| Country | Stimulus packages, Tax measures and deadline extensions of withholding tax and other taxes in light of Corona Virus economic impact |
| Australia | The Government had announced economic stimulus package of AUD 17.6 billion on March 12, 2020 and also has announced second stimulus package on March 22, 2020, bringing the total economic value to AUD 189 billion. This includes AUD 17.6 billion for the Government’s first economic stimulus package, AUD 90 billion from the Reserve bank (RBA) and AUD 15 billion from the Government to deliver easier access to finance, and AUD 66.1 billion in economic support package.Sydney has implemented a relief measure valued AUD 25 million to support the business. These measures will be for initial period of 6 month. The City of Sydney is also in a process of developing second support package for small businesses.New South Wales (NSW) Government has announced AUD 2.3 billion health boost and economic stimulus package on March 17, 2020. On March 27, 2020 New South Wales Government released the second stage of its economic package, which supplements the first stage announced on March 17, 2020. AUD 1 billion investment for infrastructure projects to boost and create jobs accross New South Wales.The key measures include:Businesses affected by COVID-19 are given an option to defer payroll tax payments until July 21, 2020; Further, payroll tax payments for Sydney (NSW) for the month of July, August and September 2020 are deferred until October 2020. Payroll tax payments for the month of March, April and May 2020 will not be required due to COVID-19. Filing date of the Payroll Tax Annual Reconciliation for Sydney is extended to October 30 from July 21 due to Covid-19. Small businesses paying payroll tax will be receiving a one-off grant of AUD 17,500;AUD 1 million payroll tax threshold brought forward to July 1, 2020;Wage subsidy package (Job keeper payment) of AUD 1,500 per fortnight for all employees employed by businesses as of March 1, 2020. This scheme is effective from May 1, 2020. Specified businesses having the aggregate turnover and suffering a specified reduction in GST turnover are eligible for this subsidy. The payment is available from March 30, 2020 until September 27, 2020. Employers can make a monthly business declaration by the 14th of each month to claim Job Keeper payments.The scope of JobSeeker payments has been expanded to include permanent employees who have lost their job, or who are caring for someone who is affected by COVID-19. To be eligible for JobSeeker Payments, a person must be below the payment cut-off threshold. This has been slightly adjusted due to COVID-19. While the threshold for individuals has remained the same, a person with a partner will now be eligible for JobSeeker Payments as long as their partner earns less than AUD 3,068 per fortnight, around AUD 79,762 annually, increased from about AUD 48,000 annually.Individuals receiving the eligible payments will receive two lump sum payments of AUD 750. The first will be paid between March 12 and April 13, 2020 and the econd will be paid on July 13, 2020. People receiving the JobSeeker payment by July 10, 2020 can get the second payment of AUD 750. A person getting the Corona Virus Supplement is ineligible for the second payment.Individuals receiving JobSeekerpayment will receive an additional fortnightly Corona virus supplement of AUD 550 from April 27, 2020 until the end of October 2020An additional one-off payment known as a Crisis payment is made available to people suffering severe hardship. The payment is equal to one week of the person’s base income support payment rate.Regarding foreign investments, all previous monetary thresholds have been suspended, meaning that FIRB approval will be required and will be mandatory, regardless of the monetary value of the investment or nature of the investor where the proportionate ownership thresholds have been met. This change is temporary for six months which will help the Government to monitor all foreign investments, thereby protecting jobs and business.Employee Assistance Program (“EAP”) will be provided with AUD 91 million to double the EAP in 2020-21 to provide additional aid to Western Australians.Businesses with regular GST credits / refunds are to be provided with an option to switch from quarterly to monthly filings for quick refunds.Any businesses facing shortage of cash flow may co-ordinate with the ATO for deferred payment schedules and relief from late GST payments, penalties and interest liabilities.The Government is allowing individuals affected by the Coronavirus to access up to AUD 10,000 before July 01, 2020 and a further AUD 10,000 from July 01, 2020 to September 24, 2020. Individuals will not need to pay tax on the amounts released.Payment deferrals and varied instalment plans which include income tax statements, business activity statements, Pay As You Go (PAYG) instalments, Fringe Benefit Tax (FBT) up to 6 months can be negotiated with ATO, further extension for TBT payments till September 12 can be availed on application to ATO for deferral. Deferred payments of Final Corporate Income Tax (CIT) due by June 1, 2020 can be made up to further six months due to COVID-19. Changes in reporting cycle from quarterly to monthly will facilitate quick GST refunds.Changes in Pay As You Go (PAYG) instalments – Allowing businesses to vary Pay As You Go (PAYG) instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters.Employers will need to meet their ongoing super guarantee obligations for their employees.New South Wales relief package has following measures: AUD 450 million for the waiver of payroll tax for businesses with payrolls of up to AUD 10 million for 3 months (the rest of 2019-20). This means these businesses will save a quarter of their annual payroll tax bill in 2019-20. Employers whose total grouped Australian wages for the 2019-20 financial year are no more than AUD10 million will be entitled to defer their NSW payroll tax liabilities for the months of July to August 2020, inclusive. These employers are already entitled to a waiver of their payroll tax liabilities for the period March to May 2020 under the first stage of the economic package announced on 17 March 2020. The Payroll Tax Act, 2007 is amended and the business having turnover of AUD 10 million or less will be required to pay 75% of payroll tax. AUD 56 million to bring forward the next round of payroll tax cuts by raising the threshold limit to AUD 1 million in 2020-21AUD 500 million to bring forward capital works and maintenanceEmployers will be eligible to defer their payroll tax liabilities for periods up to six months. Australia has recently announced AUD 607 million stimulus package as a relief measure to help Western Australian small businesses and households in the wake of COVID-19. The key measures include:Businesses affected by COVID-19 are given an option to defer payroll tax payments until July 21, 2020;Small businesses paying payroll tax will be receiving a one-off grant of AUD 17,500;AUD 1 million payroll tax threshold brought forward to July 1, 2020;AUD 114 million provided as an additional measure to support small businesses;AUD 760 million has been announced in the past few months to help the economy grow;Employee Assistance Program (“EAP”) will be provided with AUD 91 million to double the EAP in 2020-21 to provide additional aid to Western Australians.Businesses with regular GST credits / refunds are to be provided with an option to switch from quarterly to monthly filings for quick refunds.Any businesses facing shortage of cash flow may co-ordinate with the ATO for deferred payment schedules and relief from late GST payments, penalties and interest liabilities. |
| Brazil | In order to help the small- and medium-sized companies soften the economic blow caused by of Corona Virus, the government is planning for the following:The state-owned bank Caixa is going to reduce the interest rates and along with extension of deadlines for debt payments for 60 days. This measure may be extended for 120 days, if required.Caixa will cut lower rates for small and medium sized companies by 45%In order to give more working capital to companies, the government has suspended the Severance Pay Fund (FGTS) payable by companies for three months (8% of salary of the employee) and also the part referring to the portion of the Union in the Simples Nacional;As announced on March 18, 2020, the Ministry of Economy will create the Anti-unemployment Program to avoid layoffs during this pandemic period. The objective of the initiative is to facilitate labor negotiations in order to reduce labor contract costs and preserve employment links, within the limits provided for in the Federal Constitution.Effective from April 1, 2020, the contributions due to the S System will be reduced by 50% for 3 months (about 5-15% of salary of the employee depending up on the employer). The S System is a joint system of social contributions paid by companies. It includes contributions for National Service of Rural Apprenticeship (SENAR), National Service of Trade Apprenticeship (SENAC), National Trade Social Service (SESC), National Service of Cooperativism Apprenticeship (SESCOOP), National Service of Industrial Apprenticeship (SENAI), Industry Social Service (SESI), Social Service of Transportation (SEST), National Service of Transportation Apprenticeship (SENAT), Brazilian Service of Micro and Small Size Companies Support (SEBRAE). All workers who receive up to 2 minimum wages and have reduced wages and working hours will receive an advance of 25% of what they would receive monthly if they applied for the unemployment insurance benefit. This will benefit more than 11 million workers across Brazil.Suspension of administrative requirements in relation to safety and health at workTemporary cut to the IPI (Tax on Industrialized Products / produced goods) for goods produced domestically or imported, which are necessary to combat Covid-19.Reduced in the import tariffs for medical and hospital products to 0 (Zero).Simplification in customs clearance of products for medical and hospital use to combat Covid-19.Adoption of a non-automatic license for the export of products necessary to combat Covid-19.Creation of an emergency aid of amounting BRL 200, per person, for 3 months (April, May, June 2020), to support informal workers, unemployed and individual micro entrepreneurs (MEIs) that integrate low-income families. This will benefit 15 to 20 million Brazilians. This is now extended for an additional two months.Expansion of credit to micro, small and medium-sized companies (MSMEs).The limited company whose fiscal year ends between December 31, 2019 and March 31, 2020 may, exceptionally, hold the shareholders’ meeting within 7 months (instead of 4 months as of now), counting from the end of its fiscal year.On April 1, 2020, to preserve employment and to guarantee the continuity of work and business activities federal government has introduced “the Emergency Employment and Income Maintenance Program”.https://www.nucleus-co.com/news/regulatory-updates/covid-19-updates-from-brazilThe Declaration of Federal Tax Debts and Credits (DCTF) normally due the 15th of April, May, and June is extended until the 15th working day of July 2020. The digital return for social contributions (PIS/Pasep, COFINS, and EFD-Contributions normally due the 10th of April, May, and June) is extended to the 10th working days of July for returns.Contribution to PIS/Pasep and Cofins related to March 2020 and April 2020 that should be paid in April 2020 and May 2020 is expected to be paid in August 2020 and October 2020 respectively. In addition, Contribution to PIS/Pasep and Cofins which should occur in June 2020, is now postponed to November 2020.An employer social security contribution related to March 2020 and April 2020 which is to be paid by companies in the month of April 2020 and May 2020 is expected to be paid in August 2020 and October 2020 respectively. In addition, employer social security contributions which should occur in June 2020, is postponed to November 2020.Deferred payment of FGTS for the month of March, April, May 2020 will be paid starting from 7th July in up to six monthly installments.São Paulo has suspended certain tax deadlines for 30 days.Rio de Janeiro has suspended tax filings and other deadlines and provided for 60 days’ extension of validity periods of certain certificates.Federal Revenue launches digital CPF document.Digital Certificate is no longer be mandatory to file rectification of the Social Security Guide (GPS), the Federal Revenue Collection Document (DARF) and registration acts related to the National Register of Legal Entities (CNPJ). Authentication by access code is allowed. The access code can be obtained online, at the Virtual Service Center (Portal e-CAC), also on the IRS website.The deadline for the transmission of Digital Bookkeeping (ECD) for the calendar year 2019 is postponed from the last business day of May to July 31, 2020.Installment terms of tax installments due in May, June and July 2020 is extended to August, October and December 2020, respectively.The deadline for the submission of the Annual Information of Brazilian Capital Abroad (Declaração Anual de Capitais Brasileiros no Exterior – DCBE) to BACEN for calendar year 2019 is postponed to June 1, 2020.Implementation of the Brazilian data protection law (Lei Geral de Proteção de Dados Pessoais – “LGPD”) is postponed to May 3, 2021In order to help the small and medium-sized companies soften the economic blow caused by of Corona Virus, the government is planning for the following:The state-owned bank Caixa is going to reduce the interest rates and along with extension of deadlines for debt payments for 60 days. This measure may be extended for 120 days, if required.Caixa will cut lower rates for small and medium sized companies by 45%In order to give more working capital to companies, the government has suspended the Severance Pay Fund (FGTS) payable by companies for three months and also the part referring to the portion of the Union in the Simples Nacional;The Ministry of Economy will create the Anti-unemployment Program to avoid layoffs during this pandemic period. The objective of the initiative is to facilitate labor negotiations in order to reduce labor contract costs and preserve employment links, within the limits provided for in the Federal Constitution |
| Canada | On March 18, 2020, the Prime Minister of Canada announced that the Government of Canada’s COVID-19 Economic Response Plan will provide up to CAD 27 billion in direct support to Canadian workers and businesses. Government of Canada is announcing the new “Canada Emergency Business Account” (CEBA) – The brief list of measures / reliefs announced by Government of Canada is as follows:small businesses will have access to capital they need to cope with the economic impact of the COVID-19. This program will provide interest free loans of up to CAD 40,000 to small businesses to cover operating costs that cannot be deferred (such as payroll, rent, utilities, insurance and property tax) during a period where their revenues have been temporarily reduced. To qualify for this scheme, organizations will need to demonstrate that they have paid between CAD 50,000 to CAD 1 million in total payroll in 2019. This program will roll out in mid-April. The Bank of Canada is cutting the interest rate to 0.75% to support the Canadian economy during this period of economic stressThe government is waiving-1 week waiting period for those individuals who claim Employment Insurance (EI) sickness benefits, effective from March 15, 2020.the requirement to provide a medical certificate to access EI sickness benefitsEstablishment of the Business Credit Availability Program (BCAP) to provide additional support to small and medium sized businesses.The Government is proposing to increase the maximum annual Canada Child Benefit (CCB) payment amounts, only for the 2019-20 benefit year, by CAD 300 per child as part of their May payment.Temporary wage subsidy for 3 months to eligible small employers to support businesses that are facing revenue losses and to help prevent lay-offs .The subsidy is equal to 10% of the remuneration the employer pays from March 18, 2020 to June 19, 2020, up to CAD 1,375 for each eligible employee and to a maximum of CAD 25,000 total per employer.The Canada Revenue Agency will not contact any small or medium (SME) businesses to initiate any post assessment GST/HST or Income Tax audits for the next 4 weeks.The Canada Revenue Agency will temporarily suspend audit interaction with taxpayers and representatives.Individual income tax return filing due date deferred until June 1, 2020.For all taxpayers, the payment of any income tax amounts owing on or after March 18, 2020 and before September 2020 will be deferred until after August 31, 2020. No interest or penalties will accumulate on these amounts during this periodIntroduction of Emergency Care Benefit providing up to CAD 900 bi-weekly, for up to 15 weeks to quarantined or sick with COVID-19 workers or workers taking care of a family member who is sick with COVID-19. Application for the Benefit will be available in April 2020.Implementation of EI work sharing program, announced on March 11, 2020.Canada has announced proposal of stimulus package for COVID-19 but details are yet to be released.However, a number of measures were announced by the government and the Bank of Canada to provide monetary stimulus and relief to employers, following are the highlights:On March 4 Bank of Canada lowered interest rates by 0.50%;Canada’s financial regulatory body, in order to help the affected businesses lowered bank reserve requirements. Further Canadian government announced CAD 7.1 billion package for providing loans to businesses to help soften the economic blow by the Corona Virus.The Canada Revenue Agency (“CRA”) has offered Businesses facing difficulties related to COVID-19 to make flexible arrangements in meeting their payment obligations (further details are yet to be disclosed).Employment Insurance (“EI”) sickness benefits is allowed to Workers who are either in quarantine or who have in self-isolation, without having to wait the mandatory one-week waiting period. Accordingly, their claim will be paid for in the first week of their claim;Federal budget, economic package worth CAD 1 billion in response to COVID-19 will be unveiled while the Ottawa province already announced CAD 10 billion business credit line by establishing a Business Credit facility for the affected businesses.Availability Program (“BCAP”) is introduced to further support financing in the private sector through the Business Development Bank of Canada (“BDC”) and Export Development Canada (“EDC”) of Canada;Lastly Canada’s 2020 federal budget on 30 March 2020 has been postponed the, Parliament is also suspended for five weeks, until 20 April 2020, due to the corona virus (COVID-19); |
| China | China, the worst affected country by the novel corona virus (COVID- 19) outbreak has introduced a slew of measures to help boost economic and affected business as follows:Temporary relief from social security contribution for the period February to June 2020 in following manner:For small and medium sized company – Full exemption from old age pension contribution, unemployment insurance contribution and work-related injury insurance contribution.For Large Company – 50% exemption from Old age pension contribution, unemployment insurance contribution and work-related injury insurance contribution.The value-added tax has been reduced from 3 % to 1 % under cash accounting scheme for small businesses till the end of May 2020. Small Scale Taxpayers in all sectors can issue Special VAT Invoices to its customer from February 1, 2020.Tax Filing Date has been extended by 1 week (i.e. from March 16, 2020 to March 23, 2020) for filings due in the month of March. Tax filing declaration for April 2020 has been extended. The deadline will be extended from April 20, 2020 to April 24, 2020, nationwide. Further extension is possible if a company is severely hit by corona epidemic.Donation by businesses or individuals in form of funds and goods for epidemic prevention will be allowed for deduction in income tax computation.Companies affected by epidemic hit can now carry forward losses incurred in year 2020 for the period of 8 years.Income earned in epidemic prevention and control period such as transportation of epidemic prevention related supplies, lifestyle services, necessity delivery services etc. will be exempted from VAT i.e. January 1, 2020.Companies can apply for deferring payment related to Housing provident fund. Such companies will have a grace period for paying Housing provident fund contribution from February to June 2020 without affecting employee’s interest.For Shanghai city following policies have been introduced by the local authoritiesDeferring adjustment to social security contribution base i.e. social security contribution payment will be deferred for 3 months and will be adjusted on July 01, 2020 (instead of April 1, 2020)Reduced rate of employer contribution to medical insurance temporarily by 0.5% for 2020Refunding 50% of the total unemployment insurance premiums paid in the previous year to enterprises that do not lay off employees or minimize the layoffs.For Beijing CityRefunding 100% of the total unemployment insurance premiums paid in the previous year to the Small and Medium Sized Enterprises that do not lay off employees or minimize the layoffs (i.e. for insured SMEs with less than 30 people, the layoff rate does not exceed 20% of the total number of insured employees,).Postponement in Principal and Interest Repayment for Loans to Small and medium size company and Micro EnterprisesSMEs and micro firms can make applications to banks to defer repayment of principal and interest expenses payable from January 25 to June 30, 2020. Overdue loan repayments in the period will not be subject to penalties.China, the worst affected country by the novel Corona Virus (COVID- 19) outbreak has introduced slew of measures to help boost economic and affected business as follows:Temporary relief from social security contribution for the period February to June 2020 in following manner:For Small and Medium Sized Company – Full exemption from Old age pension contribution, unemployment insurance contribution and work-related injury insurance contribution.For Large Company – 50% exemption from Old age pension contribution, unemployment insurance contribution and work-related injury insurance contribution.The value-added tax has been reduced from 3 % to 1 % under cash accounting scheme for small businesses till the end of May 2020.Small Scale Tax Payers in all sectors can issue Special VAT Invoices to its customer from February 01, 2020.Tax Filing Date has been extended by 1 week (i.e. from March 16, 2020 to March 23, 2020) for filings due in the month of March.Donation by businesses or individuals in form of funds and goods for epidemic prevention will be allowed for deduction in income tax computation.Companies affected by epidemic hit can now carry forward losses incurred in year 2020 for the period of 8 years.Income earned in epidemic prevention and control period such as transportation of epidemic prevention related supplies, lifestyle services, necessity delivery services etc. will be exempted from VAT i.e. January 1, 2020.Companies can apply for deferring payment related to Housing provident fund. Such companies will have a grace period for paying Housing provident fund contribution from February to June 2020 without affecting employee’s interest. |
Czech Repulblic | In mid-March the COVID-19 I loan program was initiated. A follow-up program (COVID II) by the Czech-Moravian Guarantee and Development Bank (ČMZRB) has been prepared with the purpose of increasing the scope to even the smallest business owners. The government has agreed financial support worth 18 percent of its GDP. German stimulus package will also help the country as both economies are strongly interconnected.The government approved one-off support of 25,000 CZK for those forced to close their businesses within the restrictions and the introduction of the reduced working hours (kurzarbeit) system from April 6.Individual and corporate income tax returns filing delayed by three months i.e., July 1, 2020.All individual taxes late claim fines are waived off if proved that the reasons were related to Coronavirus.Employees not able to work due to a quarantine order will receive wage compensation equal to 60% of average reduced earnings over the entire period of quarantine, while their employers will receive a contribution equal to full wage compensation from the state. Employees whose work is affected because of employer’s part due to: Closure or restriction of a business as a result of the governmental emergency measures will receive wage compensation equal to 100% of average earnings, while their employers will receive a contribution equal to 80% of wage compensation from the state.Quarantine order or care for children involving a significant part of employees (at least 30%) will receive wage compensation equal to 100% of average earnings, while their employers will receive a contribution equal to 80% of wage compensation from the state.Unavailability of inputs necessary for business activities will receive wage compensation equal to 80% of average earnings, while their employers will receive a contribution equal to 50% of wage compensation from the state.Restriction of demand for services, products and other deliveries will receive wage compensation equal to 60% of average earnings, while their employers will receive a contribution equal to 50% of wage compensation from the state.Child/dependent relative carer’s allowances will be paid:If school and other children’s facilities are closed for children younger than 13 years due to a state of emergency and also if the employee has dependent persons with disabilities (at least Stage I dependence) without an age limit, all applicable in the case of persons wth disabilities over the period of closure of certain specified social service facilities.Equal to 60% of the reduced assessment base, derived from the average daily earnings for the last twelve months (Paid monthly). These allowances are provided to employees through their employers, based on confirmations issued by schools or other children’s facilities.Deadline extension of the following under relief measures: Corporate income tax returns for the 2019 taxable filing have been extended until August 18, 2020.Health insurance premiums with no application of penalties. |
| France | Economic aid package of EUR 45 billion has been announced to help companies and employees in response to Corona virus outbreak. The government will also prevent organizations irrespective of their size from any kind of failure or suspension of its operations due to the Corona Virus outbreak. Following are the highlights:The government will -Provide guarantee for loansAllow delay in tax payments Suspend rent and utility bills for smaller firms. Allocation of EUR 35 billion package along with reduction in Social Security Contribution.From March 15, 2020, employers whose URSAFF (Union de recouvrement des cotisations de sécurité sociale et d’allocations familiales)contribution due date falls on 5th/15th of the month, may postpone without penalty all or part of the payment of their employee and employer contributions. Payment of these contributions may be postponed up to 3 months. For employers whose contribution due date falls on 5th of the month, French tax authority will inform them accordingly.Companies can postpone for 3 months without penalty payment of corporation income tax, payroll taxes, business tax and property taxes due in March, April and May 2020. No conditions need to be satisfied other than a request for postponement. The extension does not apply for Value Added Tax (VAT) or withholdings of employees’ individual income taxes by employers. Companies that have already settled their March installments may request reimbursement from their tax center once.No new tax audits will be conducted during the COVID-19 lockdown period.Companies may request speeding up the process of tax credit refunds such as VAT tax credit, Research tax credit, Innovation Tax credit and tax credit for employment and competitiveness.Deadline for filing personal income tax returns has been extended. The deadline, which was set on May 14, 2020 has been extended to 04 – 11 June 2020Extension of three months for conducting an Annual General Meeting (which is due by 30th June every year), for filing management report (which is due by 15th June every year) and for filing annual accounts (which is due by August 31st every year) will be available unless the statutory auditor of the company, if applicable, issued its report on the annual accounts before March 12, 2020For companies, the filing of tax returns and other similar declarations initially due in May is postponed to 30 June, such as;The due date for filing Annual Corporate Tax Return is postponed to June 30, 2020.The Due date for filing Contribution on business value added Return (CVAE) return is postponed to June 30, 2020.Companies facing serious difficulties due to corona outbreak may request a tax rebate.As per company collective agreement, the employer may:Impose conditions on employees the taking of paid vacation earnedUnilaterally modify the paid vacation dates already set.The imposed or modified leave period will be valid up to December 31, 2020.The collective agreement may also authorize the employer to split the main annual earned leaves without employee’s consent.The taking of RTT days and certain other days of rest may be unilaterally arranged by the employer if the company justifies it with regards to the economic difficulties linked to the corona outbreak. The employer can impose or modify up to total number of 10 rest days.Economic aid package of EUR 45 billion has been announced to help companies and employees in response to Corona Virus outbreak. The government will also prevent the organizations irrespective of its size from any kind of failure or suspension of its operations due to the Corona Virus outbreak. Following are the highlights:The government will -Provide guarantee for loansAllow delay in tax paymentsSuspend rent and utility bills for smaller firms.Allocation of EUR 35 billion package along with reduction in Social Security Contribution.Companies will be allowed to defer the payment of social security contributions and applicable taxes due in March 2020.Companies are allowed to suspend payments of some social charges and taxes. The relief given for eligible payments would correspond to corporate income tax installments and social security contributions due in March 16, 2020. The applicability of these relief measures can be extended to all taxes and levies due in March. This relief measures may be further extended after March 2020. |
| Germany | Germany – Up to 60-67% of reduced salary paid for by the State if COVID-19 has necessitated a reduction in working hours.From March 1, 2020, Federal Ministry of Labor announced changes in “Act on the temporary crisis-related improvement of the regulations for short-time work compensation” (“Gesetz zur vorüberristeten krisenbedingten Verbesserung der Regelungenfür das Kurzarbeitgeld”) will be applicable to employer as well as employee.The Temporary reduction in normal working hours with subsequent reduction in wages of the concerned employee is termed as Short-time Work.Loss of working Hours is considered due to economic reasons or an unavoidable event, temporary (a work stoppage is temporary) and unavoidable (loss of working hours cannot be avoided). At least 1/3 of the employees in an enterprise are affected by a loss of earnings of more than 10 percent of their monthly gross salary in each case.Short-Time Allowance (KUG – Kurzarbeitergeld) is a benefit under the statutory unemployment insurance, which is provided by all companies located in Germany having minimum one employee.Short-Time Allowance (KUG – Kurzarbeitergeld) paid by the Federal Employment Agency (BfA – Bundesagentur für Arbeit).The employer can reduce regular working hours of specific areas/departments and can also be applied to varying extents with respect to specific employee categories.The employer should submit the application in writing or electronically stating details of Short-Time (reduced) working hours to the Federal Employment Agency to coordinate short-time working issues between the employment agencies involved and the company’s affected operations.The Federal Employment Agency will pay Short-Time Allowance (KUG) up to 60 percent of the lost net remuneration. If there is at least one child living in the household, the Short-Time Allowance (KUG) amounts to be about 67 percent of the lost net salary.To determine the amount of Short-Time Allowance (KUG) – the net pay difference between the flat-rate net pay from the target pay (without short-time work; up to the social security ceiling for unemployment insurance) and the flat-rate net pay from the actual pay (during short-time work).Short-Time Allowance (KUG) calculation – if the employee earns above the social security ceiling – Short-Time Allowance covers the loss of earnings up to the level at which contributions are paid. During short-time work, the actual remuneration earned is above the income threshold, no Short-Time Allowance (KUG) is paid.On March 13, 2020, Federal Finance Minister Scholz and Federal Economics Minister Altmaier announced stimulus package with funds worth EUR 550 billion to all companies, small and large, with offer of “unlimited credit” to cushion the economic impact of the Corona virus. The brief list of measures / reliefs is as follows Government had also planned to prepone the implementation of Tax reform 2021 to 2020 i.e., removal of 5.50% solidarity tax on high-income earners. Simplified application forms for “Tax relief due to the effects of the Corona virus” will be provided to apply for an interest-free deferral and a reduction of advance payments or the trade tax assessment amountwithout further information of reasons (only for Bavaria and North Rhine-Westphalia).The Ministry of Finance has announced that businesses may apply for a delay on Value Added Tax payments until 31 December 2020. Tax deferrals will be granted without interest, but taxpayers must apply before December 31, 2020.Taxpayers affected directly and not insignificantly due to COVID-19 until December 31, 2020, may submit applications for the deferral of taxes which are due or will become due until that date. Tax deferral request for due date after December 31, 2020 must be justified. No interest will be charged on tax deferral. Taxes covered are:Corporate Income TaxTrade TaxVATWage TaxEffective June 1, 2020, standard VAT rates has been cut down to 16% from 19% until December 2020.Germany – Up to 60-67% of reduced salary paid for by the State if COVID-19 has necessitated a reduction in working hours.From March 1, 2020, Federal Ministry of Labor announced changes in “Act on the temporary crisis-related improvement of the regulations for short-time work compensation” (“Gesetz zur vorüberristeten krisenbedingten Verbesserung der Regelungenfür das Kurzarbeitgeld”) will be applicable to employer as well as employee.The Temporary reduction in normal working hours with subsequent reduction in wages of the concerned employee is termed as Short-time Work.Loss of working Hours is considered due to economic reasons or an unavoidable event, temporary (a work stoppage is temporary) and unavoidable (loss of working hours cannot be avoided). At least 1/3 of the employees in an enterprise are affected by a loss of earnings of more than 10 percent of their monthly gross salary in each case.Short-Time Allowance (KUG – Kurzarbeitergeld) is a benefit under the statutory unemployment insurance, which is provided by all companies located in Germany having minimum one employee.Short-Time Allowance (KUG – Kurzarbeitergeld) paid by the Federal Employment Agency (BfA – Bundesagentur für Arbeit).The employer can reduce regular working hours of specific areas/departments and can also be applied to varying extents with respect to specific employee categories.The employer should submit the application in writing or electronically stating details of Short-Time (reduced) working hours to the Federal Employment Agency to coordinate short-time working issues between the employment agencies involved and the company’s affected operations.The Federal Employment Agency will pay Short-Time Allowance (KUG) up to 60 percent of the lost net remuneration. If there is at least one child living in the household, the Short-Time Allowance (KUG) amounts to be about 67 percent of the lost net salary.To determine the amount of Short-Time Allowance (KUG) – the net pay difference between the flat-rate net pay from the target pay (without short-time work; up to the social security ceiling for unemployment insurance) and the flat-rate net pay from the actual pay (during short-time work).Short-Time Allowance (KUG) calculation – if the employee earns above the social security ceiling – Short-Time Allowance covers the loss of earnings up to the level at which contributions are paid. During short-time work, the actual remuneration earned is above the income threshold, no Short-Time Allowance (KUG) is paid.Germany has announced stimulus package worth EUR 550 billion to all companies, small and large, with offer of “unlimited credit” to keep the economy afloat.Government is planning to postpone the implementation of Tax reform 2021 with the removal of a 5.50% solidarity tax on high-income earners.Tax concession will be provided to taxpayers by Central Customs Authority.The Federal Central Tax Office (BundeszentralamtfürSteuern) has planned to reduce insurance tax and value added tax. |
| Hong Kong | Hong Kong government has announced the following measures:One-off reduction in profit tax by 100% capped at HKD 20,000;Surcharge (interest) Waiver up to 1 year on approved tax deferred installment payments plan. The waiver is applicable for the 2018-19 year of assessment and is applicable on profit tax, salaries tax etc. Taxpayers should apply for requesting such waiver before tax payment due date.Low interest loans for Small and Medium Sized Companies along with government guarantee;One-time cash pay-out of HKD 10,000 to permanent residents aged 18 and aboveEmployment Support Scheme which provides wages subsidies to eligible employers to retain their employees. Employers have to undertake that they will not implement redundancies. All employers who have been making Mandatory Provident Fund (MPF) contributions for employees are eligible covering not only those who are hard hit sectors but also for other sectors too. Subsidies calculated on the basis of 50% of wages (with a wage cap of HKD 18,000 per month) for a period of six months. The employer has been provided with the liberty to consider salary of any month between January to April as base for this calculations.Delaying by one month, the issuance of profits tax returns to May 4, 2020 and salaries tax returns to June 1, 2020 for the year of assessment for 2019/20.The Extension for Profit Tax Return is possible up to August 17, (for paper filing) and August 31(for electronic filing), for financial year ending December 31, 2020Profit tax payment for the year of assessment 2018-19 due in April, May and June 2020 can be deferred up to three months.Hong Kong government has announced the following measures:One-off reduction in profit tax by 100% capped at HKD 20,000;Low interest loans for Small and Medium Sized Companies along with government guarantee;One-time cash pay-out of HKD 10,000 to permanent residents aged 18 and above. |
| India | In addition to economic stimulus announced by the Government, following changes are announced separately by Ministry of Corporate Affairs (MCA) over the period of time -If the companies whose financial year (other than 1st financial year) has ended on December 31, 2019, hold their Annual General Meeting (AGM) for such financial year within a period of 9 months from the closure of the financial year (i.e. by September 30, 2020), the same shall not be viewed as a violation.Companies are allowed to hold their annual general meeting (AGM) by Video Conferencing (VC) or other audio visual means (OAVM) during the calendar year 2020, subject to fulfilment of certain requirements.Board meeting for approval of the annual financial statements, Board’s report, etc. can be held through video conferencing or other audio visual means till June 30, 2020.It has now been extended till September 30, 2020.Contribution made to ‘PM CARES Fund’, Contribution made to State Disaster Management Authority to combat COVID-19 and Spending of CSR funds for COVID-19 related activities shall qualify as CSR expenditure.The companies are grated to hold their Extra Ordinary General Meeting (EGM) through video conferencing (VC) or other audio visual means (OAVM) or by postal ballot till June 30, 2020. It has now been extended till September 30, 2020.Government of India has reviewed the Foreign Direct Investment (FDI) policy for curbing opportunistic takeovers/acquisitions of Indian companies due to the current COVID-19 pandemic. As per the new amendment, foreign direct investment into Indian Companies from neighboring countries viz., China, Nepal, Pakistan, Bhutan, Bangladesh, Myanmar and Afghanistan require government approval. In addition, transfer of ownership of any existing or future Indian companies arising out of foreign direct investments from those neighboring countries will now also be subject to government approval.India announced 3rd, 4th and 5th tranche of economic measures The Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman announced an economic stimulus package in a phased manner to support the Indian economy in the fight against COVID-19. Recently, the 3rd, 4th and 5thtranches of measures were announced. They are as follows -The 3rd tranche is mainly for the agriculture sector.The 4th tranche includes policy reforms to fast track investments. The fast track investment clearance will be made through the Empowerment Group of Secretaries (EGoS). In addition, it also includes schemes for upgrading the industrial infrastructure.The 5th and final tranche is announced on May 17, 2020. The focus is on MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act), healthcare and education, businesses, decriminalization of the Companies Act, ease of doing business, public sector undertakings, and resources related to state government. Below is the summary of final tranche:Globally, potential investors look at a country’s Doing Business Report (DBR) ranking. India’s position in the World Bank’s Doing Business Report rank was 142 in 2014 and 63 in 2019.The government is working on an easy registration of property, fast disposal of commercial disputes and a simpler tax regime for making India one of the easiest places to do business.Recent corporate law measures to boost Measures for Ease of Doing Business includes:Decriminalization of company law defaults in 2018,Integrated web-based Incorporation Form SPICe + (Simplified Proforma for Incorporating Company Electronically Plus),Launch of a databank of independent directors,Withdrawal of more than 14,000 prosecutions under the Companies Act, 2013,Rationalization of related party transaction related provisions,Timely action during the COVID–19 crisis to reduce compliance burden under various provisions of the Companies Act,2013 as well as enabling companies to conduct board meetings, EGMs & AGMs, and rights issues by leveraging the strengths of digital India.Further ease of doing business reforms announced includes:Decriminalization of Companies Act violations involving minor technical and procedural defaults (shortcomings in CSR reporting, inadequacies in board report, filing defaults, delay in holding AGM).Lower penalties for all defaults for small companies, one person companies, etc.The minimum threshold to initiate insolvency proceedings is raised to INR 10 million (from INR 100,000 which largely insulates MSMEs). Also, a special insolvency resolution framework for MSMEs was announced.India: Economic measures announced as on May 14, 2020 On May 14, 2020, the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman presented details of a second tranche of the stimulus package to support the Indian economy in the fight against COVID-19. The main focus is on providing support to farmers and the rural economy, and support for migrants and the urban poor. Some of the labor code-related announcements are as follows:Universalization of the right to minimum wages and timely payment of wages to all workers including unorganized workers. Presently minimum wages are applicable to only 30% of workers.A statutory concept of the National Floor Wage was introduced.Fixation of simplified, minimum wages leading to fewer rates of minimum wages and better compliance.Appointment letter for all workers to promote formalization.Annual health check-ups for employees.Extension of ESIC coverage pan-India to all districts and all establishments employing 10 or more employees as opposed to those in notified districts/areas only.Allowing extension of ESIC coverage to employees working in establishments with less than 10 employees.India declared a massive stimulus package yesterday comprising 10% of GDP. Additional information will be unveiled over next few days. The initial information is below: India: Economic measures announced on May 13, 2020 The Prime Minister of India announced a special economic and comprehensive package of INR 20 trillion, which is equivalent to 10% of India’s GDP. Following are some of the measures announced by the Union Finance & Corporate Affairs Minister Nirmala Sitharaman to support the Indian economy in the fight against COVID-19: An Emergency Credit Line is available to Businesses/MSMEs from Banks and NBFCs of up to 20% of the entire outstanding credit as on February 29, 2020. In addition:Borrowers with up to INR 250 million outstanding and INR 1 billion turnover are eligibleLoans have a four-year tenure with a moratorium of 12 months on the principal repaymentInterest is to be cappedThere is a 100% credit guarantee to cover banks and NBFCs on principal and interestThe above is available until October 31, 2020The definition of MSME will be revised as follows: Existing MSME ClassificationCriteria : Investment in Plant & Machinery or EquipmentClassificationMicroSmallMediumManufacturing EnterprisesInvestment < INR 2.5 MillionInvestment < INR 50 MillionInvestment < INR 100 MillionService EnterprisesInvestment < INR 1 MillionInvestment < INR 20 MillionInvestment < INR 50 MillionRevised MSME ClassificationComposite Criteria : Investment and Annual TurnoverClassificationMicroSmallMediumManufacturing and ServiceInvestment < INR 10 Million andTurnover < INR 50 MillionInvestment < INR 100 Million andTurnover < INR 500 MillionInvestment < INR 200 Million andTurnover < INR 1 BillionUnder ‘Pradhan Mantri Garib Kalyan Yojana’, to help low wage earners earning below INR 15,000 per month in businesses with less than 100 workers, government has provided payment of 24% (i.e. 12% of employer and 12% of employee) of employee’s monthly wages into their PF accounts for March, April and May 2020. This support will be extended by another three months to salary months of June, July and August 2020.The Statutory Provident Fund (PF) contribution of both employer and employee will be reduced to 10% each (from the existing 12% each) for all establishments covered by EPFO for next three months. This will be applicable for workers who are not eligible for 24% EPF support under PM Garib Kalyan Package and its extension.Effective from May 14, 2020 to March 31, 2021, the rates of Tax Deduction at Source (TDS) for non-salaried specified payments (such as Payment for contract, professional fees, interest, rent, dividend, commission, brokerage, etc.) made to residents and rates of Tax Collection at Source (TCS) for the specified receipts shall be reduced by 25% of the existing rates.The due date of all income-tax returns for FY 2019-20 will be extended from July 31, 2020 and October 31, 2020 to November 30, 2020 and tax audits from September 30, 2020 to October 31,2020.The Period of Vivad se Vishwas scheme (i.e. scheme announced in budget 2020 for settling the tax dispute between tax payers and tax department) for making payment without additional amounts will be extended to December 31, 2020.India – A new Companies Fresh Start scheme introduced wiping out many prior year defaults – see details at https://www.nucleus-co.com/news/regulatory-updates/covid-19-updates-from-india. |
| Ireland | The Government has made EUR 3 billion stimulus package available to combat the effects of COVID-19 which includes relief measures totaling to EUR 2.4 billion to fund sick pay workers affected by COVID-19 and EUR 435 million contingency fund. To add to this, the Government announced EUR 6.5 billion package to further boost the economy. This package will help small businesses by giving them EUR 10,000 restart grant via rebates/ waiver of rates, 3-month waiver in commercial rates for impacted businesses including EUR 2 billion credit guarantee scheme for SME’s and also EUR 2 billion Pandemic Stabilization and Recovery Fund within the Ireland Strategic Investment Fund (ISIF), which will make capital available to medium and large enterprises on commercial terms.The key features are as below – An eligible employer will be supported by up to 85% of an employee’s take home income up to a maximum weekly tax-free payment of Euro 412 Initially till May 4, 2020 subsidy scheme refunded employers EUR 410 for each qualifying employee. From May 4, 2020 onwards, subsidy payment has moved to a system based on the previous net weekly pay of each employee.Subsidy of EUR 350 will be paid for employees with take home pay ranging between EUR 412 to EUR 586 per week (These changes are effective from May 4, 2020). The Scheme is for all the employers which face a minimum 25% reduction in the turnover because of COVID-19 outbreak. From April 16, 2020 onwards, the employees receiving average take home pay more than EUR 960 per week can avail the scheme. The Scheme is in force for 12 weeks from March 26, 2020 and further extended until August 2020 end. The COVID-19 Wage Subsidy Scheme has replaced Revenue Employer COVID-19 Refund Scheme.In this case employers must self-declare to the Revenue authority that they have experienced significant negative economic disruption due to epidemic situation, with a minimum of 25% decline in turnover, and an inability to pay normal wages and other outgoings, in accordance with guidance to be issued by Revenue authority.E-working allowances to employees – In cases where the government recommends that employers allow employees to work from home to support national public health objectives, as in the case of COVID-19, the employer may pay the employee up to EUR 3.20 per day to cover the additional costs of working from home.Extension of due date for Employer Share Scheme filings – The reporting of share schemes involving submission returns such as the RSS1, ESS1, and KEEP1 has been extended from March 31, 2020 to June 30, 2020 due to COVID-19 crisis.Enhanced protections for employees facing difficulties with their mortgages (for payment break up to 3 months), rent or utility bills.For small and medium sized Companies, the Government has suspended interest/penalties for the month of January and February 2020 on late payments of VAT and Pay As You Earn (PAYE). All the debt enforcement measures necessary are suspended till further notice.Extension of due date for Income tax return filing – The income tax returns will have to be filed by October 31, 2020 which was originally March 31, 2020 due to COVID-19 crisis.Increase in illness payment to the affected employees to EUR 350 per week. This scheme will be in place for 12 weeksWorkers who have lost jobs due to epidemic situation will be receiving an enhanced emergency Covid-19 Pandemic Unemployment Payment of EUR 350 per week (increased from EUR 203)A deferral of up to 3-months on loan repayments will be available to many businesses.A package of relief measures in Ireland totaling to EUR 2.4 billion is as under:Ireland suspend late VAT penalties on corona virus crisis;The EUR 2.4 billion package includes sick pay, illness benefit and supplementary benefit which will help people to self-isolate where appropriate, while having their income protected to a far greater degree than under the current social welfare system;Requirement for 6 waiting days for sick pay in respect of medically certified cases of self-isolation in accordance with public health guidelines has been waived off;The personal rate of Illness Benefit will be increased from EUR 203 per week to EUR 305 per week for a maximum period of 2 weeks of medically certified self-isolation, or for the duration of a person’s medically-certified absence from work due to Covid-19;A provision of EUR 200 million liquidity support fund for impacted firms is being made.The existing systematic short – time working scheme is being used for employees who may work on reduced working arrangement. |
| Israel | Following measures are announced by Israel government in order to cope with losses suffered due to corona virus outbreak:NIS 40.7 billion package for struggling businesses which includes cheap loans to businesses, cancellation of municipal tax, deferrals for VAT, tax rebates etc.Emergency funding financial assistance for companies which are vital for Israel’s economy.Extensions of tax filing deadlines:Annual corporate income tax return – Filing due date of May 31, 2020 postponed to July 31, 2020 (further extension possible).Individual income tax return — Filing due date of April 30, 2020 postponed to June 30, 2020 (further extension possible).Monthly VAT reporting and payment—Filing due date of March 16, 2020 postponed to March 26, 2020.Bi-monthly VAT reporting and payment— Filing due date of April 15, 2020 postponed to April 27, 2020.Renewing annual withholding tax certificates—Filing due date of Mar 31, 2020 postponed to April 30, 2020.Input VAT deduction can be claimed by submitting the scanned copy of invoice to the tax authority, the invoice must have been issued in the period from March 01, 2020 to May 31,2020 .Companies hit severely by corona epidemic may request for reduction in social security paymentsShortening required period for receiving unemployment benefits to six months for those who began their unemployment period by the end of May. A dedicated grant for small businesses (for turnover up to ILS 20million annual sales) whose turnover was significantly affected between March and April as a result of the Corona outbreak, will be given assistance to cover fixed expenses.Any existing permits and licenses granted by the authorities to business owners will automatically be extended for further period of two months.Following measures are announced by Israel government in order to cope with losses suffered due to Corona Virus outbreak:NIS 8 billion funding for providing cheap loans to businesses.Emergency funding financial assistance for companies which are vital for Israel’s economy. |
| Italy | The Government has announced EUR 25 billion stimulus package to combat the effects of COVID-19 by helping the businesses. The “Heal Italy” decree extends EUR 10 billion to support workers and employees facing job risks. EUR 3.5 billion will be diverted to the heath care sector. Along with these measures the Government will inject liquidity into the market by leveraging EUR 340 billion of investments. To add to this, Italian Government has announced a new stimulus package of EUR 400 billion. The Government has also declared another economic package of EUR 55 billion for boosting the economy by freezing corporate tax for companies having turnover below EUR 250 million. The package also grants aid of up to EUR 40,000 to small businesses: The Government has extended parental leave to 15 daysThe Government has extended the original date (April 30 (June 30 in some cases) for conducting Annual General Meeting up to July 31, 2020 due to COVID-19The Wage Integration Fund (Fondo di integrazionesalariale) (FIS) scheme will help the companies having more than 5 employees and which are suffering reduction in business, as INPS will pay allowance for maximum 9 weeks.Law Decree known as “Whatever it takes” (DecrutoCura)provided a measure of paying a bonus of EUR 100 for employees who have been working at company premises during lockdownThe employees who face quarantine can avail this period as a Sick leave.The government is providing one off contribution of EUR 600 for self-employed people and seasonal workers.The deadline for VAT payment is extended till September 16, 2020 on certain VAT liabilities for businesses having turnover below EUR 2 million. For the companies having turnover up to EUR 2 million, the payments can be done till March 20, 2020. Extension in dates of VAT payments for the January to March quarter until June 30 or can be paid in 5 equal instalments starting from June)Extension in date for filing Annual VAT return for year 2019 from April 30 till June 30 due to COVID– 19.Deadline for quarterly Esterometro filings have been extended to June 30 for January to March quarter (original date was April 30).Extension in deadline for communication of VAT balances accounting data for January to March quarter until June30 (original date May 31) due to COVID-19Extension for Intrastat filings for the period pertaining from February to May 2020 till June 30 due to COVID-19.Extension in date of payment of 2nd and 3rd labor insurance instalments (INAIL) till June 30 due to COVID-19.The deadline for submission of VAT returns is extended to June 30, 2020. Quarterly 1 VAT returns filing deadline is extended to June 1, 2020. Kindly note that the non-resident businesses must file the returns by April 30, 2020. ‘’Businesses can opt for 5-month payment plan in wake of COVID 19 crisis.Italy’s government issued a EUR 25 billion stimulus package as a relief measure.Italy to inject EUR 10 billion into the economy for employment subsidies to support employment and workers while EUR 3.5 billion will be allocated to the healthcare system.Moratorium is being announced on debt payments such as mortgages during the outbreakThe government has also announced EUR 350 billion of investment by way of the ‘cura-Italia’decree – literally ‘heal Italy’, decree.Parental leave is extended to 15 days.Employees can claim time under quarantine as sick leave.In Italy, tax deadlines have been extended/relaxed for residents and companies in the so-called “red areas “of Italy. Also, all tax payments due in the period between February 23 and April 30 are given an extended deadline till May 31.Tax credits will be granted to companies whose revenues decline by 25%.Extensions have been given for VAT filings due by the March 16 until March 20 for businesses with a turnover about EUR 2 million per annum. For small businesses below this threshold, payments are postponed until May 31. Businesses can apply for a 5-month payment plan. |
| Japan | Japan is considering the following measures for stimulating the economy affected due to the corona virus. On March 10, 2020, the government of Japan announced incentive packages of JPY 1 Trillion to small and medium sized enterprises including self-employed workers. The brief list of measures / reliefs is as follows -The Tokyo tax authorities announced an extension of business tax (local tax) due between February 27, 2020 and April 15, 2020 will be extended to April 16, 2020.Government may temporary reduce Consumption tax rate from 10% to 5%.The Tax Authority extended due date until May 15 of filing and payment of Individual income and May 19 for consumption and gift tax return.Additional package of JPY 430.8 billion announced to small firms.The government will offer loan at less than 1% annual rate of interest up to JPY 300 million to SMEs whose sales reduced to 5% or more.SMEs and self-employed workers whose sales reduced by 10% to 20%, government will waive off interest of bank borrowing.Companies to be taxed in Tokyo, due to “unavoidable reasons” because of COVID-19 are not able to file and pay their tax returns by the due date may avail themselves of an extension in the following manner:File Form No. 22 regarding extension by disaster (under Tokyo metropolitan ordinance 17-2)File Form No. 13 regarding extension by disaster (under local taxation law 72-25) Japan is considering the following measures for stimulating the economy affected due to the Corona Virus:The Tax Authority extended due date by one month (to April 16) of filing and payment of Individual income, consumption and gift tax return.Announced temporary reduction in Consumption tax rate from 10% to 5%.Government announced incentive packages of JPY 1 Trillion to small and medium sized enterprises include self-employed workers. Additional package of JPY 430.8 billion announced to small firms.The government will offer loan at less than 1% annual rate of interest up to JPY 300 million to SMEs whose sales reduced to 5% or more.SMEs and self-employed workers whose sales reduced by 10% to 20%, government will waive off interest of bank borrowing. |
| Netherlands | The Netherlands has announced certain additional measures to help cope with the impact of the COVID pandemic. They are as follows:The government is widening the scope of work-related cost scheme (Wkr scheme): For the year 2020, the government has expanded the discretionary scope under the scheme. Benefits can now be provided up to 3% (instead of the previous 1.7%) of up to EUR 400,000 of the wage costs of the employee without the Wkr tax implications. In addition:The discretionary scope of 1.2% for amounts above EUR 400,000 remains unchanged, the excess is taxed at a rate of 80%, which is payable by the employer.The Dutch Government has introduced a bill on temporary provisions in connection with the Corona Virus (the Emergency Act) along with an explanatory memorandum for facilitation of electronic communication by legal entities, extension for preparation of annual accounts, etc. It provides for the following:A general meeting can be convened through electronic means; the shareholders will be allowed to ask written or electronic questions for the items on the agenda at least 72 hours before the meeting. The electronic means should have provision for shareholders to ask questions, unless this is not required owing to the circumstances. The holding of Annual General Meeting of a (Naamloze vennootschap – N.V.) public company can be postponed by a maximum of 4 months. Similarly, board meetings can be held by electronic means as well, if all directors agree to it.The annual accounts of companies other than Listed companies may be made within 10 months after the end of the financial year. The annual accounts will still have to be published on the website within 12 months from the end of the financial year except in the case of bankruptcy.On May 20, 2020 the Dutch government announced additional economic measures for businesses:The Reimbursement Fixed Costs Scheme for SMEs – The scheme compensates selected SMEs (with 250 employees or less for fixed costs other than wage costs) upon application. Applications is possible from June 30 to October 30, 2020.New funding is available for the start-ups and innovative SMEs that need financing as a result of the corona crisis upon application under Corona bridging loan (COL) scheme at low interest rates.The tax measures extension is given till September 1, 2020 (payment extension, no fines, hours criterion relaxed). The tax collection and tax interest rates will remain close to zero until October 1, 2020.The business is grappling with the economic impact of the corona virus and to help the economy the Dutch government has announced numerous measures to help business affected due to the corona Virus, following are the measures:Tax payment deferral – The government has deferred payments of value added tax (“VAT”), income tax, individual income tax, wages and corporation tax by three months and even longer than three months provided the entrepreneur provides a written statement reporting the challenges and issues that it has encountered due to the corona virus crisis. Upon receipt of the request, tax authorities, the tax authorities are to stop the collection, with an assessment to take place later. The request is to be sent with a 3rd party statement who can be VAT advisor or accountant within 4 weeks of application. Business can apply for payment extensions for taxes until October 1, 2020.For availing an extension for filing corporate income tax return between April 1 and June 1 extension can be applied until November 1, 2020.No default penalty – No default penalty will be imposed for non-payment of tax or late payment of tax. The late penalty will not be levied till October 1, 2020.Decrease provisional assessment –The government has announced allowing reduction where it appears that the taxable profit is lower than estimated profit then a reduction of the provisional assessment during the financial year will be granted for improving cash-flow with less tax that will have to be paid.The VAT easements and payment extensions declared by the government will remain in force till September 30, 2020.Reclaiming value added tax (“VAT”) –VAT can be reclaimed from the government where the taxpayer’s/organizations customers are not able to pay their debts due to the corona virus under certain conditions.Insourcing personnel – If the party from which an organization insources personnel fails to pay payroll tax and social security contributions the organization availing such service will be liable for it along with the insourcing party.The government has guaranteed scheme for loans to small and medium-sized enterprises (VerruimingBorgstelling MKB-kredieten; BMKB). The businesses themselves can agree with their creditors for suspension of repayments and interest payments etc.Provisional loss set-off – The business expecting to realize a loss for the financial year 2020, the loss whether or not due to the corona can be set off with the tax return filled end of the financial year with request to provisionally set off the loss against the profit for 2019 also known as the “provisional carry-back”. The tax paid for year 2019 will be accordingly partly or fully reduced or refunded.The Temporary Emergency Bridging Measure for Sustained Employment (TijdelijkeNoodmaatregelOverbruggingvoorWerkbehoud) i.e. the NOW-scheme (applicable w.e.f. – March 1, 2020) The NOW scheme is a scheme for granting compensation towards wages of employees (up to 90% of total wages) for a period of 3 months with a possible extension of another 3 months from March 1, 2020. It is applicable for those employers who are expecting a reduced turnover by at least 20% due to the COVID-19 crisis. It is applicable for making payment to both types of employees with permanent as well as temporary contracts. The NOW scheme has replaced the earlier reduced working hour’s scheme (regelingwerktijdverkorting). NOW 1, for the months April through June, is now closed. The NOW 2 (2nd subsidy phase) scheme as announced by the government has extended the application date, applications will be accepted from July 6, 2020. Similar to NOW scheme under the NOW2 scheme the employer expecting a loss of at least 20% may apply for compensation of wage costs. Under this extended scheme, loss of turnover will be considered for period of three months starting from June, July or August 2020. The compensation system remains the same. While applying second time companies have to give declaration that it will not declare dividend, not pay any bonuses to the board and management (bonus to other employees is permitted), and that it will not repurchase its own shares for the year 2020. In case the Collective Redundancy Notification Act (in Dutch “WMCO”) is applicable application form for the NOW-2 will have to state that they will consult trade unions for dismissals at least four weeks before and file dismissal application after four weeks of submission of the WMCO notification to the trade union organisation. It also requires commitment from employers to encourage employees for further training or retraining.The Employee Insurance Agency (“UWV”) will pay an advance (of 80% of the expected compensation) for up to 3 months. A statement from an accountant is required to be submitted for claims that exceeding a certain threshold (amount not yet declared).The Dutch Tax Administration has put on hold any measures in place to collect Income tax, corporate tax, payroll tax, and turnover tax (VAT) payment immediately upon application by the organization.The Dutch government announced that it will not be enforcing the non-EU importer of record rules during the pandemicDeferment in reporting obligation of permanent employees under new Balance Employment Market Act – The obligation for employers to report permanent employees’ under employment contracts under the new Balance Employment Market Act, prior to April 01, 2020, has been extended to July 01, 2020.The organizations hardest hit by the coronavirus will receive a compensation of EUR 4,000 from the Netherlands Enterprise Agency. The list of worst affected sectors is yet to be announced.SME credit guarantee scheme (BMKB)- (applicable w.e.f. March 16, 2020) – In order to increase the liquidity of the smaller entrepreneurs the Dutch government has infused another EUR 300 million for Small and Medium size Enterprise’s (“SME”). On May 20 the BMKB guarantee budget was to EUR 1.5 billion. Under the SME credit guarantee scheme an organization with up to 250 workers is and which is an Small and Medium size Enterprise’s (“SME”) can apply to bridge credit or increase the limit of the amount that can be overdrawn with a term of up to 2 years The guarantee of up to 90% of this guarantee credit will be provided by the government from March 16, 2020. The request to determine subsidy must be submitted before April 1, 2021. Further, conditions include that the business must be established in the Netherlands, Bonaire, Saba or St. Eustatius; the annual revenue of business should not exceed EUR 50 million or balance sheet total of EUR 43 million and the company has to be established for over three years. The companies have to apply for the same through participating banks or other funders who submit application on their behalf for SME credit guarantee to the Netherlands Enterprise Agency (“RVO”). The Netherlands has announced numerous measures to help business affected due to the Corona Virus, following are the measures:Tax payment deferral – The government has deferred payments of value added tax (“VAT”), income tax, individual income tax, wages and corporation tax provided the entrepreneur provides a written statement reporting the challenges and issues that it has encountered due to the Corona virus crisis. Upon receipt of the request, tax authorities, the tax authorities are to stop the collection, with an assessment to take place later. The request is to be sent with a 3rd party statement who can be VAT advisor or accountant within 4 weeks of application.No default penalty – No default penalty will be imposed for non-payment of tax or late payment of tax.Decrease provisional assessment –The government has announced allowing reduction where it appears that the taxable profit is lower than estimated profit then a reduction of the provisional assessment during the financial year will be granted for improving cash-flow with less tax that will have to be paid.Reclaiming value added tax (“VAT”) –VAT can be reclaimed from the government where the taxpayer’s/organizations customers are not able to pay their debts due to the corona virus under certain conditions.Insourcing personnel – If the party from which an organization insources personnel fails to pay payroll tax and social security contributions the organization availing such service will be liable for it along with the insourcing party.The Ministry of Social Affairs and Employment (SZW) in the Netherlands has introduced a Temporary Emergency Bridging Measure for Sustained Employment (Tijdelijke Noodmaatregel Overbrugging voor Werkbehoud) i.e. the NOW-scheme. The NOW scheme will replace the reduced working hour’s scheme (regelingwerktijdverkorting) for employees and organizations affected by the corona virus. The NOW scheme will provide support to employers dealing with a decline in sales (at least a 20% loss of turnover). It will, on an application by the employer, provide a ‘substantial contribution towards labor costs’. The compensation towards wages of employees will be up to 90% of total wages depending up on the loss of revenue. It will be paid in advance (of 80% of the expected compensation) and will be paid by the Employee Insurance Agency (“UWV”). The support period is of 3 months with a possible extension of another 3 months. The government has guaranteed scheme for loans to small and medium-sized enterprises (VerruimingBorgstelling MKB-kredieten; BMKB). The businesses themselves can agree with their creditors for suspension of repayments and interest payments etc.Provisional loss set-off – The business expecting to realize a loss for the financial year 2020, the loss whether or not due to the corona can be set off with the tax return filled end of the financial year with request to provisionally set off the loss against the profit for 2019 also known as the “provisional carry-back”. The tax paid for year 2019 will be accordingly partly or fully reduced or refunded. |
| Singapore | The Jobs Support Scheme (JSS) The Jobs Support Scheme (JSS) announced in Budget 2020 and further enhanced at the Resilience and Solidarity Budgets is set to provide wage support to employers during the period of corona outbreak. Under the JSS, the Government will co-fund the first SGD 4,600 of gross monthly wages paid to each local employee for nine months. The funding depends on the type of business sectors and ranges from 25% to 75% on gross monthly ceiling cap of SGD 4,600. All employers who have made CPF contributions for their local employees (i.e. Singapore Citizens and Permanent Residents) will be eligible for the payout. Government wage support for three different sectors is as under: SectorsJSS will provide support of: Tier 1 – Aviation and Tourism75% of the first SGD 4,600 gross monthly wages per local employeeTier 2 – Food Services*50% of the first SGD 4,600 gross monthly wages per local employeeTier 3 – All other sectors*25% of the first SGD 4,600 gross monthly wages per local employee *Employers in these tiers will receive a top-up to 75% support for the first SGD 4,600 of gross monthly wages paid to local employees in April and May 2020. T he government further announced in April 21, 2020 that JSS will be also extended to support wages of employees in a company who are also shareholders/directors of the company. Wage support for shareholder/directors will only apply to companies that are registered on or before April 20, 2020, and only for the wages of shareholder/ directors with Assessable Income of SGD 100,000 or less for Assessment year 2019 Significant benefit for employers in Singapore – about SGD 1,150 per employee per month for 9 months click https://nucleus-co.com/news/regulatory-updates/covid-19-updates-from-singapore for more.Automatic Deferment of Corporate Income Tax (CIT) PaymentsAll companies with CIT payments due in the months of April, May and June 2020 will be granted an automatic 3-month deferment of these payments. The CIT payments that are deferred from April, May and June 2020 will be collected in July, August and September 2020 respectively.Deferring Tax Payment for employees/taxpayersEmployees/taxpayer may opt to defer their income tax payments due in the month of May, June and July 2020. If employees are paying by GIRO (General Interbank Recurring Order) there will be no GIRO deduction in the month of May, June and July 2020. Such tax deduction will resume in the month of August, September or October 2020. End date on installment plan will also be extended by 3 months.Employee/taxpayer making lump sum tax payment may opt to defer payment by 3 months.Companies will have enhanced corporate income tax rebate of 25% of tax payable, capped at SGD 15,000 for Year of Assessment (YA) 2020. Foreign Worker Levy (FWL) due in April and May 2020 will be waived. Employers will receive an FWL rebate of SGD 750 per month in April 2020 and May 2020 from FWL paid in 2020. FWL rebates will be provided for each work permit and S pass holder employed as of May 1, 2020. Employers who are required to seek tax clearance for their employees in the months of April and May 2020 will be given extension up to June 30, 2020 to file Form IR21. Where personal attendance at any meetings is required by law such as annual general meeting, board of directors’ meeting, etc., an alternative arrangement such as electronic communication, video conferencing, tele-conferencing or other electronic means will be accepted, until such time this temporary measure is lifted. The due date for holding Annual General Meetings has been extended to Aug 29, 2020 from June 30, 2020. Further the audit due date will also change accordingly.The Due Date for filing Annual Return and Financials is extended until September 29, 2020 from July 31, 2020 and for Estimated Chargeable Income till June 30, 2020.Enhanced carry-back relief scheme will help all persons carrying on a business to carry back qualifying deductions (capped at SGD 100,000) for Year of Assessment (YA) 2020 for deduction against assessable income up to three immediate preceding YAs, subject to certain conditions. Significant benefit for employers in Singapore – about SGD 1,150 per employee per month for 9 months click https://nucleus-co.com/news/regulatory-updates/covid-19-updates-from-singapore for more. |
| South Korea | South Korean government has announced to inject KRW 11.7 trillion extra budget of emergency funds to help support economy to take has taken the following measures to help the small businesses. Further the government declared another stimulus package of KRW 50 trillion on March 19, 2020 to help businesses affected by the COVID-19.For the small and medium-sized businesses, facing difficulties in paying wages to their workers and for the purposes of childcare subsidies the government has allocated an amount of KRW 3.0 trillion; South Korea has decided to cut VAT rates for small businesses, introduction of spending coupons and granting additional tax deductions on personal credit card spend will be announced; South Korea has granted Corporate tax deductions for SME’s operating in areas of Daegu, Gyeongsan, Bonghwa and Cheongdo by a certain percentage (but up to a maximum amount of KRW 200 million) as follows :reduction for small enterprise is 60%,reduction rate for medium enterprise is 30%, Corporate tax reductions for expansion of existing domestic operations in Korea are granted. In case of downsizing or closing overseas operations and returning to Korea the companies get 100% tax deduction for the first 5 or 3 years, and 50% for additional 2 years.The VAT exemption threshold for simplified taxpayers has been increased from KRW 30 million to KRW 48 million for the year 2020.Small businesses are granted an extension of 9 months for filing the tax returns and of 12 months for paying and filing all the local taxes in South Korea.Businesses with annual turnover below KRW 80 million will have to pay reduced VAT for the year 2020In order to provide liquidity for small businesses an amount of KRW 12 trillion won is allocated towards emergency funding for business operations and a low interest rate loan (1.5%, lower than ordinary rates by an average of 2.3% points).Deferred loan repayment for SMEs and small businesses (W.e.f. April 1, 2020) – 6 months deferment in repayment of loans will be offered by Korean banks and nonbanking financial institutions.Suspension of loan interest payments for SMEs and small businesses (w.e.f. April 01, 2020): The interest on loans will also be suspended for 6 months beginning from on April 01, 2020)Debt workout programs: In order to provide for Debt relief, programs at Credit Counselling and Recovery Service, and outstanding debt purchases by Korea Asset Management Corporation will be held.In order to avoid credit crunch Bond Market Stabilization Funds will be allocated to provide liquidity to corporations.South Korean government has announced to inject KRW 11.7 trillion extra budget of emergency funds to help support economy to take has taken the following measures to help the small businesses:For the small and medium-sized businesses, facing difficulties in paying wages to their workers, and for the purposes of childcare subsidies the government has allocated an amount of KRW 3.0 trillion; South Korea has decided to cut VAT rates for small businesses, introduction of spending coupons and granting additional tax deductions on personal credit card spend will be announced; the details are still awaited. |
| Spain | Some additional measures announced by Spain includes:Corporate tax (CIT) – an extraordinary option is given for instalment payments for which only SMEs are eligible. Businesses with tax periods commencing from January 1, 2020 with business volume below EUR 600,000 in the year 2019 may make tax payment in instalments by May 20, 2020. Businesses with tax periods commencing from January 1, 2020 whose net revenues are from EUR 600,000 and EUR 6,000,000 in the 12 preceding months can exercise the option for instalment payment of tax can which have to be filed by October 20, 2020. Instalment payments made in the first 20 calendar days of the month of April 2020 are not eligible for these measures.Unemployment benefits will be granted to workers whose employment contracts have been terminated during probation (on or after March 9, 2020) and workers who have resigned since March 1, relying on a definitive offer of employment that was later withdrawn.Employers are required to give priority for employees to work from home for a further two months, employee will have right to adapt and reduce working hours and times.If an SMEs is unable to pay rent due to COVID on the premises due to impact on revenue then such SME’s can request the landlord to grant a moratorium on the payment of rent, which must be accepted by him, in cases where the landlord is a public housing company or entity, or a major property owner. This is applicable for one month starting April 23, 2020.The government of Spain declared a relief package of EUR 200 billion to fight the economic fallout in addition to the existing EUR 14 billion package for the economy. Following are the measures declared by the Spain government:The government will be exempting social security contribution requirements for SME’s who do not lay off workers. For employers having up to 50 employees and maintaining same employment levels in the previous 6 months, there will be social security exemption in the case of suspension of employment contracts or reduction of working hours because of the corona virus. It will be up to75% for larger employers.Companies may implement the suspension of employment contracts and reduction in working hours only due to force majeure (corona related) causes for which organizations must submit application to the competent Labor Authority together with a report which contains the explanation of the correlation. Spain has announced tax relief for small and medium businesses it will allow the businesses to defer their tax obligations for six months without interest.Spain has provided facility for suspension VAT filing deadlines from March 13, to May 30, 2020 upon request to the tax authority. The scheme is not available for large businesses (above EUR 6m turnover) or if the VAT due is above EUR 30 million.In order to help business, maintain liquidity, the government has announced creating a line of public guarantees of up to EUR 100 billion;Reduced working hours – The government has asked the workers to adapt and reduce their working hours by 100% if necessary, especially for those employees with children whose schools have been closed. The workers working in non-essentials services will be granted paid leave between March 30 to April 9. The recovery of working hours can be made from after the state ends the “state alarm” until December 31, 2020. Companies applying for recovering paid leave must establish a minimum number of staff for essential work shiftsThe government has approved a credit line to cover the financing provided by the financial institutions. The Ministry of foreign Affairs and Digital Transformation is going to provide guarantee up to EUR 100,000 million for funding provided by credit institutions. To maintain liquidity in companies for covering immediate expenses due to COVID-19, the government has allocated EUR 10 billion package. The company should apply before September 30, 2020 and have less than 250 workers and for freelance employees. The government will provide guarantees for Up to 80% of the loans that SMEs apply to banks. and up to 70% in large companies. Further for loan renewals up to 60% guarantee will be provided for the government and in any case Pre-COVID loans cannot be cancelled by banks. The government has suspended the deadline for drawing up the Annual Accounts until June 1, 2020, which will be three months from that date when suspension is removed. For companies whose financial year coincides with the calendar year must draw up the 2019 Annual Accounts by August 31, 2020, which must be approved by October 31, 2020.The deadline for approval of accounts in shareholders meeting will be two months from the end of the deadline to draw up the Annual Accounts.A news CIT return is required to be presented if there is a difference between the approved accounts and the ones filed within the first expected deadline, by November 30, 2020.On May 13, 2020, the it was declared that that for companies with 50 or more employees will be restricted from dividend distributions will be restricted that have benefitted from public aid related to COVID-19 measures under force majeure ERTEs. The restriction applies to the year the ERTE is implemented; however, it will not apply if the company already has paid the amount of social security contributions that would be waived due to the ERTE. In addition, the government clarified that companies that have their tax residence in jurisdictions considered to be tax havens are not entitled to the force majeure ERTEsThe government of Spain ended the ‘period of emergency’ which began on March 14, 2020, on June 21, 2020. Accordingly, the periods and deadlines calculation for administrative deadlines will start running as of June 1, 2020.Following are the measures declared by the Spain government:Spain has announced tax relief for small and medium businesses it will allow the businesses to defer their tax obligations for six months without interest.Spain has provided facility for suspension VAT filing deadlines from March 13, to May 30, 2020 upon request to the tax authority. The scheme is not available for large businesses (above EUR 6m turnover) or if the VAT due is above EUR 30million. |
| Sweden | Sweden has announced following measurers for aiding businesses cope with the economic impact caused due to the corona virus crisis. The government has announced a SEK 300 billion support package.Deferment of payment of value added taxes worth 3 months of dues for up to one year. It is proposed that this regulation will take effect on April 8, 2020. The deferment can be granted retroactively as of December 27, 2019. This means that value added tax reported annually from December 27, 2019 until January 17, 2021 will also be covered by the proposal. Companies would have to apply for an extension from the tax agency and will have a small fee (0.3% per month) and interest (1.25% per year)Deferment of payment of employers’ social security contributions, preliminary tax on salaries worth 3 months of dues for up to one year. It is proposed that this regulation will take effect on April 07, 2020 but can be retroactively applied from January 1, 2020. Companies would have to apply for an extension from the tax agency and will have a small fee (0.3% per month) and interest (1.25% per year).The Swedish government is proposing to temporarily suspend the medical certificate requirement from the 8th calendar day of a sick pay period. This applies from March 13, 2020 until September 30, 2020.Companies can reclaim tax payments paid into their tax account for January 2020 to March 2020 from the Swedish Tax Agency. Increased Loan facilities and credit guarantees for small- and medium-sized businesses.A new system for short-term layoffs introduced as of March 16, 2020. The employers will now be able to reduce their employees’ working hours by up to 80% and the central government will cover a clear majority of the cost. It is applicable for three months from May 1, 2020.The Riksbank will be providing loan facility up to SEK 500 billion to Swedish companies via banks to safeguard credit supplyEffective from April 06, 2020, there will be temporary reduction of employers’ social security contributions for the period starting from March 1, 2020 to June 30, 2020. Only the old age pension contribution is to be paid for such period. The reduction applies to up to 30 employees per company and up to a salary sum of SEK 25,000 per employee per month. This entails tax relief of up to SEK 5,300 per employee per month, which makes it easier for companies that are hit by a sudden loss of income while wage costs remain. Note that, the company can choose for itself that for which 30 employees the reduced social security contributions should apply. If the monthly salary for the employee is higher than SEK 25,000 then the employer must pay the contribution on part of salary that exceeds SEK 25,000.Businesses to receive support based on loss of turnover. To be eligible for the support, the business must have had a turnover of at least SEK 250,000 during the past financial year and a loss of turnover of at least 30%. The loss of turnover is calculated on the basis of March and April 2020 compared with the same months last year. The size of support may vary between 22.5% and 75% of the business’s fixed costs excluding wage costs for March and April 2020.Sweden has announced Value Added Tax easement measurers for aiding businesses cope with the economic impact caused due to the Corona virus crisis.The government has announced a SEK 300 billion support package.The government has allowed the organizations to delay VAT payments and other tax settlements by a year. The measure will be retrospectively applicable from January 2020. |
Switzerland | Switzerland approved an aid package of CHF 42 billion for funding reduced work schedules and loan programs for businesses. Small and medium-sized businesses will be able to receive loans of up to CFH 20 million. Social security contribution payments are deferred interest-free for businesses. The federal income tax payment is delayed; specific delays are determined by the Cantons.Short-time work compensation (SWC) is a key instrument for bridging loss of work due to the COVID-19 crisis. Following are the actions taken under SWC:The advance notification for SWC deadline is lifted.SWC is now granted for six instead of three months.The employer is not obligated to contribute to the loss of work.Advance payment of SWC can now be requested by the employer.Current forms and documents specifically related to the COVID-19 crisis have been made available:Advance notification for short-time work: Form 716.300;Consent for short-time working: Form 716.315;Application and settlement of short-time work compensation (extraordinary form, Excel file). Following are the details of short-time work compensation (SWC):Requirements for an application for SWC – The loss of working hours must amount to at least 10% loss of working hour for company or operating department.Short-time compensation can be applied for individual operating departments.Employees entitled to SWC are those:who contribute to unemployment insurance orwho completed compulsory schooling but have not yet reached retirement age (i.e. also employees who are paid by the hour).Employees in fixed-term employment, apprentices, temporary workers and employer-like employees, such as the shareholders of a limited liability company or sole proprietors, as well as their spouses who work for them, are also entitled to SWC. Persons in an employer-like position as well as spouses are entitled to a lump sum of CHF 3,320.00 for a full-time position.The employer must pay the salary at the usual time. The hours lost due to short-time work must be paid at 80% of the salary and the hours worked at 100%. |
| Taiwan | In order to alleviate the economic pressure on individuals and businesses the Taiwan government has issued the following guidelines:On April 23 the government announced that companies in the manufacturing and technical service industry whose turnover has declined by 50% will receive salary and working capital subsidies subject to certain conditions for 3 months.On April 13, 2020 the government extended the tax return filing due date of Corporate income tax returns(along with payment) and Individual income tax returns(along with payments)] to June 30, 2020 without any conditions. The returns and payments for income tax and for corporate tax were originally due on May 31, 2020. Those needing more time can file for extension until December 31, 2020. There will be no late payment of interest and penalties during the extended time. Furthermore, organizations using another fiscal year which ends before June 1, 2020, rather than the calendar year (i.e. January to December) may also be allowed 30 days’ extension.On March 16, it was announced by the government that tax payers affected by COVID-19 will be allowed to make tax payments in installments over the period of 2 to 36 months for business profit tax, personal income tax and local tax subject to prescribed conditions. This facility is available for payments due between January 15, 2020 and June 30, 2021Retroactively from January 15, 2020 up to June 30, 2020, the government has allowed the employer to deduct 200% from business tax of the related salary expense of employees having to undergo a 14-day quarantine or leave for taking care of family members under quarantine or had to take leave due to COVID-19 as per the prescribed conditions.The withholding tax deadline which is the 10th of the following month is extended for March 10, 2020, to March 31, 2020, for April 10, 2020, to April 30, 2020, and May 10, 2020, to June 1, 2020.The declaration and payment periods for VAT are extended for March 15 to March 31, 2020, April 15 to April 30, 2020, and May 15 to June 1, 2020.For small reclaims below NTD 300,000, speedy VAT credits are available to businesses up to June 30, 2020.The Labor Insurance Bureau of Taiwan has deferred labor insurance payments. The payment of Employment insurance and labor pension payments are permitted to be be postponed for 6 months for companies who have implemented reduced working hours and have notified this to the government. The government subsidies, rewards, allowances or any other benefits received by affected companies in Taiwan from the government will be exempt from corporate income tax. |
| United Kingdom | United Kingdom: Corona Virus Job Retention SchemeThe U.K. government has introduced a Corona Virus Job Retention Scheme to help employers retain their employees during the period in which their operations have been severally affected by COVID-19. This is a temporary scheme in place for three months beginning March 1, 2020. The scheme has been extended until October 31, 2020.Please see below additional information:Employer Eligibility Criteria – All employers are eligible to claim under the scheme. However, they must have: created and started a PAYE payroll scheme on or before March 19, 2020enrolled for PAYE onlinea U.K. bank accountEmployee Eligibility Criteria – The claim can only be made for employees that were employed as of March 19, 2020 and were on PAYE payroll on or before March 19, 2020 i.e. notified to HMRC on RTI submission on or before March 19, 2020. Also, employees that were employed on February 28, 2020 and notified to HMRC on RTI submission on or before February 28, 2020, and were made redundant or stopped working prior to March 19, 2020, can also qualify for the scheme if the employer re-employs them and puts them on furlough (temporary leave). Other requirements for making claim – Any employees placed on furlough must be furloughed for a minimum period of three consecutive weeks. When they return to work, they must be taken off furlough. Employees can be furloughed multiple times, but each separate instance must be for a minimum period of three consecutive weeks.Employers should discuss with their employees and make any changes to the employment contract by agreement. Employers must confirm in writing with their employees that they have been furloughed. The Claim -Through this scheme, employers can apply for grants covering 80% of employees’ usual monthly wage* costs, up to maximum of GBP 2,500 per month, plus the associated Employer National Insurance contributions and pension contributions subject to the minimum automatic enrolment threshold. Employees will still have to pay the taxes as they normally pay for their wages including pension contributions.*The usual wage cost includes wages, past overtime, fees and compulsory commission payments but does not include discretionary bonus (including tips), non-cash payments, other commission payments and non-monetary benefits in kind. The claim can be made through an online claim system to be launched on April 20, 2020.The agents can make claims on behalf of employers using their ID and Password. The claim will be paid within six working days.Information required for making claim – The information for furloughed employee will be required such as Name, National Insurance Number, claim period, claim amount, PAYE/employee number (optional) etc. and; Company’s information such as employer PAYE number, number of employees being furloughed, Employer’s Self-Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number, bank account number, sort code, contact person and phone number, etc.Record keeping – A record of the communication between employer and employee confirming the employee has been furloughed must be kept for five years.Employer should also retain all other records and calculations in respect of the claim.After end of the scheme – When the government ends the scheme, employer must make a decision, depending on the circumstances, as to whether employees can return to their duties. If not, it may be necessary to consider termination of employment (redundancy).T here have been certain changes made to the Corona Virus Job Retention Scheme, they are as follows-From July 1, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim Corona Virus Job Retention Scheme grant for the hours not worked.Employers will have to pay employees for the hours they work. There will be certain changes as mentioned below in the Government and Employer contribution to furlough pay. July 2020August 2020September 2020October2020Government contribution for employer NICs and pension contributionsYesNoNoNoGovernment contribution for wages80% up to GBP 2,50080% up to GBP 2,50070% up to GBP 2,187.5060% up to GBP 1,875Employer contribution for employer NICs and pension contributionsNoYesYesYesEmployer contribution for wages–10% up to GBP 312.5020% up to GBP 625Employee receives80% up to GBP 2,500 per month80% up to GBP 2,500 per month80% up to GBP 2,500 per month80% up to GBP 2,500 per month The brief list of measures / reliefs is as follows For those who follow advice to stay at home will be eligible for statutory sick pay (SSP) from the 1st day(rather than 4thday) of their absence from work.Small-and medium-sized businesses and employers (having less than 250 employees) can reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19 subject to fulfillment of certain conditions.Employees are entitled to time off work to help someone who depends on them (a ‘dependant’) in an unexpected event or emergency. Pay for this time off will be at the discretion of employer.For all UK businesses, Value Added Tax (VAT) Payment from March 20, 2020 until June 30, 2020 deferred until March 31, 2021Reforms to off-payroll working rules (IR35) have been delayed by 12 months i.e. from April 6, 2020 to April 6, 2021 as part of the government’s Covid-19 economic response package.For Income Tax Self-Assessment, payments due on the July 31, 2020 will be deferred until the January 31, 2021.The Corona virus Job Retention Scheme enables all UK employers to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. Under job retention scheme HMRC grant will cover up to 80% of employee’s salary to maximum of GBP 2,500 per employee per calendar month. Employer can claim this grant and this scheme will run for at least 3 months from March 1, 2020.The temporary Corona virus Business Interruption Loan Scheme supports SMEs with access to loans, overdrafts, invoice finance and asset finance of up to GBP 5 million and for up to 6 years.All commercial tenants in England, Wales and Northern Ireland who cannot pay their rent because of COVID-19 will be protected from eviction and automatic forfeiture of lease if they miss a payment up until June 30, 2020. It is now extended until September 30, 2020.Support will be given through HMRC’s Time to Pay service to businesses paying tax.The provision determining residency status for tax purpose is relaxed by allowing the Individuals prevented leaving the UK due to sealed border to discount days of presence if they qualify as ‘exceptional circumstances’. The Bounce Back Loan Scheme (BBLS) enables smaller businesses to access finance more quickly during the coronavirus outbreak. Small businesses will be able to borrow 25% of their turnover subject to a minimum of GBP 2,000 and maximum of GBP 50,000.The coronavirus Future Fund will provide government loans to UK-based companies ranging from GBP 125,000 to GBP 5 million, subject to at least equal match funding from private investors. The scheme is open for applications until the end of September 2020.The Coronavirus Large Business Interruption Loan Scheme (CLBILS) supports large businesses, with an annual turnover of over GBP 45 million. All eligible businesses can apply for finance up to 25% of annual turnover maximum up to GBP 200 million.Introduction of a Job Retention Bonus – Introduction of a Job Retention Bonus – UK Employers will receive a one-off bonus of GBP 1,000 for each furloughed employee brought back from furlough and kept employed until January 31, 2021. To be eligible for bonus, an employee shall be paid at least GBP 520 per month on an average during the period from November, 2020 to January, 2021.Introduction of a new KickStart Scheme to create jobs for young people across the country. Young people aged between 16-24 who are claiming Universal Credit and are at risk for long-term unemployment will be eligible for this scheme. This scheme will cover 100% of the National Minimum Wage (NMW) for 25 hours a week for each six-month job placement. Employers can top up the wage above this. Apart from it, businesses will be provided with GBP 2,000 for each new apprentice hired who is under the age of 25 years old. It is in addition to the existing GBP 1,000 payment given by the UK Government for new 16-18-year-old apprentices and those aged under 25 with an Education, Health and Care Plan.The VAT rate for tourism and hospitality-related activities will be reduced from 20% to 5% for a period of 6 months starting from July 15, 2020 to January 12, 2021.UK announced a budget of GBP 30 billion pounds to aid businesses and employees affected by the Corona Virus.The small businesses will be allowed temporary tax breaks and sick pay guarantees.The government will grant the local councils an amount of up to GBP 500 million as a “hardship fund;” whereas the National Health Service will be granted GBP 5 billion of emergency cash.The provision determining residency status for tax purpose is relaxed by allowing the Individuals prevented leaving the UK due to sealed border to discount days of presence if they qualify as ‘exceptional circumstances’.Property tax reduction for retail and other affected sectors was announced as well.UK will open call centers for taking requests for VAT payment delays as announced on March 11.Further businesses having any outstanding tax liabilities will get agree additional time to settle their tax dues with the HMRC’s ‘Time to Pay’ scheme. |