Global COVID-19 tax policy responses/proposals
Note: these are highlights only and this list does not include widely applied extensions of filing and payment deadlines, and relief of interest and late payment penalties. Items in red indicate recent initiatives or changes that are to the disadvantage of taxpayers' in the relevant country.
Austria
- Tax free meal vouchers and 75% deduction on business lunches to stimulate hospitality sector
Australia
- GST deferral on imports
- Land tax relief on commercial properties
- Cashflow “boost” – essentially allows SMEs to keep up to $100k of PAYG payments – treated as refundable credits
- Accelerated depreciation for SMEs (50% upfront deduction)
- Instant asset-right off for businesses with turnover below AUD500m for assets less than AUD150k
- Tax incentives to lure major film productions to Australia
Bahamas
- Tax credit to support businesses that retain employees
Belgium
- Temporary reduction in VAT for restaurants and cafes
- Loss carry-back scheme
Bulgaria
- Temporary reduction in VAT for catering services
Bosnia and Herzegovina
- Employers to pay net wages, Government will pay employment related taxes
Brazil
- “Exceptional negotiation” procedure for collection of taxes – aims to facilitate the overcoming of the economic and financial impacts on corporate and individual taxpayers due to COVID-19
- Temporary reduction of financial transactions tax
Canada
- Ending GST payment delay scheme (businesses still in difficulty can apply)
Cayman Islands
- Temporary waiver of tourist accommodation tax
Cambodia
- Airlines temporarily exempt from minimum tax; hotels, restaurants and tour agencies temporarily exempt from monthly taxes
Colombia
- “VAT holiday” for consumers on certain items; reduction in consumption tax for food and beverage services
- Suspension of tax audits in March, lifted in June
- Foreign filing incentives – purchase of transferable tax credit
Chile
- Reduction in tax for instant depreciation of assets for SMEs
- Speedy VAT refunds if can show 10% drop in sales
China
- VAT reduction for small businesses
- Extension of expiring tax concessions
Costa Rica
- Temporary VAT rate cut (13% to 9%)
Cyprus
- Tax credit for landlords who reduce rent (50% of reduced rent, reduction must be at least 30%)
- Temporary postponement of VAT payments (until November 2020)
European Union
- Import VAT/duty relief on certain imports for combating COVID-19
- EU-wide turnover tax to fund €2 trillion pandemic recovery fund?
Finland
- Temporary return of VAT paid
France
- Tax loss carry-back scheme
Germany
- Loss carry back introduced and later increased
- Exemption for “assistance payments” to employees
- Reduced rate of VAT (7% cf 19%) for restaurant and catering services
- Reduction in general rate of VAT from 19% to 16%; reduction in reduced rate of VAT from 7% to 5%
- Accelerated depreciation for moveable business assets
- Increase in R&D expenditure cap
- €7b of tax cuts planned in 2021
Greece
- 25% discount for timely payment of VAT
- Reduction in VAT in transportation from 23% to 13%, additional temporary tax cut for coffee, non-alcoholic beverages and summer theatres
- 30% tax deduction for R&D expenditure will be increased to 100% for expenses incurred from 1 September 2020
- Reduction in VAT on passenger transport, cinemas and catering services from 24% to 13%
- 12 month interest free VAT payment plan
- Significant intervention in out-of-court settlements of tax disputes
Hong Kong
- Exemption for payments made under anti-epidemic fund
Hungary
- Reintroduced retail turnover tax at progressive rates up to 2.5%
Iceland
- Loss carry back implemented and increased deductions for research and development
India
- Proposal for 10 year tax exemption for companies making new investments of $100m +
- Delay of implementation of new anti-avoidance reporting requirements
Indonesia
- 10% VAT on sales by technology firms including Amzaon, Netflix, Spotify and Google
- 3% corporate tax rate reduction
Italy
- Abandoned plans to raise VAT to 25%
Japan
- Tax exemption/deferral for rental income where rent voluntarily reduced
Malaysia
- Special deduction equivalent to the rental reduction amount available to business landlords of business premises that offer reduction or relief of rental payment to SME tenants
- Income tax rebate (up to USD 4,686) for SMEs and entrepreneurs
- Tax holiday (0% rate) for foreign manufacturers that relocate their operations to Malaysia
- Tourism sector can delay tax payments to 31 December 2020
Mauritius
- Extension of CRS and FATCA reporting deadlines
Myanmar
- 10% tax credit for investments in capital equipment
- One-off increase in depreciation to 125% for fixed assets
- 10% tax credit and 125% deduction for salaries paid above a certain threshold
Netherlands
- Tax payment deferral for small businesses and entrepreneurs
- Tax free allowances for fixed costs for SMEs in the recreation/leisure industry
Norway
- Tax breaks to the oil industry – temporary shelter of portion of income
Pakistan
- Tax relief on health supplies and edible items
Paraguay
- Delay in implementation of VAT on foreign electronic and digital services
Peru
- Accelerated depreciation rates for certain assets to support investment
Philippines
- Tax incentives to tourism operators upgrading facilities to enhance health and safety features
- Tax credits for motels, hotels and dormitories
Poland
- Levies on foreign on-demand digital services paid to local film production industry
- Delay of implementation of some mandatory reporting
Portugal
- Reduced VAT on gyms and fitness clubs
Romania
Russia
- Tax relief for medical staff for work with COVID-19
- Reduced tax rates for SMEs in industries affected by COVID-19
- Temporary suspension of tax debt collection and tax audits
- Tax exemption for entrepreneurs in the tourism sector
San Marino
- A tax credit equal to 60% of expenses incurred for renting qualifying commercial properties in March and April 2020 for businesses that had to suspend their activities by government order;
Saudi Arabia
- Increase in VAT from 5% to 15%
South Africa
- Tax relief for donations to qualifying public benefit organisations
Spain
- Increase in rebate for Spanish film productions
- Previous suspension of judicial and administrative procedures lifted in June
- Dividend restrictions for companies that have benefited from public aid
Sweden
- Grants to cover fixed costs of companies suffering drop in turnover and losses
Tanzania
- Contributions to Government fighting fund allowed as a deduction
Thailand
- Reduced corporate tax of 10% for 10 years for qualifying entities
- Temporary deduction of 150% for investments in machinery for business
- Exemption from tax on profits derived from sale of carbon credits
- Additional 100% deduction for the cost of approved staff training
- Additional 150% deduction for hotel operators making improvements
Tunisia
- Non-deductible 2% levy on profits of banks and financial institutions
- 35% withholding tax on gross interest on high interest rate term-deposits
- Loan forgiveness treated as non-taxable
Ukraine
- Suspension of tax audits and penalties for tax infractions
United Kingdom
- Business rates holiday and cash grants for retail, hospitality, leisure and nursery sectors
- Tax free allowance for working from home
- Reduction in VAT from 20% to 5% for tourism, leisure and hospitality
- Temporary increase in the stamp duty threshold from £125,000 to £500,000
- Restrictions on tax haven companies from enjoying incentives
- End of VAT payment holiday on 30 June 2020
United States
- Tax relief for taxpayers that develop renewable energy projects (because COVID-19 has caused industry-wide delays in the supply chain for components needed to complete such projects)
- Tax loss carry-back scheme
- Possible tax credit for domestic travel expenditure
Uruguay
- Introduction of temporary emergency health tax on personal services remuneration for services provided to the State
- Aviation excise tax suspension
- Tax exemption of 15% to 40% for investment in construction and urbanisation
Vietnam
- 30% cut in corporate tax for SMEs
- 30% reduction environmental protection tax on aviation fuel
