Business tax measures
Jurisdictions from Australia to Vietnam have deferred payments of corporate income taxes for at least three months, and companies in Japan can apply for up to a year of deferral. Many are postponing filing deadlines, including Argentina, mainland China, the Czech Republic, New Zealand, and Ukraine, to give just a sample. Other jurisdictions, including Curaçao, Finland, Malaysia and Switzerland, have waived or reduced penalties for late filing or payment. (For more details about particular jurisdictions, see the EY Tax COVID-19 Response Tracker.)
Making it easier to deduct losses is a common focus across many jurisdictions including Chile, mainland China, Norway and the United States. Other jurisdictions are offering credits for specific recovery-related activities. For example, Italy has adopted a tax credit worth 50% of the cost for sanitizing work environments and tools, while France is offering a tax credit for competitiveness and employment delivered through a rapid refund mechanism. Taiwanese enterprises may claim a 200% tax deduction for expenses incurred in the tax year on salaries and wages paid to employees taking leave due to COVID-19.
“Given the volume of tax assistance out there, accessing what’s available could be the difference for some between survival and collapse,” says Chris Sanger, EY Global Government and Risk Tax Leader. “It’s even more important now to monitor legislative and regulatory developments and be in a position to claim benefits when and where they are offered.”
Help with respect to indirect tax obligations is also part of many packages, but the relief comes in different forms. Belgium, Colombia, Costa Rica, Finland, Israel, Italy, Japan, the Phillipines and Saudi Arabia are among many jurisdictions postponing filing obligations, while jurisdictions including Australia, Sweden, the United Kingdom and Vietnam are among those deferring remittance, for up to a year in some jurisdictions. Germany, Greece and Luxembourg are waiving or reducing penalties and interest on late payments. Jurisdictions including Russia are offering zero import duties on some goods deemed socially significant (as defined by the government) and some jurisdictions are offering VAT exemptions for similar goods.
In addition to tax relief, many governments are giving a reprieve on tax enforcement, especially for small- and medium-sized businesses. For example, countries ranging from Canada to Ukraine have temporarily suspended ongoing audits, while other governments have postponed hearings and litigation.