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Corona-Pandemic: Immediate Taxation, Legal Measures and Financial Aid in New Zealand, Malaysia, Nepal and Vietnam01.04.2020
To stabilise the market many countries have released a second aid package. New Zealand and Malaysia have set up high budgets to support enterprises. Vietnam and Nepal are taking more strict measures, although the situation appears to be under control. Our experts summarise the most important points.
The New Zealand government has put a lockdown in place for 4 weeks commencing 26 March 2020 and is addressing the situation daily.
The government has made a NZD (New Zealand dollar) 12 billion aid package available to businesses that have been affected by the COVID-19 control measures. The stimulus package covers the following key features:
- A wage subsidy scheme in which employers have been given a fixed amount per employee for a 12-week period to preserve jobs.
- Redundancy support to workers who have lost jobs due to business closures.
- Protection for tenants of residential property, mainly in the form of a rent freeze.
- A mortgage repayment holiday scheme offered by banks to house owners to prevent unnecessary losses due to reduced incomes caused by the pandemic.
- Emergency social welfare benefits.
- A business finance guarantee scheme whereby affected businesses which need to borrow to stay afloat will have 80% of those borrowings guaranteed by the government.
- The Reserve Bank of New Zealand has cut the official cash rate for borrowers to 0.25%.
Tax Measures: Part of the assistance package are new tax measures designed to support businesses affected by COVID-19. These include:
- Depreciation on commercial and industrial buildings.
- Immediate deductions for low value assets.
- Revision of provisional tax obligations for small businesses. The threshold at which provisional tax is payable has been increased from NZD 2,500 to NYD 5,000. This is likely to benefit smaller taxpayers and potentially delay the due date for tax payments for the tax year 2020/21 until the final tax due date of 7 February 2022.
- Writing off interest on late payments of tax for certain taxpayers.
- Other measures include changes to the calculation of the in-work tax credit to remove the hours worked test and providing the Inland Revenue Department with greater information sharing powers to facilitate a comprehensive government response to COVID-19.
Additional measures are expected to be rolled out as the situation continues. The Ecovis New Zealand team is maintaining its commitment in assisting you with its professional services as well as helping clients to apply for the financial support provided by the government. We aim to help our clients navigate through these difficult times.
The Malaysian government has released an Economic Stimulus Package, which was announced by Prime Minister Tan Sri Muhyiddin Yassin on 27 March 2020.
The key features include:
- One-time cash support for households, estimated to benefit 5.5 million family households and 3.5 million singles.
- A MYR (Malaysian ringgit) 1 billion budget for the food security fund.
- The Health Authority is planning to spend MYR 1 billion on the purchase of medical systems.
- MYR 8 million is set aside for testing for COVID-19.
- Insurance payments are postponed for 3 months.
- From 1 April 2020, all medical workers, including doctors, nurses and assistants, can receive an additional monthly bonus of MYR 600 per person.
- From 1 April 2020, all military, police, customs staff, and volunteer guard forces can receive an additional monthly bonus of MYR 200 per person.
- Enhancement of the Household Living Aid fund (Bantuan Sara Hidup, BSH).
- 6-month postponement of repayments to the Skills Development Fund Corporation (Perbadanan Tabung Pembangunan Kemahiran, PTPK).
- MYR 25 million for NGOs providing medical treatment, shelter and food to social welfare organisations and the homeless.
- Up to 6-month payment deferral for public housing tenants.
- From 1 April 2020, a discount of 15%-50% on electricity provided to households for 6 months.
- A MYR 100-200K special fund for agricultural and fishing organisations to secure sufficient supply for 3 to 6 months.
- A 6-month rent holiday for all state-owned organisations such as school canteens, kindergartens, restaurants and convenience shops.
- MYR 100 million for goods storage and distribution centres.
On 25 March 2020, the government announced the extension of the Movement Restriction Order, which means that all offices should be closed until 14 April 2020.
ECOVIS Malaysia is committed to safeguarding the health of our staff and clients. However, we will do our best to prevent disruptions to our workflow. We remain at our clients’ disposal to provide help with any urgent request and where needed. We are here to provide our best support in guiding our clients through this difficult time.
The Government of Nepal has introduced new relief packages:
- Employees’ salaries for the month of March 2020 and the subsequent lockdown period shall be covered by the employer. However, the funds can be taken from the company’s Corporate Social Responsibility fund.
- If the employee and employer are registered in the Social Security Fund (SSF), then the SSF contributions will be covered by the Nepalese government.
- The Nepal Food Corporation and Salt Trading Corporation will provide a discount of 10% on products such as rice, flour, sugar, salt and cooking oil.
- Nepal Telecom will provide discounts of 25% to internet and data package users during the lockdown period. Other private telecom companies are also being encouraged to do the same.
- Nepal Electricity Authority shall provide a 25% discount to domestic consumers using up to 150 units per month.
- Internet, water, electricity and telephone charges for the months of March and April can be paid by the middle of May without any penalty.
- Discounts of 30%-50% on electricity consumption bills will be provided to companies in the manufacturing industry, depending upon the nature of the company.
- Doctors, nurses, technicians, social workers, ambulance drivers, employees, cleaners and security guards working on the control and eradication of coronavirus shall be provided with free insurance and compensation of up to NPR 25 lakhs (2.5 million Nepalese rupees) until mid-July 2020 and will also be provided with free safety equipment.
- Private hospitals must make the necessary arrangements to import the required medical equipment and continue to provide all their facilities at a 20% discount on bills issued until next year.
- Private schools must waive fees for one month to secondary level, except for residential fees.
- House owners in city areas must waive rents for one month for tenants working in the casual sector.
- Customs duty shall be waived on imports of medical equipment by both the private and public sector.
- The extension for the VAT return and payment for the month of March has been extended until the middle of May 2020.
- The extension for the withholding tax return and payment for the month of Falgun (February/March in the Gregorian calendar) has been extended until the middle of May 2020.
- The deadline for the provisional tax return and 2nd instalment of income tax under the Income Tax Act has been extended until the middle of May 2020.
- Any amount donated by companies to the Corona Relief Fund shall be eligible for deduction from assessable income.
- The deadline for all payments and documents to be submitted to the Company Registrar Office for renewal in the month of March has been extended until the middle of May 2020, with no late fees.
- The deadline for all payments and documents to be submitted to the Department of Commerce and Industries for renewal by partnerships, private and other companies has been extended until the middle of May 2020, with no late fees.
ECOVIS Nepal is monitoring the situation and will deliver the latest measures to help clients get through the difficult time.
Vietnam has applied a lockdown to the whole country. Houses, villages and provinces are fully isolated from each other.
Citizens are required to stay at home all the time, except in absolutely necessary or emergency cases, or to go to work in essential industries.
Manufacturing facilities and essential service providers are not subject to this lockdown, but must ensure that the necessary prevention measures are applied.
Government offices are working from home, except for the security services and the medical sector.
Ecovis Vietnam is providing support to our clients without any service interruptions.
Corona-Pandemic: Immediate Taxation, Legal Measures and Financial Aid in Spain, France, Malta, Romania.30.03.2020
More new measures and financial aid packages have been announced to support SMEs during the pandemic. France, Malta and Romania have announced tax deferral policies and postponements of tax due dates. Spain has announced an extension to the state of emergency but is still maintaining the deadlines for tax payments. Our experts summarise the most important points.
The situation in Spain continues to be very serious. It is currently the country with the fourth highest number of virus cases worldwide. The government has asked parliament to extend the state of emergency for a further 15 days so that shops will remain closed, no leisure activities are allowed outside of the house and travel is only permitted to and from jobs and to acquire essential goods.
In order to help companies that had to shut down operations overnight, the government has eased the regulations on the temporary suspension of work contracts or the reduction of working hours to allow more flexibility. Added to this flexibility was a regulation allowing companies to not pay social security contributions for these employees if they agreed to the compromise of not terminating any employee during a six-month period, as well as providing facilities for employees to access unemployment subsidies.
The government also issued a decree on 24 March 2020 regulating the guarantees that will be granted to companies in need of financing to cover their liquidity problems due to the coronavirus. According to this regulation, the Official Credit Institute (ICO) will guarantee 80% of the loans requested by individual entrepreneurs and small and medium sized companies, and 60-70% of the loans requested by major companies.
In terms of taxation, the government is, at least up to now, maintaining the deadlines for the payment of taxes. Officially there are also no postponements of state tax payments although some regions, such as Madrid, have already announced such measures.
The government has suspended all other procedures, but taxes must still be paid by the legally mandated dates, although requests for deferrals will be accepted up to EUR 30,000 without a guarantee for companies with a turnover of less than EUR 6,010,121.04. However, there is intense pressure to try to convince the government to postpone these deadlines as other countries in the EU have done.
The three Ecovis Madrid companies are at your disposal for any questions about these regulations or the situation in Spain.
In the face of the COVID-19/Coronavirus epidemic, the government has introduced immediate support measures for businesses:
Delays to social and/or fiscal payment deadlines (URSSAF – Organizations for the Collection of Social Security and Family Benefit Contributions –, direct taxes).
- In the most difficult situations, direct tax rebates based on the individual scrutiny of the application.
- Deferral of payments for rents, water, gas and electricity for the smallest companies in difficulty.
- Aid of EUR 1,500 for the smallest businesses, the self-employed and micro businesses in the sectors most affected, thanks to the solidarity fund financed by the state and the regions.
- The mobilisation of EUR 300 billion from the state to guarantee bank credit lines that businesses may need as a result of the epidemic.
- Support from the state and the Banque de France (credit mediation) in negotiating the rescheduling of bank loans.
- Maintaining employment in companies with the simplified and reinforced short time working scheme.
- Support for the handling of disputes with customers or suppliers through the Business Ombudsman.
- The recognition by the state and local authorities of the coronavirus as a case of force majeure for their public procurement contracts. Consequently, penalties for delays will not be applied.
Ecovis France has prepared detailed information on tax deferrals, financial aid packages, documents and other supplements released by the government. Or you can find all the necessary information on our website. We are at your disposal whenever you have any questions or need our support.
The Maltese Government announced several financial measures aimed at assisting and supporting businesses hit by the COVID-19 slowdown. Through these financial measures, the Government is intervening to safeguard the country’s economy which guarantees the livelihood of the people of Malta and Gozo. The various measures announced include €900 million in bank guarantees, €400 to €700 million in tax deferrals, aid supporting teleworking initiatives, quarantine leave, wage supplement for specific businesses that have suffered due to the COVID-19 pandemic, and other social measures to safeguard employees that had their employment terminated or had to stay at home to take care of school-aged children.
The assistance is directed to support in following major categories: Teleworking Initiatives, Quarantine Leaves, COVID Wage Supplement, Self-Employed Assistance, Social Measures, Other Economic Measures, Guarantees and Soft Loans, Regulatory and other filings.
Regarding tax deferrals, the measures include the postponements of VAT, FS5s (covering Final Settlement System, Social Security Contribution and Maternity Fund), provisional tax and social security payments for the self-employed due by the end of March and April 2020. No interest or penalties will be charged on these postponed tax payments. VAT payments due by March and April 2020 are to be settled in two equal instalments with the two immediately following quarterly returns. FS5s, provisional tax and SSC payments due in March and April 2020 are to be settled in four equal monthly instalments in the four-month period between May and August 2020.
It is important to note that the deadlines for the submission of statutory tax documents will remain unchanged.
It is anticipated that further measures may be announced in due course. Ecovis Malta is ready to provide any immediate assistance requested during this difficult time as well as to support clients in obtaining the supplements and financial aid package.
On 18 March 2020, the government released Emergency Order 29/2020 covering economic, tax and budget measures, which was published in the Romanian Official Gazette no. 230/21.03.2020. It covers:
- Support programme for SMEs.
- The payment terms for taxes on buildings, land tax, transportation vehicles and land charges are prorogued to 30 June 2020. The payment term for local taxes and charges with the 10% bonus for the integral payment is extended to the same date.
- Taxes due for payment starting with the date of effect of this emergency order and unpaid 30 days after the end of the state of emergency are not subject to overdue penalties and interests.
- Payment of profit tax can be treated as a waiver of the stipulations.
- During the state of emergency, SMEs who have totally or partially ceased their activities on the basis of decisions issued by the authorities may benefit from the postponement of payments of some services and utilities.
- The penalties stipulated for delays in execution derived from contracts concluded by SMEs with public authorities are not owed during the state of emergency.
- The benefit of delayed payment for utility services is also applicable to family physician and dental care practices.
- The term for the registration of the declaration concerning the real beneficiary (ultimate controller) is extended until 3 months after the date of the termination of the state of emergency. During the state of emergency, the registration of this declaration is suspended.
The changes to social protection in the emergency order are also issued for the duration of the coronavirus pandemic period. Ecovis Romania is continuously preparing detailed documents to assist clients in understanding and complying with the measures. The documents are sent out upon request by our Romanian office.
Corona-Pandemic: Immediate Taxation, Legal Measures and Financial Aid in Greece, Poland, Estonia, Saudi Arabia, Morocco27.03.2020
The outbreak of COVID-19 is a disaster for many businesses. Countries around the world are working at full speed to provide assistance. In Poland, for example, “zero zones” have been created, with strict control measures. More and more governments are introducing new measures to limit the damage to their economies.
On 23 March 2020, as a result of the dangerous spread of COVID-19, the Greek Government announced important measures to protect businesses in the face of the adverse consequences they may face. These include providing relief, allowances and benefits in the corporate, tax and employment sectors.
- Employment: In addition to asking people to work remotely where possible, the government announced an extension of the deadline or suspension of payment of certified debts relating to social security contributions, as well as arrangements for paying social security debt payments in instalments. There is also some additional suspension of employers’ obligations.
- Enterprise taxation – VAT related measures:
Suspension of VAT debt collection for businesses affected by the outbreak and spread of COVID-19; suspension of debt payments resulting from VAT returns; extension of the deadline for VAT payment; reduction of the VAT rates from 24% to 6% for products needed to protect against coronavirus and prevent its transmission; extensions to debt payment deadlines and suspension of debt payments to the tax authorities are also in force.
- Financial aid: The government is planning an initial company rescue budget of EUR 1 billion. Financing is being prepared for small and medium sized enterprises with an amount up to EUR 3 billion. There is a 4-month suspension of tax obligations for real estate owners.
Ecovis Greece has prepared all the details of the packages to enable fast and efficient processing for clients once the need arises.
On 20 March 2020, the Polish Government announced a state of “epidemic emergency”, effective from 20 March until further notice.
Among other things, the state of epidemic emergency allows the introduction of a temporary restriction on the specific movement of people and the functioning of institutions or workplaces. It allows the Council of Ministers to determine the affected area and define several types of zones. These can be, for example, so-called “zero zones”, which are defined as areas where epidemic conditions have occurred, directly around the virus outbreak. They are subject to bans, orders and control measures. The authorities may prohibit people who are or are suspected of being ill from leaving zero zones. A buffer zone may extend around the zero zone. This is an area subject to such restrictions as a ban on the movement of people.
The Prime Minister also announced an increase in the penalty for violating the quarantine rules, from PLN (Polish zloty) 5,000 up to PLN 30,000.
On 24 March, the Polish government announced more strict restrictions on movement, in particular a ban on leaving home except when necessary (going to work, shopping, going to a pharmacy, visiting a doctor, quick walk), a ban on gatherings of more than 2 people (except for close family or people living together).
Ecovis Poland is committed to delivering the latest legal regulations so all clients can safely survive through this pandemic. We will confirm quickly once all the approved financial aid packages and tax postponements have been put into effect.
The government has following new measures in force:
- Tax debts accruing from 16th March 2020 onwards are not made public.
- Default interest on tax debts is suspended for two months.
- Possibility of paying tax debts in instalments with a lower interest rate.
- Aid to sole traders in paying social tax.
- Temporary suspension of compulsory pension contributions
- Salary compensation is available for up to two months from March to May 2020. Financial aid is provided to companies who suffer revenue losses higher than 30%, in order to secure employment stability.
- Additional sureties provided for the repayment of bank loans by companies (up to EUR 5 million per company).
- Loans for working capital made available (up to EUR 5 million per company; interest rate approximately 5%).
- Limited availability of investment loans.
- Limited compensation for sports and cultural events scheduled for March or April 2020 but now forced to cancelled.
Ecovis Estonia is continuing its professional services and will assist clients in applying for the necessary support from the authorities.
Kingdom of Saudi Arabia
Saudi Arabia has taken extreme measures in dealing with COVID-19 from the early stages. On 18 March 2020, the government requested all those in the private sector to work remotely, with the exception of certain businesses and services.
From 20 March, all domestic flights, public transportation, busses, trains and taxis have been cancelled for a period of 15 days. On 23 March, the government passed a curfew from 7 pm to 6 am, with limited exceptions.
- Due dates for tax filing and payment are postponed for 3 months from the original due dates. This includes income tax, VAT, excise tax, WHT, and Zakat.
- Suspension of penalties related to late payments of instalments, changes in tax returns, audit penalties.
- Acceptance of requests for payments of tax due in instalments without the provision of financial guarantees.
- Accelerated payment of VAT refunds.
- Payment of customs fees postponed for 30 days.
- Exemption of monthly labor fees amounting to SR800\month\labor for a period of 3 months. This is the working permit fee for non-resident employees.
- Reimbursement of issued visas, extension of exit/re-entry visas and postponement of payment of government and municipality fees.
Ecovis KSA has prepared a new tax due date timetable for all clients to meet the new deadlines. We can provide customers with information about financial solutions for clients to overcome the current difficulties.
The government has announced measures in three areas:
- Micro companies, SMEs and professional activities
All measures are put in force until 20 April 2020, with potential extensions.
Measures for micro companies, SMEs and professional activities (e.g. freelancers):
- Companies in difficulty can request the postponement of bank credits until the end of June.
- Leasing dates can also be postponed until the end of June.
- Companies that continue their activity, but encounter cash flow difficulties can request additional credit lines from banks by benefiting from additional guarantees which will be implemented shortly by the CCG (Central Guarantee Fund).
- Suspension of the payment of social charges.
- Deferral of tax declarations and payment of tax due on 31 March 2020 to June 2020 for companies with turnover less than MAD 20 Million.
- Tax audits and third-party notices are suspended until 30 June 2020.
- Companies affected by the crisis, such as tourism and hospitality, with turnover exceeding MAD 20 million can claim the same postponement.
Ecovis Morocco continues to provide professional services during the pandemic and can provide all clients with specific documents and assistance in order to comply with the new measures. We are working on providing information to clients about the extension of tax measures in the coming days.