COVID-19 Global Measures continued

07 July 2020

Navigating global incentives and guidance in challenging times 

We provide in the list of countries alphabetically from M to Z below a broad outline of the Global responses from different Governments in relation to the Covid-19 pandemic.

Updates for Countries A to L can be found here

Malaysia

Government Link:

FAQ APA Treatment

Link to article:

Baker Tilly Malaysia's Insight June 2020 Issue

Key Measures:

  • IRB Issues FAQs on advance Pricing Arrangement treatment due to COVID-19 pandemic.

Malta

Link to article:

Malta Fiscal Response Package Covid-19

Key Measures:

  • European Commission approved a Maltese aid scheme to support investments in the production of COVID-19 relevant products, including vaccines, ventilators and personal protective equipment.

Mauritius

COVID-19: main tax and non-tax amendments in Mauritius

Link to article:

Budget 2020-1: Main tax measures

Key Measures:

  • The Mauritius Revenue Authority (MRA) is exceptionally allowing companies with a financial year ending on 31 December 2019 to file their corporate tax return based on unaudited accounts by 26 June 2020. However, if an amended return has to be submitted following any change in the figures after the completion of the audit, no penalties will be charged for late submission of the return if filed by 31 August 2020.

Mexico 

Government Link:

Bank support COVID-19

State Tax Measures and reliefs                           

Legal Guide for COVID-19

Economic Measures for Employee Support

Social Security Contribution Support

Link to article:

COVID-19 Live Interview – Which direction to take? (19 June 2020, in local language)

Key Measures:

  • The Tax Administration Service (Servicio de Administración Tributaria, SAT) has published Q&As to address the application of rule 3.17.4., introduced by the fifth version of the First Amending Resolution to the Miscellaneous Tax Resolution for fiscal year 2020, by means of which individuals are given the possibility to pay income tax due in 2019 in up to six monthly instalments.
  • No CIT or VAT deferrals, reductions or reliefs have been granted
  • Social security contributions (25% as an average of payroll costs) can be paid 12 to 24 months after the state of health emergency is lifted
  • Local incentives for State taxes such as payroll and lodging are available
  • Accelerated VAT Refunds and trade and customs facilitations are in place
  • Temporary support from Banks for natural and legal persons
  • The Mexican Social Security Institute (IMSS) announced employers may request an instalment agreement for the payment of social security contributions debts, under one of the following payment schemes:
  • up to 12 monthly instalments, at a monthly interest rate of 1.26%;
  • from 12 to 24 monthly instalments, at a monthly interest rate of 1.53%; and
  • from 24 to 48 monthly instalments, at a monthly interest rate of 1.82%.
  • Employers requesting an instalment agreement are required to make a down payment of 20% of the social security contributions due by the employer and of 100% of the social security contributions due by employees.

Montenegro

Link to article:

Covid-19-virus relief measures

Key Measures:

  • Delay of payment of loans received from financial institutions for all citizens and companies on the period of 90 days.
  • Delay of payment of taxes and contributions on salaries on the period of 90 days.
  • Loans for liquidity of the companies up to 3 mill euros – grace period 2 years at interest rate 1,5%.

Morocco

Government Link:

Government website

Tax Circular on tax treatment of assistance allowance

Link to article:

Tax administration confirms that advances on shareholders’ current account should be subject to registration duties

Impact of Covid-19 on the Continuity of Company’s Operations

Key Measures:

  • The CNSS has announced the cancellation of penalties and surcharges for late payment of contributions for the benefit of affiliated companies. This amnesty is conditional upon payment of the principal with the possibility of instalment payments.

Netherlands

Government Link:

Government of Netherlands

Coronavirus: Dutch government adopts package of new measures designed to save jobs and the economy

Coronavirus: additional measures introduced on 23 March

Link to article:

Update on the VAT Quick Fixes

NOW 2.0 scheme published

Bill: Restricting borrowing from your own company

Wages sacrifices in times of corona

Key Measures:

  • The Dutch State Secretary for Finance announced the extension of the reporting deadline under Directive 2018/822  (DAC6) from 1 July 2020 to 1 January 2021.
  • Government expands and extends emergency measures to reflect the following changes:
    • an expansion of the fixed allowances that may be granted tax free.
    • an additional condition for payment deferrals exceeding 3 months.
    • the tax-free compensation for fixed costs is added.

New Zealand

Link to article:

Strategies to survive a downturn

Restructuring and redundancies

Tax Talk | A host of new tax measures – both COVID-19 and ‘normal’

Tax Talk | Purchase price allocation

Tax Talk | Feasibility expenditure

Tax Talk | Alignment of tax treatment of non-property leases with NZ IFRS 16

Key Measures:

  • Temporary tax loss carry-back regime allowing tax losses to be carried back 1 year.
  • Increased administrative flexibility for Inland Revenue to modify due dates for filing tax returns and making tax payments for taxpayers impacted by COVID-19.

Norway

Government Link:

Economic measures in Norway in response to COVID-19

VAT Support due to COVID-19

Link to article:

New loan scheme improving liquidity for Norwegian companies for the coming three years

Compensation scheme for firms with reduced revenues

Overview of measures to mitigate effects of Covid-19

Key Measures:

  • Companies that are in a loss-making position in 2020 will be able to carry back losses for that year against the taxable profits for the two previous years.
  • Payment of the second instalment of advance tax payment for companies is postponed until 1 September 2020.
  • The “lower rate” of VAT has been reduced from 12% to 8% for a limited period from 20 March until 31 October 2020.

Pakistan

Key Measures:

  • The Sindh and Balochistan provincial tax authorities have extended the filing and payment deadlines for Sales Tax and Federal Excise on Services for May 2020.
  • Major tax proposals of the recent Budget, which will generally apply from 1 July 2020, are summarized below:
  • Corporate taxation
  • decrease in depreciation deduction by 50% for assets in use for the first time on or after 1 July 2020;
  • increase in deductibility threshold for aggregated non-banking expenditure under a single account from PKR 50,000 to PKR 250,000 and from PKR 10,000 to PKR 25,000 for single payments;
  • increase in deductibility threshold for non-banking payments of salary from PKR 15,000 to PKR 25,000 per month; and
  • restriction on deduction of profit on debt payable of PKR 10 million or more to associated enterprise by a foreign-controlled resident company.
  • Personal taxation
  • Capital gains derived by a resident individual from the sale of his personal residence are exempt, subject to various conditions
  • Withholding tax
  • abolishment of withholding tax on 9 sectors (education, steel smelters, functions and gatherings, cable operators and other electronic media, insurance, tobacco, etc);
  • increase in turnover threshold from PKR 50 million to PKR 100 million for associations of persons and individuals, and a similar threshold of PKR 100 million will be prescribed for a sales tax registered person to become a withholding agent for the purpose of withholding tax on payments for goods, services and contracts;
  • exemption of withholding tax on cash withdrawal to the extent of foreign remittances; and
  • collection of advance tax on auctions of immovable property in instalments.
  • Capital gains tax on immovable property
  • the different treatments for open plots and constructed property will be removed;
  • the holding period for all types of immoveable property will be limited to 4 years and the taxable gain will be reduced by 25% for every year of holding; and
  • the tax rates will be reduced by 50%.
  • Sales tax
  • extension of exemption period for COVID-19 health-related items and equipment;
  • increase in minimum threshold of supplies by retailers for obtaining CNIC of buyers from PKR 50,000 to PKR 100,000;
  • reduction of tax rate from 14% to 12% for retailers integrated online with the tax authority through their Point of Sale system; and
  • conducting of audit proceedings through electronic means.
  • Excise duties
  • Numerous changes have been proposed to the rates of excise duty on a variety of goods, including the increase in excise duties on tobacco products and the reduction in duties on cement.
  • Customs duties
  • numerous reductions and exemptions for a variety of sectors and products, including COVID-19 related items; and
  • enhancement to the scope of concessions available to Special Economic Zones.

Panama

Government Link:

COVID 19 News

Presidential Communication

Key Measures:

  • Government Extends Deadlines to File Individual and Corporate Income Tax Returns and pay property tax to 17 July, the filing deadline for Transfer Pricing Documentation is extended to 30 September.

Peru

Link to article:

AFP: From July 1 to July 16 you can request your 25% withdrawal

Requirements to reschedule your debt with a 20% discount

Congressional Economic Commission: approved full refund of contributions to the ONP.

Peru will guarantee credits less than S/. 20 thousand

Perception of VAT for importation of fraud-sensitive goods approved

Key Measures:

  • SUNAT postpones filing and payment deadlines for “non main national taxpayers” according to the net taxable income received during fiscal year 2019.

Poland

Government Link:

Polish Government Coronavirus

Link to article:

Summary of regulations of the “Anti-Crisis Shield 4.0”

Financing of expenses for accommodation and travel of posted employees by the employer

Anti-crisis shield 4.0 will introduce changes in tax settlements

Minimum tax in the CIT-8 annual settlement

Anti-crisis shield 4.0 - subsidies from the budget to interest for companies

Portugal

Government Link:

Government and COVID-19

Tax Measures and Legislation

Law 2/2020 (in local language)

Link to article:

Transfer Pricing | Documentation Delivery

SIFIDE | New application deadline in 2020

Financial restructuring and the need for PER in Covid-19

Covid-19 | Employment Protection Measures

New Extraordinary Investment Tax Credit II (CFEI II)

Support for companies processing fish and aquaculture products

Covid-19 Publications (central resource updated as of 17 June 2020)

Key Measures:

  • The government has presented a new draft bill to respond to the consequences of the COVID-19 pandemic by granting specific tax incentives for companies affected. The most relevant tax features of the draft bill are as follows:

Corporate income tax (CIT) – carry forward of tax losses

  • An extended period of 10 years (instead of 5 years) for the carrying forward of tax losses for taxable years commencing in 2020 and 2021.
  • The possibility of using tax losses against 80% (instead of 70%) of taxable profits.
  • Non-consideration of tax years 2020 and 2021 for the computation of the time limit for the use of prior tax losses still available at the beginning of 2020, i.e. the carry-forward period is technically suspended.

CIT – payments on account

  • Payments on account by companies with a decrease of monthly turnover on the first semester of at least 20% - the taxpayer can waive up to 50% of the first and second 2020 payments.
  • Payments on account by companies with a decrease of monthly turnover on the first semester of at least 40% (or less, if more than 50% of turnover of the prior year resulted from activities in relation to the hospitality industry) - the taxpayer can waive up to 100% of the of the first and second 2020 payments.

Special investment tax credit

  • A CIT credit of up to 20% of the eligible costs is allowed for investment expenses incurred between 1 July 2020 and 30 June 2021.
  • The eligible costs are capped at EUR 5 million, i.e. the maximum tax credit is limited EUR 1 million. The tax credit is also limited to 70% of the corporate income tax due, but may be carried forward for 5 years.
  • The regime limits the termination of employment contracts throughout the period of the tax credit is applied and for the next 3 years.

Restructuring of micro, small and medium-sized companies (SMEs) in 2020

  • Acquisition of SMEs. Under specific conditions, the acquired entity qualifying as a "company in difficulties" can transfer its tax losses to the acquiring entity in the proportion of the share capital held and capped at 50% of the annual taxable profits of the acquiring company. The regime provides limitations to the termination of employments and also the non-distribution of profits during 3 years.
  • Restructuring of SMEs. In the case of tax neutral mergers of non-related qualifying SMEs with similar activities (when 50% of their turnover corresponds to the same economic activity), tax losses available to be carried forward by the merged company can also be offset by the merging company against its taxable profits. In such cases, the state surtax is waived for a period of 3 years.

On the other hand, the draft bill provides for the non-distribution of profits made by these entities throughout a period of 3 years.

Payment in instalments of tax and social security debts

    • Companies under an agreed business recovery plan (Processo Especial de Revitalização) or extra judicial procedure for the recovery of companies (Regime Extrajudicial de Recuperação de Empresas) are authorized to include in the said plan the tax and social security debts generated between 9 March and 30 June 2020.

Romania

Covid-19-virus relief measures

Monthly calendar of tax liabilities April 2020

Government measures to limit the impact of COVID-19 on Romanian businesses

Government updated measures as of 10 April

Covid-19-virus relief measures

Link to article:

Update for travel regulations to Romania

Tax Alert Romania

Monthly calendar of tax liabilities June 2020

Key Measures:

  • Tax amnesty granted for all tax liabilities due before 25 October 2020 (currently applicable only for tax liabilities due before 31 March 2020).
  • No interest and penalties are due, until 25 October 2020, for late payment of tax under the tax payments' rescheduling system.
  • New measures to reduce the timeframe for approving VAT refunds.
  • The tax on special types of activities is not due, during 2020, for a total period of 90 days. The mechanism for calculating the tax on special types of activities has been updated accordingly. The recalculated tax is paid in two instalments, with the first payment being due before 25 July 2020.
  • Importations and intra-Community supplies and acquisitions of protection masks and ventilators used in intensive care are exempt from VAT until 1 October 2020.

Russia

Link to article:

Russia: Russia's latest DBA policy

Key Measures:

  • Pension contributions for 2020 payable by individual entrepreneurs engaged in the economic sectors most affected by the COVID-19 pandemic are reduced by the amount of one minimum monthly salary (in 2020: RUB 12,130).

Serbia 

Government Link:

Ministry of Finance

Link to article:

The Regulation on Fiscal Benefits and Direct Payments to Private Sector and Monetary Support to Citizens

Covid-19-virus relief measures

Key Measures:

  • VAT exemption applies for supplies of goods and services without consideration to the Ministry of Healthcare, the Republic Health Insurance Fund or a publicly owned health institution. The exemption applies from 15 March 2020 until the termination of the state of emergency.
  • Deferral of payment of salary tax and social contributions for salary payments during the state of emergency (but at least three months). This measure is offered to all privately-owned companies. The payment will start at the beginning 2021 in up to 24 instalments.
  • Deferral of advance payments for corporate income tax for the 2nd quarter 2020.
  • Donors become VAT exempt.

Singapore

Covid-19: Conducting financial due diligence in light of the global pandemic

Slovakia

Government Link:

Government Measures

Link to article:

Tax Updates

Labour Code

Vehicle tax: Time limit for filing the tax return and the due date of the tax

Income tax

Tax administration (Tax Code) and administrative fees

Measures on importation of goods

Social Security and Health Insurance

Covid-19-virus relief measures

7 measures connected with Covid-19

Key Measures:

  • All employers who have had to limit or stop their activities may provide wage compensation of 80% of the employee's average monthly earnings, but at least equal to the minimum wage.
  • Extension of filing deadline for tax returns for all taxpayers from 31 March 2020 to 30 June 2020.
  • Exemption from penalties for late payments of taxes.
  • Temporary abolition of social insurance and health insurance contributions for self-employed entrepreneurs over three months (March, April and May). These contributions will be split over the following 18 months.
  • Exemption of wage payments to employees from individual income tax and social insurance and health insurance contributions.
  • Introduction of systematic support of business investments in fixed assets, specifically a super tax deduction and accelerated depreciation will be granted.
  • Amendments to the rules for tax losses.

Slovenia

Link to article:

Notification About The Measures Adopted By The “Third Anti-Corona Package”

Key Measures:

  • The Slovenian parliament has approved the introduction of a part-time work subsidy and extended the option for certain employers to request a refund of salary compensation.

South Africa

Government Link:

National Treasury of South Africa

South African Government Official website

Link to article:

COVID-19 Announcements (central resource)

COVID-19 Reliefs and measures for businesses

Key Measures:

  • COVID-19 Announcments – Waiving of penalities for tax debts (central resource updated as of 12 May 2020)

Spain

Government Link:

Government of Spain (in local language)

Royal Decree 11/2020

Key Measures:

  • Government grants incentives to automotive sector in the form of tax credits on technological innovation activities and accelerated amortization of certain new assets.

Sweden

Government Link:

The Government’s work in response to the virus responsible for COVID-19

Economic measures in response to COVID-19

Crisis Package for Businesses 

Link to article:

Short-time work allowance

Key Measures:

  • As of 7 April 2020 (with retroactive application to 1 January 2020), companies can defer the payment of employer social security contributions, preliminary tax on salaries and value added tax that are reported monthly or quarterly from 3 to 12 months, with an interest of 1.5% and fee of .3% per month on the deferred amount. Companies must apply for this extension.

Switzerland

Government Link:

Coronavirus: Federal Council adopts emergency ordinance on granting of credits with joint and several federal guarantees

Coronavirus: Federal Council approves deactivation of countercyclical capital buffer

Economic Measures

Link to article:

Corona virus - what you need to know (central resource in local language)

Key Measures – Can apply for extensions regarding tax payments as follows:

  • No interest is due on late payment of federal taxes (currently excluding cantonal/communal taxes, fines or other costs) from 1 March 2020 to 31 December 2020
  • No interest is due on late payments of VAT, special excise duties, incentive taxes and customs duties for the period from 20 March 2020 to 31 December 2020
  • Withholding tax and stamp duties are excluded from this waiver of default interest
  • Short-time work compensation is now granted for six months

Thailand 

Key Measures:

  • The government will allow deductions on donations by companies and individuals that are made through the e-donation system of the Revenue Department from 5 March 2020 to 5 March 2021. In addition, approved donations in kind made by value added tax (VAT) operators will be exempt from VAT accordingly.
  • The government will allow hotel business operators to claim an additional 150% deduction for capital expenditures incurred on hotel property from 1 January 2020 to 31 December 2020.

Tunisia 

Key Measures:

  • A temporary contribution of 2% on taxable profits as determined for corporate tax purposes with respect to tax years 2020 and 2021 (with a minimum of TND 5,000) is introduced for banks, financial institutions and insurance and reinsurance companies. The contribution is not deductible for corporate tax purposes and must be paid before 31 October 2020 for tax year 2020.
  • Partial or full forgiveness of loans interests  or insurance premiums by banks, insurance companies or similar financial intuitions in the context of the COVID-19 measures may not trigger any corporate tax liability for those entities in respect of the year in which the forgiveness occurred.
  • Interest on solidarity government bonds to be issued in 2020 to fund the State Budget will be exempt from individual income tax and withholding tax.
  • The deadline for the first 2020 prepayment for corporate tax purposes due on 28 June 2020 is postponed to 20 February 2021 for companies that are affected by the COVID-19 outbreak.
  • The deadline to submit the employer declaration (required by article 55.III of the Income Tax Code) with respect to tax year 2020 is postponed to 30 September 2020.
  • Goods imported under the inward processing regime may be sold or exported without paying any late interest payment or penalties until 30 September 2020.

Turkey

Government Link:

News and Announcements (in local language)

Announcement on Some of the Measures Taken in the Context of Combating New Corona Virus Disease (in local language)

Statement on Postponement of Concise and Value Added Tax Payments for 6 Months (in local language)

General Communication No. 8 on Withholding and Premium Service Return.

Social Security Contributions postponed

Link to article:

Tax Circular 58: Withholding Rate From Free Exchange Funds Increased to 15%

Tax Circular 57: Disclosure of 65 Years of Taxpayers' Submission and Payment Dates Exempt from Curfew Restriction As of 1/6/2020

Tax Circular 56: E-Ledger Establishment and Signing Time

Key Measures:

  • The withholding rate to be made for " Free (foreign exchange) funds " has been increased from 10 % to 15% .
  • Revenue Administration lifts Force Majeure period for certain taxpayers of 65 and older, which means they must submit their tax returns and declarations by 16 June 2020.
  • The Period of Creating and Signing e-Ledgers for February / 2020 Period and the Loading Period of Ledger Charges have been Extended to 19 June 2020.

Ukraine

Link to article:

Penalties and Tax Inspections

Key Measures - From March 18, 2020 to May 31, 2020:

  • A moratorium has been established for conducting documentary and factual tax inspection, except for documented unscheduled tax inspections on the grounds specified in subparagraph 78.1.8 of the Tax Code of Ukraine
  • Revision of scheduled inspections (audits). Inspection (audits), started before March 18, will be stopped and continued after May 31, 2020.
  • Statute of limitations for tax inspections will be extended accordingly for 2.5 months.

United Kingdom

Government Link:

Government of UK  

Link to article:

Coronavirus update for General Counsel - a roundup of recent developments (from our Key UK Legal Contacts at Freeths as of 30 June)

Preparing for a VAT rate cut

Coronavirus Job Retention Scheme Update for the Hospitality sector

Firms urged to reinstate VAT direct debits

Legal Sector COVID-19 Headline Survey Results

Coronavirus Job Retention Scheme (CJRS) changes and deadlines from 1st July 2020

Coronavirus Job Retention Scheme - Deadline for Motor Dealers to claim

Employment Tax - year-end compliance update webinar and podcast

Spotlight on Covid-19 (central resource)

United States

Government Link:

IRS issues Factsheet issued on “people first” compliance relief

US Congress - Families First Coronavirus Response Act

Deferral of employment tax deposits and payments FAQ

IRS Tax Reliefs

Internal Revenue Service (IRS)

Board of Equalization (BOE)

California Department of Tax and Fee Administration (CDTFA)

Franchise Tax Board (FTB)

Employment Development Department (EDD)

Updated FAQ FATCA Compliance

Notice 2020-32

Temporary procedures for claiming quick refund

Link to article:

IRS extension of COVID-19 relief (2020-50)

Distressed M&A: navigating the M&A storm

COVID-19 relief funding: Supporting compliance and institutional objectives

FASB publishes staff guide on applying taxonomy to coronavirus-relief disclosures

Opportunity Zone Compliance: IRS Offers Relief

Webinar: PPP loan forgiveness update: changes from the Flexibility Act and new applications

Tax Guidance for COVID-19 Travel Disruptions

Global trade management tools can help companies succeed despite trade complexities

Strategic sourcing analysis: how to get started

Webinar: The Impact of COVID-19 on real estate valuation and leasing

Webinar: Navigating the changing landscape – a financial perspective

Municipal economic development strategic planning – framework and benefits

Local governments can position opportunity zones for strategic economic development

Tax planning during and after COVID-19

States’ reactions in a pandemic environment

Should you consider a casualty loss provision for your business?

International taxation relief provisions

Federal coronavirus rescue programs

Upcoming compliance deadlines for reacting to CARES Act changes

Leadership matters: Lessons learned in the trenches managing COVID-19 response

Webinar: Protecting your organization and your employees as the U.S. economy reopens

COVID-19: Diversification and International Investment in Uncertain Times: A Primer

COVID-19 Define the Next New Normal

The impact of COVID-19 on SOC

How prepared is your organization for recovery? (COVID-19 Recovery assessment)

Uruguay

Government Link:

Law 8972 (in local language)

Key Measures:

  • Government extends the postponement of withholding obligations of entities that intervene directly or indirectly in the supply or demand of land passenger transport services in Uruguay (including software applications).

Vietnam

Key Measures

  • The tax payment for the final CIT return for fiscal year 2019 and the quarterly tax payable for the first 2 quarters of fiscal year 2020 will be extended by 5 months from the statutory deadline.
  • The monthly VAT payments for March to June 2020 and the quarterly VAT payment for the first 2 quarters will be extended by 5 months from the statutory deadline