax deferment: The Vietnamese Ministry of Finance is offering a 5-month Value Added Tax deferment to assist with companies during the COVID-19 pandemic. The measures are targeting: small businesses; transport; agriculture sector; and foodstuffs and textile sectors.[/vc_column_text][/vc_column][/vc_row]

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