Coronavirus has spread to almost the whole world. Because of this, many countries were forced to quarantine, which meant a significant blow to the economy. To prevent a wave of bankruptcies, states introduce various measures to reduce the tax burden on organizations. In particular, non-residents can also take advantage of certain concessions.

Greece softens tax debt rules

The Greek economy has been hit hard by the COVID-19 pandemic. Therefore, the measures for salvation are very serious. In particular, a deferral was introduced to repay the following debt issues:

  • for value-added tax;
  • for any type of certified (tax) payments;
  • the possibility of payments in installments of the established debt.

Exemptions will be valid for 4 months. In addition, Greece has reduced VAT rates for a number of medical and personal care products. The value-added tax rate has been reduced to 6% (from 24%) for enterprises that produce and sell medical masks, gloves, antiseptics, medical alcohol, wipes, soap, etc.

Costa Rica: tax deferral, reporting on time

The Government of Costa Rica has passed Law No. 9830, On Tax Relief for the COVID-19 Pandemic. Its provisions establish the suspension of the payment of a number of mandatory payments. In particular, companies are temporarily exempt from:

  • VAT;
  • income tax;
  • consumer tax;
  • import tax.

According to the laws of Costa Rica, at normal times, these payments must be paid from April to June. Now they can be paid until December 31. However, the new law does not abolish the requirements for timely reporting.

Chile: a special economic plan

The President of Chile approved a special plan to protect the economy and preserve jobs. It includes a number of various exemptions, including:

  • corporate tax advance payments are not required to be paid within the next 3 months;
  • VAT payment for companies with a turnover of up to 350 thousand fixed Chilean units (28,000 pesos) is delayed for 3 months;
  • income tax compensation for companies (scheduled for April 2020);
  • income tax payment postponed until June 2020;
  • deferral of tax payments by individuals for 3 months;
  • zero stamp duty for 6 months.

Also, a special economic plan provides for the suspension of obligations to enforce court decisions.

The UK: increased reporting deadlines

The UK has announced strict quarantine due to coronavirus. Enterprises are closed but reporting deadlines are approaching. In this regard, Companies House has approved a special mechanism for deferring the submission of necessary reporting documents.

To take advantage of tax relief, a company must contact the representative office of the Companies House, and file the appropriate application. If approved, the reporting deadlines for the company will be increased by 2 months.

Cyprus: taxes are reduced, reporting can be submitted later

Cyprus has also taken a number of exemptions for companies registered in this jurisdiction. In particular, organizations may not pay a social contribution over the next 2 months. The deadlines for filing a tax return have also been extended. You can submit the necessary documents until May 31. Another support measure is the introduction of an overdue tax regulation scheme. This will allow you to pay taxes and fees in installments.

The government also took a number of measures for VAT payers, including:

  1. tax liabilities suspended until June;
  2. standard rate reduced to 17% for the quarantine period;
  3. preferential rate reduced to 7% for 3.5 months.

There are some benefits for company employees who have lost more than 25% of the turnover. In particular, employees of such organizations can expect to receive public dole.

What’s happening in other countries?

The Ministry of Finance of Belgium announced special economic measures. These include the temporary abolition of fines for companies that have overdue taxes or paid mandatory payments too late. They can also get a deferral of tax. Companies can apply for benefits by June 30th.

The Netherlands also decided to defer tax payments for organizations affected by the pandemic. Advance tax payments will be reduced. Fines and penalties for companies at the time of quarantine will be 0.1%. In order to receive benefits, it is necessary to submit an application to the regulator and undergo a tax audit, which will show that the organization’s problems are associated with the virus.

Sweden has taken a number of measures to support people and companies. In particular, the state will provide employers with subsidies for salary payments. During quarantine, employees must receive at least 90% of their salary. Medical leaves will be compensated not by employers but from the state budget. It is also planned to defer the payment of a number of taxes.

Law & Trust offers legal services for organizations operating in different countries of the world. We will tell about measures taken to support business in different jurisdictions, as well as help to use them.