Due to the COVID-19 pandemic, countries all around the world change their tax systems, delay payments or returns, and try to ensure a smooth handling during the crisis. It also means that not everywhere it will be possible to keep current processes running like we are used to it. Of course, this will also have an impact on VAT in Europe.
Antonia Klatt
Last Updated on 1 February 2021
Last update: 25.05.2020
Before we get started, maybe a few words of introduction. We are in an exceptional situation with the COVID-19 pandemic, which is affecting ALL sectors – no matter if businesses or our daily life.
Even if we as a remote company are lucky enough to be able to maintain our operations as far as possible, there are many areas where this is not possible. For example, although tax offices throughout Europe are currently trying to provide quick help, the completion of monthly tasks may well be delayed. At present, no penalties are to be expected for this, there is simply no other way and we want to make sure you are aware of that.
Amazon, for example, has also made some changes, and has, for example, controlled deliveries to fulfilment centres, switched off Amazon Merch in the US, but at the same time promised immediate help for certain retailers.
We will update this article on a daily basis, provide as much assistance as possible and if you need some further information, please reach out to us or join our facebook groups to hopefully find the help you are looking for as soon as possible!
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Most important: Stay healthy and (if possible) stay at home! Now some hard facts, what changes in terms of VAT.
Table of Contents
↓ Austria
↓ Belgium
↓ Bulgaria
↓ Croatia
↓ Cyprus
↓ Czech Republic
↓ Denmark
↓ Estonia
↓ Finland
↓ France
AUSTRIA
As a result of the corona crisis, the Austrian authorities have introduced a number of changes in VAT law and in the handling of VAT returns and debts, in order to relieve companies and individuals during the current crisis. The Austrian Ministry of Finance has initiated the following changes:
- Businesses can apply for the deferral of VAT and penalty payments
- They can also apply for tax deferral or payment by instalments
- Deferral interest and late payment penalties can be reduced or waived
- Income and corporate tax prepayments in 2020 will be reduced
- Individual extensions of the monthly VAT returns can be granted by the tax office
- Tax audits are suspended
- All deadlines for appeals are moved to 1 May 2020
- No stamp tax duties will be levied on any documents that are related to any measure in connection with COVID-19 – no matter if directly or indirectly related
The BMF has also promised an unbureaucratic extension of the deadline for submitting monthly VAT returns if taxpayers are affected.
These changes must be requested by the taxpayer from the responsible authority and do not apply automatically. The competent bodies have been increased, both in terms of staffing and funding, to ensure faster processing. Furthermore, during the crisis, the bureaucratic burden is also to be reduced to a minimum.
BELGIUM
The Belgian tax authorities have introduced extensions for periodic VAT returns, payment deadlines and the submission of EU sales lists.
VAT RETURNS
- Deadline for the VAT Return for February 2020 is extended from the normal deadline (20 March 2020) until 6 April 2020.
- Deadline for the VAT Return for March 2020 is extended from the normal deadline (20 April 2020) until 7 May 2020.
- Deadlines for the VAT Return for the first quarter of 2020 is extended from the normal deadline (20 March 2020) until 7 May 2020 as well.
EC SALES LIST
- Deadline for EC Sales List for February 2020 is extended from the normal deadline (20 March 2020) until 6 April 2020.
- Deadline for the report for March 2020 is extended from the normal deadline (20 April 2020) until 7 May 2020.
- Deadline for the report for the first quarter is extended from the normal deadline (20 April 2020) until 7 May 2020.
VAT PAYMENT
In Belgium there will be an automatic deferral of payment of 2 months for VAT without having to pay fines or interest applies.
- Deadline for payment of the monthly VAT Return (February 2020) is extended from the normal deadline (20 March 2020) until 20 May 2020.
- Deadline for payment of the monthly VAT Return (March 2020) from the normal deadline (20 April 2020) until 20 June 2020.
- Deadline for payment of the VAT returns of the first quarter (JAN-MAR 2020) is extended from the normal deadline (20 April 2020) until 20 June 2020.
- VAT “quick” refund mechanism (29 March 2020) applies for all VAT taxpayers filing monthly VAT return
Further, there is a late-payment penalty relief for tax duties which arose before 12 March 2020 and a VAT payment plan which provides relief from imposition of penalties.
TAX RELIEF
filing deadline for corporate income tax and tax on non-legal entities is delayed to 30 April 2020
payments for taxes on wages and salaries are also postponed
Remit payments of tax liabilities arising as of 12 March 2020 deadline is extended for 2 months, with no interest for late payment
Taxpayers can also apply for instalment payments of the debts relating to VAT. Further, business can apply for a payment plan if needed. This measure shall help businesses which are struggling to pay their VAT debts by introducing additional payment periods and mean an exemption from default interest and/or fines for late payment.
BULGARIA
The Bulgarian government has adapted the filing deadlines for various reports:
- Deadline for filing annual corporate income tax return and for the payment is delayed until 30 June 2020
- Deadline for filing annual individual (personal) income tax returns and for the payment is extended until 30 Juni 2020
- Deadline for filing annual individual income tax return for individual taxpayers remains unchanged: 30 April 2020
CROATIA
In Croatia, new tax measures were introduced to support businesses and private individuals during the crisis.
The tax relief measures allowing for the deferral of tax payments allow for a postponement of three months from the original due date, and a further extension for an additional three months is possible in some cases as well.
This means eligible tax payments generally are not due until 20 June 2020.
Further measures include:
- Grants provided to emplyers in order to support job preservation will be exempt from paying contributions on supported net salaries
- Deferral of the requirement to remit VAT until invoices are settled
- Taxpayers with business activities that are banned, disabled or significantly impeded can be fully or partially exempted from paying their tax obligations due in April, May, and June 2020
- Further details for postponement of reporting and payment deadlines for all taxes will follow soon
CYPRUS
The Cypriot government has withdrawn the proposed reduction of the standard VAT rate from 19% to 17% for two months from 1 April 2020 to 31 May 2020.
- Cyprus implemented postponement on penalties for VAT payments.
- There will be no penalties or overdue interest on the February, March and April returns
- The government has issued a decree providing ta relief: deadline for income tax returns for companies and self-employed taxpayers is extended until 1 June 2020.
- VAT payment is delayed until 10 November 2020
NOTE: All Returns must still be filed in time!
CZECH REPUBLIC
The Czech government announced a waiver of sanction for late submission of VAT returns and sanction for non-submission of control statements in all cases when the taxpayer cannot fulfil his/her duties due to the coronavirus.
- Businesses can request to delay their tax payments
- The requirement to submit VAT returns prior to any audits will be dropped
- Refunds of VAT credit will be processed quickly
- Introduction of “loss carry-back” concept which basically means tax losses are applied to earlier year.
The Czech Ministry of Finance has further decided to introduce general waivers concerning:
- Income tax prepayments which are due on 15 June 2020
- Late filing of real estate acquisition tax return
- Late filing of VAT returns
An amendment to the income tax law has been proposed in order to introduce an option to allow taxpayers to use tax losses retroactively for up to two years, or prospectively for up to six years!
NOTE: The deadline for submission of VAT reports & payments is unchanged. Make sure to request a later submission if necessary.
DENMARK
The Danish parliament approves tax relief for Danish companies in response to coronavirus (COVID-19) and other measures as follows:
Monthly VAT payment deadlines postponed by 30 days (for March, April and May 2020)
- Deadline payment March 2020: 25 April 2020
- Deadline payment April 2020: 26 May 2020
- Deadline payment May 2020: 25 June 2020
- Deadline payment June 2020: 27 July 2020
For businesses submitting their VAT returns on a quarterly basis, VAT payment and reporting deadlines for the first and second quarters of 2020 will be merged, the new deadline for submission will be the 1 September 2020.
The semi-annual VAT payment and reporting deadlines for the first and the second half of 2020 are also merged; the new reporting and payment deadline is 1 March 2021.
On 20 April 2020, the Danish government agreed on new tax measure to provide the liquidity of companies in times of the crisis:
Measure 1: Company tax account (Skattekontoen)
The limit for tax account balance of companies was increased from DKK 200,000 to DKK 10 million.
Companies with excess liquidity can indicate an unlimited amount on the company tax account to avoid negative interest while easing the pressure on the public finances.
Measure 2: Tax credit for Research and Development (R&D)
Loss-making companies can receive a tax credit for their research and development costs.
The payment of this tax credit is now advanced to June 2020 instead of November 2020. Usually these tax credits have to be paid in November when the final tax for the companies has been assessed. This was now advanced to June.
Measure 3: Interest-free VAT and payroll tax “loans” to certain companies
Companies liable for VAT with an annual revenue of less than DKK 5 million that paid VAT for the second half of 2019 at 2 March 2020 and VAT-liable companies with an annual revenue between DKK 5 million and DKK 50 million that paid for Q4 2019 at 2 March 2020 may be refunded their VAT payment as an interest-free loan.
Further, VAT-exempted entities 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 15 April 2020 may have the amount of tax returned to them as a “loan,” plus a quarterly share constituting ¼ of the taxable profit for 2019. The loan must be repaid on or before 1 April 2021.
Companies may request the loan from 4 May until 15 June 2020. In total, the interest-free loans may amount to DKK 35 billion.
ESTONIA
The VAT payment duties for taxpayers in Estonia will be delayed until 1 May 2020. Returns still have to be submitted in time while VAT assessments are suspended.
FINLAND
Finnish Tax Authorities have introduced a variety of actions to support businesses during the COVID-19 epidemic.
Since 15 March 2020, tax authorities will waive VAT payment penalties and the penalties won’t be collected. Further, companies can apply for payment holidays.
NOTE: that Returns must still be filed at the same date as before.
- In case of payment difficulties, it is possible to apply for payment arrangements.
- The scope of e-invoicing will be extended to B2B transactions in Finland from April 2020.
From 1 April 2020, private companies will have the legal right to demand electronic invoices from their suppliers in a format that meets European and Finnish standards.
FRANCE
The tax measures in France cover the following areas:
- Businesses can apply for a suspension of their tax payments due in March 2020
- Tax rebates can be granted for companies which struggle with difficult situations due to the COVID-10 crisis
- Deferral of direct tax payments for companies
- Postponement of social security payments
- Postponement of payment of instalments of direct taxes for companies of three months (without any penalties) – this does not include VAT, assimilated taxes or withholdings of individual income taxes of employees
- Faster refund of VAT credit repayments for requests filed electronically
- There is an automatic extension to the 30-day deadline to answer information requests made by the tax authorities.
- Companies may postpone all direct tax payments due for the months of April, May, and June 2020.
- The rules have been expanded concerning the “commitment to responsibility” of large groups (in general, rules limiting dividend distributions in 2020).
- The deadlines for filing corporate income tax returns for 2019 are delayed to 30 June 2020.
- The deadline for electing for the consolidated tax regime has been delayed generally until 30 June 2020.
- The filing deadline for final returns for the CVAE (business contribution on added value) filed on form #1329 DEF has been extended, for some until 30 June 2020.
- The deadline to submit election letter for the corporate income tax regime has been extended.
NOTE: VAT returns still need to be filed as usual!
GERMANY
Update: The German government has agreed on reducing the standard VAT rate from 19% to 16% and the reduced VAT rate from 7% to 5%. This reduction will be effective from 1 July 2020 and last until 31 December 2020.
The German tax authorities announced that they would offer businesses the possibility to apply for delayed tax payments. The new deadline will be 31 December 2020.
If you want to get such a delay as well, you will need to proof the necessity of it. Basic evidence on how the crisis affects your business is enough. Other measures are:
- Deferral of VAT payments
- Deferral of personal and corporate incomes tax
- Reimbursement of special advance payments for the permanent extension
- Financial aid for companies in financial difficulties
- Extension of submissions deadlines
- Tax exemption of special payments to employees of up to €1,500
- Postponement of of the deadline of wage tax returns
Further, tax prepayments shall be reduced whenever it becomes clear that the income in the current year will be lower than in the previous year.
GREECE
The Greek government introduced the following measures to support business during the corona crisis, more measures are expected to be announced soon.
- Suspension of the payment of VAT amounts due by the end of March by 4 months.
- Postponement of the collection of VAT debts for companies affected by the coronavirus
- A 25% reduction of assessed liabilities on installments of tax payments that are due between 30 March 2020 and 30 April 2020 – VAT and withholding taxes are not eligible for this reduction)
- Extension of the deadline for payment of VAT
- Extension of the deadline or suspension of the payment of certified debts to the tax authorities and of instalments of tax debts
- Businesses affected by the corona virus can postpone their VAT payments which are due up to 30 April 2020 until 31 August 2020
- Extension of the deadline or suspension of the payment of certified debts related to social security contributions and of instalments of social security contribution debts
- Certain freelancers, self-employed contractors will be eligible for compensation payment of €800 while the tax payments due in March will be extended for 4 months
- Reduction of the VAT rate from 24% to 6% for certain products which help to protect against corona (e.g. masks, gloves, etc.)
- Automatic suspension of certain tax and social security liabilities
HUNGARY
Measures of the Hungarian government:
- Payment moratorium for loans, credit and financial leasing agreements
- Rental agreements in the fields of tourism, hospitality, entertainment, gambling, cinema, performing arts, event organisation and sports services may not be terminated before 30 June 2020.
- Small taxpayers providing passenger transport services (e.g. taxis) are exempt from their tax liability for the months of March, April, May and June 2020.
- The change of the XSD scheme to be uploaded to the online billing system is postponed.
- The update of the Hungarian live invoice reporting scheme is postponed from 1 April to 1 July
- New surtaxes apply and will be levied on credit institutions and the retail sector
- The update of the Hungarian live invoice reporting scheme is postponed from 1 April to 1 July
April 29: A decree includes relief with regard to certain financial reporting obligations and also concerning certain tax requirements in response to the coronavirus.
a) The deadline for the preparation, deposit, publication and submission of annual reports by certain entities is extended to 30 September 2020.
b) Taxes for which calculations are based upon data from an annual report, the deadline to submit and settle the tax obligations is now 30 September 2020.
c) The tax rate of the social tax will be reduced (from 17.5% to 15.5%) as of 1 July 2020.
d) The threshold amounts for the taxation of fringe benefits will be changed.
IRELAND
On 13 March 2020, the Irish Revenue announced that small and medium-sized businesses experiencing cash flow difficulties would not have interest applied on late VAT payments, for the current VAT return period of January and February 2020. Please click here for the full Irish Revenue press release.
Small and medium-sized enterprises (SMEs)*
- Tax returns: Companies experiencing temporary liquidity problems should continue to file tax returns on time.
- Interest: The application of interest on arrears is suspended for VAT in January/February and for employers’ liabilities in February and March.
- Debts: All enforcement activities are suspended until further notice.
- Tax release: The current tax release status will remain in place for all companies in the coming months.
Larger companies (non-SMEs)
Enterprises other than SMEs that are experiencing temporary liquidity or trading difficulties should contact the General Assembly Office at [(01) 7383663] or contact the relevant tax office in the Large Enterprise Department or in the Small Business Department directly.
The Irish government announced on 24 March 2020 measure to give wage and other financial support to Irish companies and workers. Here you can find more about it.
ITALY
NOTE: On 22 March, the Italian government has suspended all industrial and commercial activities (the only exceptions are system relevant areas) from 23 March und 3 April 2020.
On 13 March 2020, the Italian Ministry of Finance announced:
- Small businesses (annual turnover of less than €2million) are allowed to postpone their VAT payments until 31 May 2020 if they are resident taxpayers
- All filings will be postponed to 30 June (incl. annual VAT return 2019)
- Businesses can apply for a five-month payment plan
The deadlines for tax obligations between 8 March 2020 and 31 May 2020 for taxpayers with a domicile, registered office or operations centers in Italy are postponed to 30 June 2020:
- Annual VAT Return 2019 (original deadline: 30 April 2020; new deadline: 30 June 2020)
- First quarter of 2020 TR form for quarterly refund claim (original deadline: 30 April 2020; new deadline: 30 June 2020)
- First quarter of 2020 quarterly communication of VAT settlements (original deadline: 1 June 2020; new deadline: 30 June 2020)
- First quarter of 2020 communication of cross-border transactions (original deadline: 30 April 2020; new deadline: 30 June 2020)
Important for non-resident businesses:
- Intrastat declarations for February, March and April – deadline: 30 June 2020
- Annual VAT return – usual deadline
- VAT declaration February, March, April – usual deadline
- VAT payment February, March, April – usual deadline
19 May 2020 Relaunch Decree
This Decree must be converted into law within 60 days. It includes several tax and vat relief measures, like:
a) VAT rates (both standard, 22%, and reduced, 10%) will be decreased as of 1 January 2021
b) Introduction of “super-reduced” VAT rate of 5% for medical goods and other items which are required to fight the corona virus
c) Extension of certrain deadline for tax and social security payment
LATVIA
The Latvian government has so far implemented the following changes to provide liquidity and tax relief during the crisis.
- Taxpayers affected by the crisis can apply for an extension of the tax payment deadline. To do so, an application, which will be reviewed by an official body, must be submitted within two months of the due payment deadline or the date of entry into force of the law.
- Current and overdue tax payments can be delayed for up to three years – instalment payments are also possible without triggering late-payment penalties (Application required)
- Support for “employee downtime” from the government
- Companies can apply for a deferral of the tax until 30 June 2020.
- VAT credits on submitted declarations will be refunded within 30 days and not at the end of the year, in order to increase the liquidity of those concerned as quickly as possible.
LITHUANIA
The measures for the Lithuanian government so far can be divided into 2 sub-categories: the corporate tax and the individual tax.
Corporate tax relief
- deadline for filing advance corporate income tax returns and making payments of tax is deferred until 30 March 2020
- Postponement of current and overdue tax payments, for up to three years, or the ability to make instalment payments when the delay is related to COVID-19 without triggering late-payment penalties
- taxpayers are being allowed the ability to revise their advance corporate income tax calculation methods
- Postponement of real estate tax payments to be allowed by municipalities
- Submissions of financial statements (annual report and consolidated annual report) may be made later than the legal deadline (three or four months, respectively)
Individual (personal) tax relief
- deadline for submitting their annual income tax returns and for remitting payments of tax is extended until 1 July 2020 (instead of 4 May 2020).
- the electronic version of the new tax return form GPM311 will not be released now until at least April 2020.
LUXEMBOURG
Companies and self-employed individuals in Luxembourg that are facing liquidity issues due to the corona crisis can request financial help. Further, eligible taxpayers can file a request for:
(1) cancellation of the first and second quarterly advance payments for both (corporate) income tax and municipal business tax for 2020; and
(2) a four-month extension to the deadline for the payment of (corporate) income, municipal business and net wealth taxes due after 29 February 2020, without any penalty for late payment. The tax authorities will automatically approve all eligible requests.
Plus, the deadline for filing corporate and individual (personal) income tax returns is postponed to 30 June 2020.
NOTE: The Government Council of Luxembourg has approved a law which would forbids the deductibility of interest and royalties paid or due to related entities located in a country listed on the EU “blacklist.”
UPDATE: On 12 May 2020, the Luxembourgian tax authorities announced the end of the tolerance period for the late submission of VAT returns (so for the returns of January and February 2020). Therefore, all missing VAT returns should be filed as soon as possible to avoid penalties.
MALTA
The Maltese government, in addition to other measures, is offering a tax moratorium in response to the corona crisis.
- Postponement of VAT payments which fall due in March and April 2020
- Employers and self-employed people are being granted a two-month extension on the payments of any provisional tax, VAT and national insurance contribution
NOTE: Deadlines for filing remain unchanged!
NETHERLANDS
The Minister of Social Affairs and Employment on 31 March 2020 announced the conditions for a compensation program available for employers that expect and ultimately experience a decline in turnover of 20% or more as a result of the coronavirus (COVID-19) pandemic – the so-caleld NOW program.
This program includes compensation for a decline in turnover and amounts to 90% of the eligible payroll costs.
Further, the final subsidy amount will be reduced if:
- The actual payroll during the period March through May 2020 is lower than three times the payroll for the first payroll tax period of 2020 (usually January 2020), and/or
- An employer submits, after 17 March 2020, one or more applications to make one or more employees redundant for economic reasons.
Other measures:
Companies which face financial difficulties in times of the coronavirus will be eligible for a deferral of tax payments. The respective taxpayers need to submit a written request for the deferral of tax payments. As soon as the business has filed the request, the Dutch tax authorities will hold off on collecting corporate income tax, payroll tax, value added tax (VAT), and individual (personal) income tax.
The tax collection deferral will apply for a period of three months. Deferrals longer than 3 months are possible but will be checked more in details to evaluate if this is still due to the COVID-19 crisis.
Further, since last Monday, the interest for all tax debts is reduced 4% to 0.01%. Recovery interest is normally due if an assessment is not paid on time. This reduction will be valid from 1 June 2020, only the effective date for income tax is one month later, namely 1 July 2020.
Also, the Dutch Customs authorities have postponed the requirement for an entity to be established in the EU in order to act as exporter for customs purposes.
April 28: Six new tax measures were announced to provide relief to businesses:
- Reduction of the “normative salary” standard in the event of a decline in turnover
- Easing the “hours criterion” for self-employed people which requires entrepreneurs to spend at least 1,225 hours per year on their business in order to qualify for a deduction
- The work-related costs rules under which employers can provide certain untaxed reimbursements for employees
- “Corona tax reserve” for corporate income tax purposes
- Postponing the effective date of measures concerning excessive lending by a taxpayer’s own company
- Mortgage payment holiday for taxpayers who notify (or notified) their lenders between March 12 and June 30, 2020, and agree to a mortgage payment holiday of a maximum of six months
April 29:
Deferral of payment for tax debts
Special deferral of tax payments can be granted to businesses that are temporarily facing liquidity problems due to COVID-19:
- Deferral shorter than three months: It was approved that companies could, upon request, obtain a three-month deferral for almost all types of tax payments.
- Deferral longer than three months: Requests for deferral of payment of more than three months may be granted for requests submitted in writing and are subject to certain conditions.
- Other approvals: The policy statement also points out that authorisations for other types of deferral do not preclude the granting of a specific deferral.
Payment default penalties
Businesses that are granted a special deferral of payment under the policy statement are not to be assessed with a default penalty from 12 March 2020 to the date when the granted tax payment deferral ends.
Tax collection
The statement of principles deals with the effects of the exemption on various tax collection arrangements (including the seizure of the taxpayer’s property) and with the liability of corporate directors when the legal person is granted a deferral of payments for its inability to pay.
6 May:
New measures and statements were introduced which replace and update prior statements of corona tax relief measures:
a) Corona tax reserve for corporate income taxpayers for all losses due to the COVID-19 pandemic. This means that the expected loss for this year can be used to arrive at a lower assessment for 2019.
b) Director-major shareholders do have to receive at least a normative salary. This salary can be lower if the turnover is lower due to the crisis.
c) Employers are allowed to use the fixed exemption in the work-related costs rules in order to give employees untaxed reimbursements and provisions.
d) Energy tax, surtaxand VAT for supplies of natural gas and electricity from April 2020 to June 2020 is payable until October 2020 (when the additional invoice is issued).
NORWAY
The Norwegian government has introduced various measures for a smooth handling of taxes, returns and payments during the COVID-10 crisis.
Parliament adopted two state-supported credit and guarantee schemes totalling NOK 100 billion (~ USD 10 billion) to ensure liquidity for Norwegian companies.
In order to be able to guarantee liquidity to a large extent, extensive measures have already been taken, especially in the areas of direct and indirect tax:
- Under certain conditions, companies that are in a loss position in 2020 may carry back the losses of that year against the taxable profits of the two previous years. Compensation for corporate losses of up to NOK 30 million in 2020 is permitted.
- Individual entrepreneurs, traders and certain other entrepreneurs who would have to pay the first instalment of the tax advance payment for 2020 on 15 March 2020 have been granted an extension until 1 May 2020.
- Owners of companies that are in a loss situation in 2020 may postpone payment of the net wealth tax in relation to the value of the companies’ assets.
- The reduced VAT rate was lowered from 12% to 8% from 1 April to 31 October 2020.
- Payment of the social security contribution originally due on 15 May 2020 is postponed until 15 August 2020.
- Payment of the second instalment of the advance tax payment for companies, originally due on 15 April 2020, is postponed to 1 September 2020.
POLAND
The Polish government has recently adopted a package of measures to help individuals and businesses dealing with administrative and financial problems during the corona crisis. The government has taken the following measures in this regard:
- Facilitation of social security payments in the form of deferrals and assistance with outstanding payments.
- State funding of payments of social security contributions for three months for
a) micro-enterprises registered before 29 February 2020 and employing up to nine employees (contributions for all employees)
b) self-employed people and contractors, if they were employed before 1 February 2020 and their monthly income from business activities in February 2020 did not exceed 300% of the expected average gross monthly salary in 2020
- payment of guaranteed monthly contributions (not taxable and not subject to social insurance) by the Polish Social Insurance Administration to self-employed people and employees with a mandate contract (at 80% of the minimum wage)
- The filing of the income tax return (PIT) has been postponed from 30 April to 30 May.
- The deadlines for filing CIT-8 declarations by taxpaying companies and the payment of the corporate income tax amount due for 2019 have been extended to 31 May 2020 for all taxpayers.
- For taxpayers who have only tax-free income or whose income consists of income from public interest works (at least 80%), the deadline for submitting the return has been extended to 31 July 2020.
c) For taxpayers that realized only tax-exempt income or whose revenue consisted of revenue from work for public benefit (at least 80%), the deadline for submitting tax returns is extended until 31 July 2020.
The package containing those support measures was already introduced, it is reffered to as the “financial shield”.
UPDATE: Poland ‘s measures for economic support for small and medium-sized enterprises (SMEs) and micro-businesses were lately approved by the European Commission. Everyone can benefit from it who has a decline in turnover of at least 25% compared to the month before (any month after 1 February 2020)or to the corresponding month in the previous year. The amount of the economic subsidy depends on the turnover in 2019 and the extent of the decline in sales.
This subsidy is granted as an interest-free loan and the upper limit is PLN 3.5 million (ca. €77,000) per company. It is meant to be used for covering current operating costs and it may be used for early repayment of loans.
PORTUGAL
The Portuguese government has introduced a various of (tax) measure to handle the COVID-19 crisis as good as possible. There are various tax relief measure already in place:
- Relief on corporate income tax, individual income tax, VAT + social ocntributions
- Monthly filing of a stampt duty tax return delayed to 1 January 2021
- A VAT exemption applies with regard to “free of charge” supplies of goods made to the government, to private social institutions, and to non-governmental non-profit organizations.
- Businesses which have to fulfil tax duties in Portugal can make their payments in instalments and deadlines for declarations, returns, etc. can also be made later.
- Filing the corporate income tax return (Modelo 22) for 2019 can be submitted until 31 July 2020, the “normal” deadline would be 31 May. No penalties need to be feared.
The special payment on account of the corporate income tax to be made in March can be made until 30 June 2020. No penalties need to be feared as well.
The first payment on account and the first additional payment on account to be made in July, can be made until 31 August 2020. Again, no penalties
- Withholding taxes payments as well as monthly and quarterly VAT payments can be made in instalments, if
- Companies/self-employed workers had a turnover below € 10 Million in 2018. They will apply automatically for this kind of payment. This also includes businesses or self-employed workers who have started their activity since 1 January 2019.
- Companies/independent workers with a turnover higher than that will need to apply for this payment in instalments and this is only possible if the decline in sales is in average at least 20% of 3 months compared to the same months of the previous year.
In both cases, and not only for withholding taxes but also for VAT payments, there are 2 different options regarding the payment in instalments:
Option 1: 3 monthly instalments without interest
Option 2: 6 monthly instalments, with interest on arrears only in the last 3 months
In short, companies affected by Covid19 can stagger their VAT payments over 3 months (without interest) or 6 months (with interest for the additional 3 months).
This measure automatically applies to companies whose turnover in 2018 was less than 10 million euros. Businesses with a higher turnover must apply for the payment in instalments and prove that their turnover in the first quarter was 20% lower than in 2019.
UPDATE:
Since May, taxpayers are allowed to postpone the filing of the annual simplified business information return (IES/DA) to 7 August 2020 and the filing of the tax file and transfer pricing documentation to August 2020.
VAT measures:
a) New submission and payment deadlines for monthly and quarterly VAT Returns:
- The monthly VAT Return for March 2020 has to be submitted by 18 May 2020 and the according VAT payment is required by 25 May 2020.
- The monthly VAT Return for April 2020 has to be submitted by 18 June 2020 and the according VAT payment is required by 25 June 2020.
- The quartlery VAT return for January to March 2020 has to be submitted by 22 May 2020 and the according VAT payment is required by 25 May 2020.
b) The monthly VAT returns and the quarterly one can be calculated based on information available from the electronic invoicing system (e-factura).
Subsequent adjustments can be filed with the substitution VAT return (this won’t lead penalties) by certain eligible taxpayers. This is only valid if these adjustments are made by August 2020. Eligible are taxpayers with a turnover of up to € 10 million in 2019 or with no turnover at all as the business started/restared the business activity after 1 Janaury 2020.
ROMANIA
As a result of the COVID-19 pandemic, the Romanian authorities have declared the state of emergency on 16 March 2020 and have delayed the deadlines for certain tax duties
- All VAT and tax audits postponed
- The deadline for the VAT return for February is postponed from 25 March to 25 April 2020.
- There are deferrals for the payment deadline of local taxes from 31 March to 30 June 2020.
The following measures will end 30 days from the end of the state of emergency.
- All tax obligations with a due date after 21 March 2020 and which are not/have not been paid are not considered unpaid and consequently there won’t be any delay interest or other penalties.
- All tax-related procedures in connection with garnishments are suspended.
SLOVAKIA
In Slovakia, some measures are not yet in force, but the following changes for a smooth handling of taxes during the corona crisis are already valid:
Companies and private individuals will get an automatic tax payment deadline extension of up to three months.
Postponement of the deadline for VAT payments.
Late payment of taxes won’t lead to penalties or interests.
SLOVENIA
Starting 29 March 2020, several tax measures were introduced in Slovenia in response to the coronavirus.
These measures include:
- Postponement of deadline for the submission of tax returns for self-employed entrepreneurs, corporate income tax returns and annual reports to 31 May 2020.
- Postponement of deadline for issuing tax calculations for individual taxpayers for 2019 until 30 June 2020. Individuals who will not receive their tax calculation for individual (personal) income tax for 2019 by 15 July 2020 will be granted a postponement for filing their annual tax returns until 31 August 2020
- Postponement of the payment of tax liabilities (for up to 24 months) or the possibility to pay in instalments (same time period)
A second tax measures package was introduced by the Slovenian government to reduce the impact of the COVID-19 pandemic.
As of 1 May 2020, the following measures came into force:
- Additional relief for donations made by corporate and individual taxpayers
- A temporary VAT exemption on supplies and the acquisition of protective and medical equipment
- Individual income tax relief for income earned outside Slovenia
SPAIN
The Spanish government has introduced various measures to keep the country running and to support businesses. Despite guaranteeing the provision of essential services like water, gas, electricity, telecommunication, etc., there are various measure to support businesses and private taxpayers in times of the crises.
- Securing liquidity for companies and the self-employed people, primarily through bank financing which are secured by the government.
- Extension unemployment protection and granting exemptions from social security contributions.
- Economic compensation for self-employed persons who have stopped their business activities as a result of the crisis or who face a drastic drop in income.
- Adapting the corporate regulations for Spanish companies, mainly in terms of managing bodies, preparation and approval of annual accounts and audits.
- Possibility to opt for a deferral of “small” past-due tax debts in respect of state-level taxes
- Support for small and medium-sized enterprises with regard to research and development (R&D) and financing the transition to home office.
A decree-law was published in the official gazette on 1 April 2020 and almost all the measures included will remain effective until one month after the end of the state of emergency.
It contains a new set of economic and social measures:
The content can be divided into the following 3 principles:
- Comprehensive packages of measures which support workers, consumers, families and the most vulnerable groups
- Initiatives to support production and employment
- Flexibility measures for certain activities and administrative processes
April 30:
The so-called Royal Decree-Law, published on 22 April 2020, includes new supplementary economic and tax measures in times of COVID-19.
It contains a deferral of rental payments or industrial premises when the lessors are major property owners or public companies.
There is also mechanism for installment payments regarding corporate income tax and reduced VAT rates for medical supplies, electronic books, magazines, and newspapers.
Workers whose employment contracts have been terminated as from 9 March 2020 and workers who resigned since 1 March 2020 and were relying on a job offer which was then withdrawn are now also getting unemployment benefits
SWEDEN
With the Swedish government announcing a package of measure worth more than 300 billion SEK (about $ 31 billion), various tax measures were introduced to support the local economy. However, in terms of social distancing, Sweden goes its own way with almost no restrictions or regulations in public spaces.
Now back to the taxes and other deferrals and measures:
- Companies may delay VAT and other tax payments
- Employer’s social security contributions can be postponed
- Preliminary taxes on salary can be postponed
- Quarterly/monthly VAT return payments can be postponed
The extension applies for businesses for three months of tax payments, but it can be extended to up to 12 months. Either way, it is necessary to apply for this postponement at the tax authorities.
- Interest (currently at a rate of 1.25% per annum) and a fee of 0.3% per month would be levied on the deferred amount of tax during the extension period.
- Companies which already have high tax debts cannot apply for the extension
- These regulations shall be in effect on 7 April 2020 and are meant to be applied retroactively from 1 January 2020. Therefore, tax payments from January to March 2020 can be refunded. If you are affected, get in touch with the Swedish tax authorities!
Small Update: The Swedish Ministry of Finance announced a consultation for a proposed withholding tax on dividends in late April.
SWITZERLAND
The Swiss tax authorities introduced the following tax and VAT measures to absorb some of the economic impacts of the COVID-19 crisis.
- New deadlines for tax returns 2019. The income tax return deadline has been postponed from 31 March 2020 to various other dates – depending on the canton.
- The deadline for filing the 2019 tax return for individuals is extended to 30 June 2020
- The deadline for filing the 2019 tax return for legal entities is extended to 30 September 2020
- Filing deadline for tax returns of individual taxpayers is postponed to 31 May 2020
- Individual and corporate taxpayers who cannot pay their tax payments as a result of the corona virus can apply for deferring payments or payments in instalment. It is necessary to apply at the municipal tax administration.
- Companies and individuals who expect a loss of income can request an adjustment of their provisional tax bill for cantonal and municipal taxes.
- The default interest rates for VAT, custom duties, federal income tax and special excise duties are reduced to 0% until the rest of the year. This is already in force.
- Companies and self-employed individuals can apply for a postponement of the payment of their social security contributions. This is free of interest and it’s also possible to reduce the recurring on-account payments for these social security contributions.
- VAT and customs payment holidays until the end of 2020 are also possible under certain conditions.
- No tax bills and tax assessments will be sent out until 30 April 2020.
- The deadline for applications for tariff corrections for source taxes is delayed to 30 June 2020
UNITED KINGDOM
The tax relief includes deferral of certain value added tax (VAT) and income tax payments. HMRC has allowed businesses affected by the Corona virus to defer payment of other taxes under “time to pay arrangements.”
The UK Government has taken the following measures to best maintain the economy and support affected businesses and individuals during the crisis:
- a Coronavirus Job Retention Scheme
- deferring VAT and Income Tax payments
- a Self-employment Income Support Scheme
- a Statutory Sick Pay relief package for small and medium sized businesses (SMEs)
- a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
- small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
- the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
- a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
- the HMRC Time To Pay Scheme
UK VAT-registered businesses with a VAT payment due between 20 March 2020 and 30 June 2020 can
- Defer the payment until a later date, or
- Pay the VAT as normal
Taxpayers with income tax payments due on 31 July 2020 may defer these payments until 31 January 2021. The HMRC will not automatically impose penalties or interest for late payments.
Here you find further information about those measures and where to apply.
