Corona-Pandemic: Immediate Taxation, Legal Measures and Financial Aid in Germany, Hungary, Czech Republic, Poland, Romania

Since the outbreak of COVID-19 the central European countries are also struggling. The existance of SMEs is at stake. Our Ecovis partners in Germany, Hungary, Czech Republic, Poland and Romania have summarised new temporary legal measures, postponements of taxation due dates and financial aid for businesses and individuals.

Germany

On 13 March 2020, the German Federal Ministry of Finance presented a comprehensive package of measures to cushion the effects of the coronavirus. This includes tax liquidity support for companies and businesses during the crisis.

In order to improve liquidity for companies, the possibilities for deferring tax payments, reducing advance payments and opportunities in the area of enforcement will be improved. In total, companies will be granted the possibility of tax deferrals worth billions of euros:

• The tax authorities can defer taxes if collection would be a considerable hardship.
• Advance payments can be adjusted more easily.
• Enforcement measures (e.g. account seizures) or late payment surcharges are waived until 31 December 2020, as long as the debtor is directly affected by the effects of the coronavirus.

The current support measures are categorised into four types: short-term allowance, entrepreneur loan, ERP start-up loan, and emergency aid for specific regions. However, all measures are only available upon request. Ecovis Germany has prepared all the details of the packages to make the process fast and efficient for clients once the need arises.

Poland

On 18 March 2020, the Polish government announced a package of necessary legal amendments, the Anti-Crisis Shield, in order to protect the Polish economy against the COVID-19 crisis. Among the official legal solutions announced, the following measures are designed to protect employees and the financial liquidity of companies:

• Deferring public levies – PIT, CIT, VAT, social security contributions – with no fees or interest.
• Extending the deadline for submitting the PIT tax declaration until the end of May 2020.
• Contributions to employees’ salaries during a company’s downtime – the state will cover almost half of the salaries and social security contributions (up to 40% of the average pay in the national economy, currently around PLN 5,000 gross).
• Persons employed under civil law contracts will be able to receive a monthly benefit of approximately PLN 2,000 gross.
• Enterprises will receive assistance from the National Economy Bank in the form of interest subsidies on loans.
• The possibility for a company to settle all this year’s loss in the accounting for next year.

Ecovis Poland is monitoring the further postponement of contributions to the Social Insurance Fund (ZUS). As soon as these new measures are announced, Ecovis Poland will be able to assist clients in preparing the agreements in compliance with the policy.

Czech Republic

On 12 March 2020, the Government of the Czech Republic announced a 30-day state of emergency in connection with the detection of the coronavirus / SARS CoV-2. Various emergency measures have been adopted since 6 March 2020.

On 12 March the government imposed a travel ban for both foreigners travelling to the Czech Republic and Czech citizens travelling abroad. There are limited certain exceptions, such as truck drivers, cross-border commuters etc. All stores with the exception of food, drugs, fuel etc. have been closed for 10 days from 14 March and prolongation is expected. Moreover, strict restrictions on free movement within the Czech Republic were introduced starting from 16 March. The latest government measure is the obligation to use protection equipment covering the nose and mouth in starting from 19 March. New laws concerning short-time work and tax benefits as a result of COVID-19 are also being introduced as part of the coronavirus emergency relief package.

Ecovis Czech Republic has been providing clients with the most up-to-date information on complying with all the new measures. In the following days, we aim to provide more details of taxation and financial aid packages released by the authorities.

Hungary

On 17 March, the President of the National Office for the Judiciary issued a presidential order concerning matters of litigation and out-of-court matters during the extraordinary judicial break. However, along with the current situation, this can unfortunately change from day to day.

All indoor gatherings of more than 100 people and outdoor mass gatherings of more than 500 people should be cancelled. In addition, all schools are closed, and all shops, cafés and restaurants must close at 3pm, with food stores, chemists and pharmacies the only exceptions. Due to the coronavirus epidemic, Hungary’s borders are being closed to passenger traffic; the relevant international consultations are currently under way.

Principal and interest payment liabilities on loans taken out by private individuals and businesses up to the present day have been suspended until the end of the year. Additionally, in sectors already struggling with serious difficulties such as tourism, catering, the entertainment industry, sports, cultural services and passenger transportation, employers’ contribution payment liabilities are temporarily cancelled in their entirety for a period extending to 30 June 2020. At the same time, employees’ contributions are also being reduced significantly; they will not be required to pay pension contributions and the health insurance contribution will be reduced to the statutory minimum. In these sectors, the termination of rental agreements and rent increases will not be allowed. The tourism development contribution is also cancelled until 30 June.

Ecovis Hungary is working and is able to meet statutory deadlines. We are also devoted to assisting clients with any tax and accounting related issue during the crisis.

Romania

Against the background of the risk of the spreading COVID-19, the Department of Work and Social Protection (MMPS) is requesting that employers and employees demonstrate flexibility and openness towards the introduction of personalised work schedules and to maintaining normal and true working relations.

Three actions are recommended:

• The introduction of individualised work schedules.
• The temporary modification of the workplace at the employee’s residence, pursuant to the stipulations of the type of work.
• Conducting activity in the form of teleworking.
• For this measure to apply, it is necessary to prepare amendments to individual employment agreements.

Ecovis Romania continues to render 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 temporary tax measures in the coming days.