COVID Campaigns Continue
Kitty Miv, Editor
03 February, 2021
Last week we looked at the potential tax moves afoot in the United States over the coming months, which nevertheless come with the caveat that the Coronavirus pandemic must be brought under control as much as possible, and the economic damage that has been wrought both on the wider economy and the finances of businesses and individuals must be addressed.
The same, of course, holds true elsewhere in the world, and in this week's column, we will undertake one of our periodic reviews of the COVID-19 measures put in place recently, starting with Singapore and the Netherlands, where both governments have sought to make things easier for tax debtors.
In Singapore, the Inland Revenue Authority released a statement on the tax treatment of debts forgiven under a newly launched Ministry of Law initiative, intended to help viable businesses restructure their debts. Introduced in response to COVID-19, Singapore's Ministry of Law announced that it has established a Simplified Insolvency Programme (SIP) to assist micro and small companies that require support to restructure their debts or to wind up their company.
In the Netherlands, meanwhile, the support on offer is more tailored to businesses on a day-to-day basis. Under a scheme put in place in 2020, businesses are able to defer payment of numerous taxes (income tax, the health insurance levy, corporate tax, payroll taxes, and VAT). Initially, businesses had been granted an automatic exchange of up to three months and thereafter they could request an extension by submitting a request by October 1, 2020. This deadline to submit a request was subsequently extended until the end of 2020.
Under the first iteration of the scheme, tax debts were required to paid starting January 1, 2021, over a 24-month period. In September 2020 the Government announced that businesses would be allowed 36 months to pay these amounts and would be required to do so only from July 1, 2021. It said interest on tax debts would be charged at 0.1 percent until December 31, 2021.
However, the Dutch Government has now announced that businesses may continue to submit a request for deferment until July 1, 2021, and these businesses need not pay back their tax debts until October 1, 2021, rather than from July 1, 2021. The Government has also said the Tax and Customs Administration is to begin working with businesses with tax debts that need to restructure these debts.
Norway has also focused its economic sights on deferrals, with the Ministry of Finance announcing an extension to a scheme that allows taxpayers to defer payment of certain taxes, including value-added tax. The scheme allows businesses to defer payment of most taxes and duty due if they have been financially affected by the COVID-19 pandemic.
Previously, the Ministry extended the deferral scheme to taxes falling due up to February 28, 2021, and announced that businesses would be required to pay the deferred tax in six monthly instalments, with the first instalment due on April 1, 2021. The Ministry has now said taxpayers will be granted until July 30, 2021, to begin paying in six monthly instalments.
In Germany and Austria, government efforts were targeted at providing relief to cross-border workers who have been affected by COVID-19 restrictions on movement. A deal reached between the two provides that days spent working from home as a result of COVID-19 will be considered to be spent in the contracting state where the worker normally exercises their employment for tax purposes. The agreement does not apply to days that would have been spent working from home prior to the introduction of the crisis measures.
The deal will apply at least until March 31, 2021, and will be extended month to month unless it is terminated by either territory. The agreement applies to days worked since March 11, 2020.
Until next week!
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