Corona-Crisis: Impacts on Taxation, Legal Measures and Financial Challenges in the UK, Denmark, Spain, Switzerland and Italy
Since January 2020, the outbreak of COVID-19 has brought dramatic changes and huge impacts on individuals and enterprises worldwide. With the acceleration of the outbreak, all countries have announced temporary legal measures, postponements of taxation due dates and financial aid for individuals and corporates. The Ecovis Network will keep updating you with the new timely policies and support globally during this difficult period of time.
Schools are ordered to close on Mar.13th 2020. Companies are advised to have employees work remotely as far as possible. Though there is nothing specific yet on due dates for postponing for tax filing, HMRC (Her Majesty’s Revenue and Customs) has established a dedicated helpline set up to help businesses and the self-employed on a by case basis which is tailored to individual circumstances and liabilities. HMRS also stated that it will also waive late payment penalties and interest if a business experiences administrative difficulty contacting HMRC or paying taxes due to COVID-19. Business rates are abolished for 12 months for very small businesses and for all businesses of any size in the retail, hospitality and leisure sectors.
The GBP 330 billion package has been announced by the Government on 17 March 2020. Ecovis Wingrave Yeats is working on a communication to support clients in getting through this smoothly.
In late Feburary, Denmark released a help package regarding employees, payment of withhold taxes and VAT. New Initiatives follow continuously.
The Government has provided financial support to individuals and companies in order to avoid further lay-offs in the labour market. Various tax payment and contributions deadlines are postponed for large companies to SMEs. VAT payment deadlines for large companies are postponed for one month. VAT payment terms for SMEs are postponed for three to six months. Payment terms for employee tax is postponed for four months. There are packages to support companies who are suffering 40% or higher revenue losses. For more details of VAT/CIT/ tax contributions, Ecovis Denmark is working on continuous updates to assist clients in compliance with the latest measures. (https://ecovis459.activehosted.com/social/d67d8ab4f4c10bf22aa353e27879133c.42)
The Spanish Government has declared a State of Emergency on 15 March 2020 through Royal Decree 463/2020 confining people in its home and closing most businesses and leisure venues. Due to legal regulations the State of Emergency will last for 15 days but an extension is very likely.
The Government has issued Royal Decree 465/2020 to complement the declaration of emergency and that was published in the latest Spanish Official Gazette with immediate effect.
The aim of the decree was to try to lessen the impact on companies affected by the declaration of emergency and the closures of businesses mandated by this declaration.
As for financial support, the most important measure was to institute a programme of public credit guarantees for an amount of EUR100.000 million. However, this measure still needs to be investigated as the main risk takers will initially be the banks. Ecovis Madrid will release further updates once this becomes more solid.
In addition to the financial support, the Royal decree also contained important measures concerning the temporary regulation and suspension of employment contracts, delays in the payment of taxes, suspension of administrative timelines. Ecovis Legal Spain can provide details and support to clients in complying with the temporary measures.
The Swiss government and authorities have released various measures; however, the most important information from an economic perspective is:
- compensation for reduced working hours starts after a waiting period of 1 day (previously 3 days)
- debt enforcement is suspended from 19 March until 4 April 2020
- the government is making it easier to get repayable loans
Ecovis Switzerland will provide updated information and tailored solutions to support clients.
Employers are prevented from collecting any information relating to the occurrence of flu symptoms among employees or their acquaintances. Also, employers are obliged to inform employees of the risks of the working environment. From 17 March 2020 and for the following 60 days the employer, regardless of the number of employees, may not withdraw from the contract for objective reasons.
For all taxpayers, payments that expired on 16 March 2020 have been postponed to 20 March 2020. Tax duties other than payments, such as the VAT return, expiring in the period between 8 March 2020 and 31 May 2020 are postponed to 30 June without penalties. The deadline for submission of annual certification of income paid in 2019 remains the same: end of March 2020.
The legal decree approved on 17March 2020 provides for the suspension of payments expiring between 8 March and 31 May 2020 arising from tax bills issued by the tax collection agents as well as from tax assessment notices issued by the Italian Revenue Agency and from bills issued by social security contributions authorities. The suspended payments shall be carried out by 30 June 2020.
Various timely and targeted measures have been released and are changing continuously. Ecovis Italy aims to provide the most immediate information and support to all the clients during this crisis.