The Effect of Coronavirus (COVID-19) Pandemic on VAT Measures

The global outbreak of coronavirus (COVID-19) has significantly affected businesses as well as their staff members. Hence, several different countries across the globe are taking appropriate measures.

  • United Arab Emirates – as restrictions were implemented on the movement of vehicles and individuals in certain areas in the region, deadlines for VAT returns filing is moved to the 28th of May while payment of tax due to the FTA has a new deadline, 31st of May 2020.
  • Australia – offering spending credits for goods and services liabilities.
  • Austria – submission for annual VAT returns was extended to Aug 31, 2020. In addition, installment and deferral of payments can be made possible on a case to case basis.
  • Belarus – Belarusian government isn’t rushing when it comes to the adaptation of measures in order to combat the pandemic. The borders were, in fact, open and the entire country isn’t on lockdown. Not a single quarantine policy has been introduced.
  • Belgium – the region has postponed its deadlines for paying VAT and filing of VAT returns. No VAT will be charged as well for medical equipment that is donated to hospitals.
  • Canada – Canada has provided tax reliefs from a relief brand that was recently announced.
  • China – the country has offered VAT reliefs in order to combat the impact of the pandemic.
  • Colombia – it has provided terms for delayed VAT payment for the 1st semester of the year.
  • Costa Rica – it provided a three-month-long payment deferment for VAT starting the 15th of March.
  • Cyprus – it has suspended the obligation in paying VAT temporarily with VAT gradually settled by November 11, 2020. Companies that are eligible have turnovers that aren’t more than EUR 1M as per the 2019 submitted tax returns or those with turnovers that have decreased twenty-five percent due to the pandemic.
  • Czech Republic – its government provided reliefs in combatting the pandemic such as deferral for VAT payments when requested by taxpayers, wavering of interests for late payments, deferring of interest for deferral of tax, wavering of fines for tax returns that were submitted late, wavering of fines for failure in submitting control reports, wavering of administrative charges or exemption from customs duties and VAT on products that were imported from 3rd countries which benefit disaster victims.
  • Denmark – its parliament will be implementing a bill that enables SMEs in applying for interest-free loans which are equal to the amount paid on VAT in the latest returns they have submitted.
  • Finland – fees for late returns submission may be waived when the taxpayer is able to provide justification e.g. illness.
  • France – its government doesn’t allow payment deferral or VAT reduction even with the crisis; however, it temporarily relaxed paper invoicing rules and VAT calculation policies.
  • Georgia – the country has doubled its funding for VAT credit refunds for companies.
  • Germany – it has offered businesses that were affected by the outbreak option in applying for delayed payment for VAT from March 13. This includes other kinds of taxation.
  • Greece – VAT due payments between Mar 11 and Apr 30 are suspended up ‘til Aug 31 for certain industries.
  • Hungary – it appealed to European Commission in exempting medical equipment import which is necessary in overcoming coronavirus from VAT and customs duties and this includes ventilators and faces masks.
  • Ireland – application of late payment interest has been suspended for SMEs starting Jan to Apr of 2020.
  • India – it has provided an extension to the time limit for the GST filing for Mar to May of the current year. It’s also deferred the implementation of their newest system for return filing and online invoice registration up until Oct 1.
  • Indonesia – it said it’s going to waive ten percent of the consumption taxes implemented in Bali and other destinations flocked by tourists for months. It’s also planning on granting an extension for VAT import payments as well as provide boosted credit repayments for VAT for manufacturers.
  • Italy – it applied further delay for VAT fulfillment and payment deadlines.
  • Jamaica – it plans in cutting General Consumption Tax to fifteen percent.
  • Japan – it is considering having a reduction in the consumption tax to five percent. The country already delayed the payments and filing deadlines for one month ‘til April.
  • Latvia – in order to provide support to businesses with the outbreak, it introduced new measures in speeding up processes for overpaid VAT refunds.

Other countries have implemented welcome measures to provide relief to their taxpayers. If you want to know more about VAT and the impact of COVID-19 on regulations, call us here in VAT Registration UAE.