Corona-Pandemic: Immediate Taxation, Legal Measures and Financial Aid in the US, Canada, Uruguay, Paraguay and Peru
Since the outbreak of COVID-19 we have seen dramatic changes and huge impacts on enterprises worldwide. Our Ecovis partners in the US, Canada, Uruguay, Paraguay and Peru have summarized new temporary legal measures, postponements of taxation due dates and financial aid for corporates and individuals.
US
Treasury Secretary Steven Mnuchin stated, during a press conference on 17 March, that the Internal Revenue Service (IRS) will allow taxpayers to defer payments for 2019 tax returns until 15 July, subject to certain caps. For individuals, the amount of tax which can be deferred, is up to USD 1 million. Corporations can defer up to USD 10 million. These limits were selected to provide benefits to small businesses which report income through pass-through entities such as partnerships or S corporations. He indicated that the net impact of this action by the IRS will be to put USD 300 billion into the economy as another measure to minimize the consequences of the coronavirus pandemic.
Ecovis associate partner, Marcum is monitoring all the changes on tax payments, state tax due dates and other new taxational measures, keeps sending the latest information to all clients.
Canada
On 18 March 2020 the Canadian Government has announced various deadline extensions for filing.
- Personal tax deadlines were previously due on 30 April, 2020 will now be extended until 1 June, 2020
- Payment deadlines for personal tax returns have been extended to 31 August, 2020
- Estates and trusts with a 31 December year-end have had their filing deadline extended until 1 May, 2020 from 31 March, 2020
- Corporation and partnership filing deadline extensions yet announced
Ecovis Canada is closely monitoring when the financial support measure of the promised CAD 82 Billion package released.
Uruguay
On 13 March, Uruguay detected the first four imported cases of Covid-19 in the country. On the same day, the Uruguayan Government declared the national state of emergency and suspended all public events or shows. Since then, every day the government has taken harsh and quick measures to stop the spread of the virus such as the closure of schools, international borders and some businesses such as shopping centers. The government is also controlling the enforcement of the quarantine with the help of the police and has encouraged businesses to implement remote work.
Ecovis Uruguay has provided consultancy services on following major aspects:
- Extension on unemployment insurance
- Employee layoff
- Tax due dates
On 18 March, 2020 the government has released a decree which extends the unemployment insurance on specific sectors such as hotels, restaurants, bars, cultural and events services and travel agencies.
Until today, the government has not adopted a position towards extending tax due dates or regarding employee layoff.
Ecovis Uruguay is monitoring all the immediate changes on taxation and labor law in order to assist all clients to respond quickly and compliantly.
Paraguay
Suspension of judicial and administrative activities, as well as the corresponding suspension of registration, administrative and procedural deadlines, from 12 March to 26 March in order to mitigate the spread of the coronavirus (covid-19)
Until 30 April, 2020 taxpayers of personal income tax may pay their 2019 obligation in up to six installments without interest.
Until 30 June, 2020, fines sanctions for breach of formal duties, will not be applicable to taxpayers who meet their tax obligations late. Short-term line of credit for operating capital of up to PYG 5,000,000,000 with 180-day term at rates of 7% for PYG and 5% for USD
The Central Bank has also released exceptional measures to support local economy, such as current regulatory regime modification and expansions, extension of asset disposals.
Ecovis Paraguay supports client’s portfolio in assessing all measures in order to make the best decision to mitigate the impact of this situation on their business.
Peru
Due to COVID-19 and in order to protect individual taxpayers facing liquidity/cash-flow and administrative issues, the Peruvian Tax Authority has postponed annual income tax return filing due dates until 24 June, 2020 (taxpayers with net incomes during 2019 less than 9 million PEN).
Also, for those taxpayers, the monthly tax return (VAT and advance income tax) that corresponds to February 2020 was postponed to the first week of April.
The Superintendence of Banking, Insurance and Pension Funds (SBS) issued an official statement in which it authorized the entities of the financial system to adopt exceptional measures to facilitate the payment of debts of natural and legal persons, within the framework of the State of Emergency decreed by the Executive to face the coronavirus.
Ecovis Peru will issue its clients the latest regulations and timely policies during the pandemic period.