European Union / International Emergency Tax Measures in Response to the COVID-19 Pandemic - IBFD
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European Union / International
Emergency Tax Measures in Response to the COVID-19 Pandemic
Julie Rogers-Glabush[*]
Teresa Morales[**]
Issue: European Taxation, 2020 (Volume 60), No. 7
Published online: 15 April 2020
In response to the threat and impact of the COVID-19 virus, various European countries have enacted,
or are in the process of enacting, tax measures to mitigate the economic fallout and provide a certain
measure of security to their citizens. The following note, which will be updated as events unfold,
summarizes the measures that have been introduced to date.
Update 18 March 2020: Bosnia and Herzegovina, Greece, Luxembourg and Slovak Republic added.
Update 20 March 2020: Ireland, Latvia, Lithuania, Portugal, Russia, Ukraine and United Kingdom added;
Belgium, Bosnia and Herzegovina, Denmark, Romania and Spain expanded on.
Update 24 March 2020: Cyprus, Estonia, European Union, Finland, Hungary, Iceland, Isle of Man, Italy,
Kosovo, Malta, Monaco, Montenegro, Poland, Serbia, Slovenia, Turkey and Uzbekistan added; Bulgaria,
Denmark, Germany, Latvia, Netherlands, Romania and Spain expanded on.
Update 26 March 2020: Croatia, Gibraltar, Liechtenstein, Moldova, San Marino, Switzerland and EU
institutions added; Belgium, Bulgaria, Czech Republic, France, Greece, Hungary, Ireland, Italy, Lithuania,
Luxembourg, Netherlands, Norway, Poland, Russia, Slovak Republic and United Kingdom expanded on.
Update 1 April 2020: Andorra added; Austria, Belgium, Bulgaria, Croatia, Czech Republic, Denmark,
France, Greece, Iceland, Ireland, Isle of Man, Liechtenstein, Moldova, Netherlands, Norway, Poland,
Portugal, Romania, Russia, Serbia, Slovenia, Turkey, Ukraine, United Kingdom and EU institutions
expanded on.
Update 8 April 2020: Guernsey and Jersey added; Austria, Belgium, Bulgaria, Cyprus, Denmark, France,
Germany, Greece, Hungary, Ireland, Italy, Luxembourg, Moldova, Montenegro, Netherlands, Norway,
Poland, Portugal, Russia, San Marino, Serbia, Slovenia, Spain, Turkey and EU Institutions expanded on.
1. Introduction
By 8 April 2020, most European countries (representing almost all Member States of the European Union) had announced
emergency tax measures to support taxpayers affected by the COVID-19 outbreak.
The vast majority of countries (44 countries) have announced measures focused on the collection of taxes, extending deadlines
for filing tax returns without generating interest or penalties, the suspension of tax prepayments or the adjustment to advance
payments on the basis of a revised anticipated tax liability. These measures mostly apply to corporate and individual income
and withholding tax returns, periodic VAT returns or social security contributions, and, to a lesser extent, to real estate and net-
worth taxes, customs or stamp and excise duties. Schemes can apply automatically or subject to the fulfilment of conditions
(for example, corresponding application by the date specified, proof of impact by COVID-19 or having the status of a small or
medium-sized enterprise).
In this regard, 39 countries have announced the automatic extension of filing or payment deadlines; of those, 21 countries apply
such automatic deferral to corporate income taxes, 17 to personal income taxes, 17 to social security contributions and 16 to
VAT. Only four countries have implemented an automatic deferral for all taxes, although this number increases to 20 in case of
countries implementing a general deferral subject to the fulfilment of conditions. Additionally, 7 countries have announced their
intention to enhance the speed of VAT and certain tax refunds.
* Tax lawyer, Canada. Editor of European Taxation and IBFD International Tax Glossary .
The authors can be contacted at j.rogers@ibfd.org .
** Associate, IBFD. Member of the EU Tax Law Study Group.
J. Rogers-Glabush & T. Morales, Emergency Tax Measures in Response to the COVID-19 Pandemic, 60 Eur. Taxn. 7 (2020), Journal Articles & Papers 1
(accessed 20 April 2020).
© Copyright 2020 IBFD: No part of this information may be reproduced or distributed without permission of IBFD.
Disclaimer: IBFD will not be liable for any damages arising from the use of this information.
Exported / Printed on 21 Apr. 2020 by IBFD.Over half of the European countries (27) have taken further action to reduce the tax burden of businesses and households
including, among other tax incentives, exemption of the payment of bonuses to employees, reduction in social security
contributions, compensation schemes for fixed business expenses and for the self-employed, reduced VAT tax rates or customs
duties for certain goods and services, tax holidays or reduction of taxes for certain sectors such as tourism, entertainment and
transport, carry-back of losses for income tax returns and super deductions or accelerated depreciation of fixed assets in the
corporate income tax. Most tax incentives predominantly concern the taxation of corporate income (16 countries), individual
income (10 countries) and social security contributions (11 countries).
Certain of these incentives have been implemented for specific sectors, such as tourism, entertainment and construction; or for
certain activities, such as the inclusion of tax credits of expenses for advertising investments, for expenses incurred in sanitizing
the workplace or e-working facilities, leasing agreements or renting qualifying commercial properties and donations of medical
goods.
Additionally, some provisions on tax procedures have been temporally amended in 18 countries. In this regard, 10 countries have
suspended deadlines in respect of certain tax procedures, 7 countries their debt enforcement activity and 6 countries the tax audits.
Specific situations arisen by the COVID-19 crisis have also been subject to tax regulation, such as the status of frontier workers e-
working at home (4 countries), residency and permanent establishment of companies (3 countries) or a VAT exemption or import
duties on medical goods (10 countries).
EU institutions are also taking relevant measures that will have an impact on the tax policies of EU Member States, such as the
relaxation of State aid rules or budgetary constraints. As requested by some Member States, the European Commission decided
to exempt imports of medical products related to the fight against COVID-19 from customs duties and VAT.
In the authors’ view, these emergency tax policy measures , aimed at supporting households and improving the liquidity for
businesses, are in line with the action plan suggested by the OECD.[1]Overall, the announced measures can improve the liquidity of
households and businesses in the short term by means of a wide range of deferrals or temporary reductions, alleviating difficulties
in meeting tax reporting and payment obligations. Additionally, measures related to the status of frontier workers under tax treaties
taken by some European countries follow a similar approach to OECD’s guidance on this regard.[2]
Nevertheless, action in terms of tax incentives for companies and individuals can still be expanded upon in many European
countries (e.g. cash benefits for individuals, special support packages for small or medium-sized enterprises, waiver of employer
and employee social security contributions and payroll related taxes, reduction of taxes for most vulnerable sectors or loss
carry-forward provisions for companies and individuals). There is also scope for further coordinating action and harmonization
of measures among European countries.
2. Andorra
On 1 April 2020,[3]Law 3/2020 of 23 March 2020 on the exceptional and urgent measures caused by the COVID-19 pandemic
(the Omnibus Law) was published in the Official Gazette. The Omnibus Law entered into force on the date of publication in the
Official Gazette.
The relevant tax measures include:
- deferral of the payment of the tax due arising from tax returns submitted to the tax authority independently if the taxes due
are in relation to personal tax debts, payment of withholding taxes or other tax obligations independent of their nature. The
deferral is not automatic, but must be requested by the taxpayer through the filing of the relevant form. Likewise, the deferral
will not entail any obligation to contribute new guarantees and it will not accrue any interest for late payment. The measure
will be in force until the parliament decides on the termination of the measures through another law declaring the end of the
emergency period;
- deferral of the payment related to the business activities tax. The measure will be in force until the parliament decides on the
termination of the measures through another law declaring the end of the emergency period;
- reduction from 50% to 20% of the advance payment in relation to corporate income tax calculated on the basis of the taxes
due of the previous financial year;
1. OECD – COVID-19 pandemic: OECD publishes suggestions to tax administrations on measures to take (23 Mar. 2020), News IBFD.
OECD – COVID-19 pandemic: OECD publishes immediate tax policy responses to be considered by governments (24 Mar. 2020), News IBFD.
2. OECD – COVID-19 pandemic: OECD Secretariat releases guidance on impact of Covid-19 crisis on international tax treaty rules (6 Apr. 2020), News IBFD.
3. Andorra – COVID-19 pandemic: emergency tax measures – gazetted (1 Apr. 2020), News IBFD.
J. Rogers-Glabush & T. Morales, Emergency Tax Measures in Response to the COVID-19 Pandemic, 60 Eur. Taxn. 7 (2020), Journal Articles & Papers 2
(accessed 20 April 2020).
© Copyright 2020 IBFD: No part of this information may be reproduced or distributed without permission of IBFD.
Disclaimer: IBFD will not be liable for any damages arising from the use of this information.
Exported / Printed on 21 Apr. 2020 by IBFD.- reduction from 50% to 20% of the advance partial payment related to personal income tax calculated on the basis of the taxes
due of the previous financial year. Freelancers have the option to pay either 2% of the total gross income as declared in the
previous tax return or 20% of the tax due according to the tax return submitted the previous financial year;
- reduction in the tax base of the corporate income tax, personal income tax and non-resident income tax as a consequence of
the decisions related to the leasing agreements contained in the Omnibus Law (the Omnibus Law establishes that payments
of certain leasing agreements are reduced or provisionally suspended depending on the business activities performed on the
premises during the COVID-19 outbreak); and
- no obligation for landlords to proceed with the payment of VAT if they have not collected the entire monthly rental fee from the
lessee as a consequence of the extraordinary measures contained in the Omnibus Law.
The Omnibus Law establishes a suspension in the payments of certain leasing agreements or a reduction in the payments arising
from leasing agreements related to premises dedicated to economic, business or commercial activities from 14 March 2020 until
the day following the day that the government declares the end of the emergency situation caused by COVID-19. The reductions
are: a 100% reduction for businesses obliged to close activities; an 80% reduction for businesses obliged to close but that are
obligated to remain available for urgencies or emergencies; and a 50% reduction for businesses allowed to remain open (such
as those related to goods considered basic necessities).
3. Austria
3.1. Extension of filing deadlines and adjustment of prepayments
On 13 March 2020,[4]the Ministry of Finance announced certain key measures in response to the COVID-19 virus outbreak.
In order to improve the liquidity of taxpayers, tax prepayments for individual and corporate income tax purposes may be reduced
to zero upon request. Late payment penalties may be reduced or waived upon request. Finally, the tax authorities may defer taxes
if their collection would lead to significant hardship or agree to payments in instalments.
On 25 March 2020,[5]the Ministry of Finance announced that the deadlines for filing the annual tax return for corporate income tax
purposes, individual income tax purposes and the annual VAT return for the tax year 2019 have been extended to 31 August 2020.
3.2. Additional measures for individuals and COVID-19 related acts
On 4 April 2020,[6]the lower house of the parliament ( Nationalrat ) approved a bill containing several tax-related measures with
regard to the COVID-19 pandemic ( 3. COVID-19-Gesetz ). Key elements of the bill are as follows:
- bonus payments up to EUR 3,000 to employees as a reward for special efforts during the COVID-19 pandemic are exempt
from tax and social security payments in 2020;
- rules on relief for commuting expenses, e.g. lump-sum deduction, travelling tax credit and deduction for commuters remain
fully applicable regardless of the time and days spent at home due to the COVID-19 pandemic;
- any support measures received from public funds to fight the COVID-19 pandemic are tax exempt;
- documents or official acts in connection with the COVID-19 pandemic are exempt from stamp duties;
- already retired doctors who return to active practicing due to the COVID-19 pandemic will not suffer any adverse tax
consequences, e.g. any tax benefits in the form of reduced tax rates in connection with the sale or giving up of a medical
practice will remain applicable; and
- certain running deadlines in respect of financial crime proceedings will be interrupted until 1 May 2020 in order to avoid
disadvantages for concerned individuals (e.g. deadlines for motion for reconsideration, motion for reinstatement, demur to
declare for the record, etc.).
4. Austria – COVID-19 pandemic: emergency tax measures (17 Mar. 2020), News IBFD.
5. Austria – COVID-19 pandemic: emergency tax measures – filing deadlines extended (27 Mar. 2020), News IBFD.
6. Austria – COVID-19 pandemic: emergency tax measures – parliament approves further measures (6 Apr. 2020), News IBFD.
J. Rogers-Glabush & T. Morales, Emergency Tax Measures in Response to the COVID-19 Pandemic, 60 Eur. Taxn. 7 (2020), Journal Articles & Papers 3
(accessed 20 April 2020).
© Copyright 2020 IBFD: No part of this information may be reproduced or distributed without permission of IBFD.
Disclaimer: IBFD will not be liable for any damages arising from the use of this information.
Exported / Printed on 21 Apr. 2020 by IBFD.4. Belgium
4.1. Instalment payments
On 12 March 2020,[7]the Ministry of Finance announced the following measures:
- taxes may be paid in instalments;
- in the event of late payment, no late payment interest will become due; and
- penalties for not paying taxes will be waived.
Taxpayers wishing to avail themselves of the measures must file an application by 30 June 2020. The measures are available in
respect of the business pre-levy (i.e. wage tax), corporate income tax, personal income tax, VAT and the tax on entities that are
not subject to corporate income tax, such as certain foundations.
4.2. VAT
The Belgian authorities[8]have taken the following measures with respect to VAT in order to help companies overcome the
COVID-19 situation.
4.2.1. Postponement of filing of VAT returns
4.2.1.1. Periodic returns
- return for February 2020, normal deadline was 20 March 2020, deadline extended until 6 April 2020;
- return for March 2020, normal deadline was 20 April 2020, deadline extended until 7 May 2020; and
- return for the first quarter of 2020, normal deadline was 20 April 2020, deadline extended until 7 May 2020.
Starting companies qualifying for a monthly refund or holders of a licence for a monthly refund are also granted a delayed deadline,
but only until the 24th of the month following the filing period.
4.2.2. EU sales listing
- statement for February 2020: normal deadline was 20 March 2020, deadline extended until 6 April 2020;
- statement for March 2020: normal deadline was 20 April 2020, deadline extended until 7 May 2020; and
- statement for the first quarter of 2020, normal deadline was 20 April 2020, deadline extended until 7 May 2020.
4.2.3. Annual customer listing
The normal deadline is 31 March 2020; this deadline has been extended until 30 April 2020. If the taxpayer has ceased its
activities, the annual customer listing must be submitted at the latest at the end of the fourth month following the cessation of
its activities subject to VAT.
4.2.4. Payment of VAT
An automatic deferral of payment of two months for VAT without having to pay fines or interest applies. This deferral will apply to:
- VAT payment for monthly return – February 2020, normal deadline was 20 March 2020, deadline extended until 20 May 2020;
- VAT payment for monthly return – March 2020, normal deadline was 20 April 2020, deadline extended until 20 June 2020; and
- VAT payment for monthly return – first quarter of 2020, normal deadline was 20 April 2020, deadline extended until 20 June
2020.
4.2.5. Exemption on gifts of medical goods to hospitals
On 24 March 2020,[9]the government noticed that many healthcare institutions in Belgium face certain shortages of goods in
the context of the fight against the coronavirus, while other taxpayers are prepared to supply available stocks of goods to those
7. Belgium – COVID-19-related taxation measures announced (16 Mar. 2020), News IBFD.
8. Belgium – COVID-19 pandemic: emergency VAT measures taken (19 Mar. 2020), News IBFD.
9. Belgium – COVID-19 pandemic: emergency measures – no VAT on gifts of medical goods to hospitals (25 Mar. 2020), News IBFD.
J. Rogers-Glabush & T. Morales, Emergency Tax Measures in Response to the COVID-19 Pandemic, 60 Eur. Taxn. 7 (2020), Journal Articles & Papers 4
(accessed 20 April 2020).
© Copyright 2020 IBFD: No part of this information may be reproduced or distributed without permission of IBFD.
Disclaimer: IBFD will not be liable for any damages arising from the use of this information.
Exported / Printed on 21 Apr. 2020 by IBFD.institutions. However, the VAT levied on those gifts of goods (VAT on a deemed supply) may hinder such donations, despite the
fact that there are potential and real needs. Under certain conditions, no VAT will be levied on gifts made by taxable persons
providing goods to certain healthcare institutions for their use in the context of their usual activities (statement of 24 March 2020,
Circular 2020-C-46 of 24 March 2020).
The goods concerned are medical devices and their fittings (including software), and protective equipment for care providers and
patients. Medicines are excluded from the scope of this measure.
The measure applies to goods that are donated directly to healthcare institutions, mainly hospitals, and covers taxable persons
that have purchased or produced goods for such purpose if the right to full or partial deduction of VAT has arisen for a good or
its components. However, it does not only concern producers and distribution companies, but also, for example, taxable persons
that have purchased goods in order to use them in the context of their economic activities or for the purpose of donating them
in the context of the fight against the coronavirus.
As proof of the taxpayer-donor having donated the goods in question to an healthcare institution free of charge, a document must
be drawn up for each donation being made in which the relevant healthcare institution confirms that the goods are obtained free
of charge and will use the goods in question either itself in the context of providing care or make them available free of charge
to another healthcare institution.
The measure is applicable for gifts from 1 March 2020 until 30 June 2020.
4.2.6. Quick refunds
Among other measures, the Ministry of Finance, on 28 and 29 March 2020,[10]announced a quick VAT refund procedure. Taxable
persons filing monthly VAT returns may electronically file a quick VAT refund request for the period from February 2020 until 3
April 2020. This refund is granted if the following cumulative conditions are met:
- the amount of the refund is at least EUR 245;
- all returns for 2020 must have been filed;
- the account number into which the refund must be paid is known to the relevant administration; and
- the refund may not be contested due to seizure by third parties or the transfer of a debt claim.
If these conditions are met, the refund will be paid by 30 April 2020 at the latest.
Other VAT returns for February 2020 must be filed by 6 April 2020 if no request for refund has been made.
4.3. Frontier workers
On 17 March 2020,[11]the Belgian Ministry of Finance published a mutual agreement of 16 March 2020, on the taxation of frontier
workers under the Belgium-Luxembourg Income and Capital Tax Treaty (1970) (as amended through 2009) (the Treaty).[12]
Based on article 15 of the Treaty, employees are generally taxed in the state of employment. A mutual agreement of 16 March
2015 provides that for the application of this main rule such employees may not work more than 24 days in the state of residence
or a third country.
The agreement of 16 March 2020 provides that as from 14 March 2020, the days that employees are e-working at home due to
the COVID-19 pandemic will not be taken into account for the calculation of the 24-day rule. This means that such employees
remain taxable in the state of employment.
4.4. Extension of deadlines
The Ministry of Finance, on 28 and 29 March 2020,[13]announced various additional measures to mitigate the effects of
the COVID-19 crisis. Details are summarized below.
10. Belgium – COVID-19 pandemic emergency tax measures – further corporate income tax, personal income tax, wage tax and VAT measures taken (30 Mar.
2020), News IBFD.
11. Belgium; Luxembourg – COVID-19 pandemic: agreement on taxation of frontier workers (26 Mar. 2020), News IBFD.
12. Convention between Belgium and Luxembourg for the Avoidance of Double Taxation and the Regulation of Certain Other Questions Relating to Taxes on
Income and Capital [unofficial translation] (17 Sept. 1970) (as amended through 2009), Treaties & Models IBFD.
13. Belgium – COVID-19 pandemic emergency tax measures – further corporate income tax, personal income tax, wage tax and VAT measures taken (30 Mar.
2020), News IBFD.
J. Rogers-Glabush & T. Morales, Emergency Tax Measures in Response to the COVID-19 Pandemic, 60 Eur. Taxn. 7 (2020), Journal Articles & Papers 5
(accessed 20 April 2020).
© Copyright 2020 IBFD: No part of this information may be reproduced or distributed without permission of IBFD.
Disclaimer: IBFD will not be liable for any damages arising from the use of this information.
Exported / Printed on 21 Apr. 2020 by IBFD.- corporate income tax, tax on non-legal entities and tax for non-resident companies. The filing deadline has been extended
from 16 March to 30 April 2020; and
- payment of business pre-levy. The payment deadlines for the business pre-levy (i.e. wage tax) are amended as follows:
- for the February 2020 period, the deadline is extended to 13 May 2020;
- for the March 2020 period, the deadline is extended to 15 June 2020; and
- for the entire first quarter of 2020, the deadline is also extended to 15 June 2020; and
- payment of personal income tax, corporate income tax, tax for non-legal entities and tax for non-residents. The payment period
for any tax debt arising from 12 March 2020 will be extended by two months without interest becoming due. With respect to
personal income tax and corporate income tax, this measure will also apply to tax debts that arose before 12 March 2020.
4.5. Adjustment of advance payments
On 3 April 2020,[14]the tax administration published reduced advance tax payment rates for self-employed persons and companies
to mitigate the effects of the COVID-19 pandemic. The new rates are as follows:
- first quarter: 3% for self-employed persons, 9% for companies not paying dividends and 9% for companies paying dividends;
- second quarter: 2.5% for self-employed persons, 7.5% for companies not paying dividends and 7.5% for companies paying
dividends;
- third quarter: 2.25% for self-employed persons, 6.75% for companies not paying dividends and 6% for companies paying
dividends;
- fourth quarter: 1.75% for self-employed persons, 5.25% for companies not paying dividends and 4.5% for companies paying
dividends;
- companies purchasing own shares or reducing their capital; and
- companies paying or granting dividends between 12 March 2020 and 31 December 2020.
In the case of insufficient prepayments, a surcharge becomes due. This surcharge is computed by multiplying 2.25% by a basic
interest rate, i.e. the reference interest rate of the National Bank of Belgium on 1 January of the year during which the income
is earned. Currently, the surcharge rate is equal to 7% and is calculated on 103% of the amount of tax due less immovable
withholding tax payments, movable withholding tax, domestic tax credits and the credit for foreign taxes paid (article 46992 of the
Income Tax Act and article 233/1 of the Royal Decree to the Income Tax Act).
The payment dates remain 10 April, 10 July, 10 October and 20 December 2020.
4.6. Ruling for tax-free e-work cost compensation
The Belgian tax administration published a form allowing employers to request a ruling to be allowed to grant a tax-free cost
compensation of EUR 126.94 per month to employees who are e-working due to the COVID-19 crisis. This compensation covers
costs for furnishing and using a desk, printer and computer equipment, office supplies, utilities such as water, electricity and
heating, maintenance, insurance and withholding tax on immovable property in the employee’s place of residence.[15]
5. Bosnia and Herzegovina
On 13 March 2020,[16]the government of the Republic of Srpska announced the following tax and economic measures aimed at
mitigating the effects of COVID-19 for taxpayers:
- postponement of payments of corporate income tax returns until 30 June 2020. The tax due should be paid in instalments
until the end of 2020;
- prompt payment of tax refunds and social contributions paid on any increase in salaries under the Law on Incentives in the
Economy of the Republic of Srpska ( see Bosnia and Herzegovina-1, News 17 June 2019 ); and
14. Belgium – COVID-19 pandemic: emergency tax measures – adjusted percentages for advance payments published (6 Apr. 2020), News IBFD.
15. Belgium – COVID-19 pandemic: emergency tax measures – tax authorities provide possibility to request ruling for tax free e-work cost compensation (3 Apr.
2020), News IBFD.
16. Bosnia and Herzegovina – COVID-19 pandemic: emergency tax measures announced in Republic of Srpska (17 Mar. 2020), News IBFD.
J. Rogers-Glabush & T. Morales, Emergency Tax Measures in Response to the COVID-19 Pandemic, 60 Eur. Taxn. 7 (2020), Journal Articles & Papers 6
(accessed 20 April 2020).
© Copyright 2020 IBFD: No part of this information may be reproduced or distributed without permission of IBFD.
Disclaimer: IBFD will not be liable for any damages arising from the use of this information.
Exported / Printed on 21 Apr. 2020 by IBFD.- postponement of the deadline for filing (exclusively by mail) the individual income tax return until 15 April 2020.[17]
6. Bulgaria
6.1. Initial measures
On 13 March 2020,[18]Bulgaria declared a state of emergency as a result of the spread of COVID-19. On 15 March 2020, the
government proposed the following tax and economic measures:
- an extension of the deadline for submission of the annual corporate income tax returns until 30 June 2020 (currently, the
deadline is 31 March 2020;
- an extension of the deadline for payment of local taxes and fees at a discount;
- compensation by the state for companies that have been proven to be affected by the measures against the spread of
coronavirus of up to 60% of their salary expenses for one month;
- support for small and medium-sized enterprises provided by the Bulgarian Development Bank; and
- an increase in the salaries of doctors and other medical persons involved in the fight against COVID-19.
On 18 March 2020,[19]a bill proposing tax-related measures in response to the COVID-19 pandemic and state of emergency
in Bulgaria was proposed to the National Assembly. On 20 March 2020,[20]the Bulgarian parliament voted on these and other
measures at second (final) reading.
On 3 April 2020,[21]the parliament approved to extend the state of emergency from 13 April to 13 May 2020. This means that
all emergency tax measures envisaged during the period of state of emergency will continue to apply until 13 May 2020. The
decision was published in the State Gazette of 7 April 2020.
6.2. Additional measures
6.2.1. Advance CIT instalments regime
On 24 March 2020,[22]the National Revenue Agency published clarifications on the advance corporate income tax (CIT)
instalments regime for 2020, which is part of the COVID-19 emergency tax measures promulgated in the State Gazette and
published on 23 March 2020[23](the official publication date is 24 March 2020). An overview of the clarifications that concern
taxable persons who meet the criteria for payment of advance CIT instalments under the Corporate Income Tax Act (CITA) is
set out below.
- where the annual CIT return for 2019 is filed by 15 April 2020, the advance CIT instalments for 2020 shall be paid in the
amount declared; and
- where the annual CIT return for 2019 has not been filed by 15 April 2020, the advance CIT instalments must be declared by
that date with the annual CIT return of which only the part relating to the declaration of advance CIT instalments for 2020 has
to be completed. When, subsequently, by 30 June 2020, these persons file their CIT return for 2019, they will not complete
the part relating to the declaration of advance CIT instalments for 2020.
For filings after 15 April 2020, adjustments (reduction or increase) of the advance CIT instalments declared with the annual CIT
return for 2019 will be made with the declaration under article 88 of the CITA. The adjustments of the advance payments made
with the declaration under article 88 of the CITA will be used after the filing of the declaration.
6.2.2. Extension of deadline for filing annual activity reports
On 24 March 2020,[24]the National Statistical Institute published a notification that the deadlines for submission of annual statistical
reports will be extended as follows:
17. Bosnia and Herzegovina – COVID-19 pandemic: emergency tax measures – individual tax return deadline extended (19 Mar. 2020), News IBFD.
18. Bulgaria – Tax and financial measures related to COVID-19 to be proposed (16 Mar. 2020), News IBFD.
19. Bulgaria – COVID-19 pandemic: emergency tax measures (20 Mar. 2020), News IBFD.
20. Bulgaria – COVID-19 pandemic: emergency tax measures – adopted by parliament (23 Mar. 2020), News IBFD.
21. Bulgaria – COVID-19 pandemic: emergency tax measures – state of emergency extended (8 Apr. 2020), News IBFD.
22. Bulgaria – COVID-19 pandemic: emergency tax measures – clarifications on advance CIT instalments for 2020 (24 Mar. 2020), News IBFD.
23. Bulgaria – COVID-19 pandemic: emergency tax measures – gazetted (24 Mar. 2020), News IBFD.
24. Bulgaria – COVID-19 pandemic emergency tax measures – extension of deadline for filing annual activity reports (25 Mar. 2020), News IBFD.
J. Rogers-Glabush & T. Morales, Emergency Tax Measures in Response to the COVID-19 Pandemic, 60 Eur. Taxn. 7 (2020), Journal Articles & Papers 7
(accessed 20 April 2020).
© Copyright 2020 IBFD: No part of this information may be reproduced or distributed without permission of IBFD.
Disclaimer: IBFD will not be liable for any damages arising from the use of this information.
Exported / Printed on 21 Apr. 2020 by IBFD.- persons obliged to submit annual statistical reports for 2019 will have to file them not later than 30 June 2020 (the standard
deadline is 31 March);
- entities that have to submit annual consolidated statistical reports for 2019 will have to file them not later than 30 September
2020 (the standard deadline is 30 June); and
- persons that did not perform activity during 2019 will have to file a declaration not later than 30 June 2020 (the standard
deadline is 31 March).
The above news (in Bulgarian language) is available here on the website of the National Statistical Institute.
In respect of the above, an official order will be issued by the directors of the National Statistical Institute and the National Revenue
Agency. Further developments will be reported when they occur.
6.2.3. Request for VAT exemption on COVID-19 goods
On 25 March 2020,[25]the Council of Ministers decided to send a request to the European Commission for authorization to
apply an exemption from customs duties and value added tax (VAT) on imports of medical products related to the fight against
COVID-19.The request will be sent to the European Commission by the Minister of Finance.
6.2.4. Extension of deadlines for annual social security and health insurance contributions
On 31 March 2020,[26]the National Revenue Agency (NRA) published guidance stating that the deadline for payment of the
final annual mandatory social security and health insurance contributions for 2019 by self-insured persons who exercise their
employment as sole traders and farmers who have chosen to be taxed under article 26 of the Personal Income Tax Act, as well
as by sole traders who are subject to patent tax under the Local Taxes and Fees Act, has been extended from 30 April 2020 to
30 June 2020. For other self-insured persons, the deadline remains unchanged at 30 April 2020.
6.2.5. Extension of procedural deadlines
On 2 April 2020,[27]a group of parliament members introduced a bill on the amendment of the Measures and Actions during the
State of Emergency Act (MASE Act). The bill is available on the National Assembly’s website.
The bill proposes a number of amendments that will have the following impact on taxpayers’ rights and obligations:
- statutes of limitations of relevance to rights and obligations of affected persons are suspended, with certain limited exceptions;
- the suspension of administrative deadlines to comply with instructions or requests by administrative bodies will be revoked
following the adoption of the bill; and
- if a taxpayer cannot exercise a right or fulfil an obligation for valid reasons within a statutory or an administrative deadline, the
competent authorities may grant a new extended deadline following a motivated request from the taxpayer. Valid reasons would
include placing an individual under quarantine or hospitalization, or being abroad during the state of emergency. Currently,
the MASE Act provides for a one-month automatic extension of all statutory deadlines and the validity period of fixed-term
administrative acts.
6.2.6. Amendments to the Tax Insurance Procedure Code and the budget
On 6 April 2020,[28]the parliament adopted the following amendments to the Tax Insurance Procedure Code (TIPC) and the budget.
Amendments to the TIPC
During the emergency situation related to the COVID-19 pandemic, income from salaries, any other work compensation, pensions
or scholarships not exceeding BGN 610 (EUR 305) may not be seized. It will still be possible to seize income above BGN 610
for the collection of tax debts.
Changes to the budget to take into account the decrease in tax revenues
25. Bulgaria; European Union – COVID-19 pandemic: emergency tax measures – request for exemption from VAT and customs duties for imported medical
products (30 Mar. 2020), News IBFD.
26. Bulgaria – COVID-19 pandemic: emergency tax measures – extended deadline for annual social security and health insurance contributions (1 Apr. 2020),
News IBFD.
27. Bulgaria – COVID-19 pandemic: emergency tax measures bill on amendment of emergency legislation introduced to parliament (6 Apr. 2020), News IBFD.
28. Bulgaria – COVID-19 pandemic: emergency tax measures – amendments to TIPC and budget adopted (7 Apr. 2020), News IBFD.
J. Rogers-Glabush & T. Morales, Emergency Tax Measures in Response to the COVID-19 Pandemic, 60 Eur. Taxn. 7 (2020), Journal Articles & Papers 8
(accessed 20 April 2020).
© Copyright 2020 IBFD: No part of this information may be reproduced or distributed without permission of IBFD.
Disclaimer: IBFD will not be liable for any damages arising from the use of this information.
Exported / Printed on 21 Apr. 2020 by IBFD.The government expects a decrease in revenues from VAT, corporate income tax and excise duties of approximately BGN 2.44
billion. For that reason, the parliament voted on a law entitling the government to take out an external loan of up to BGN 10 billion.
The deficit is expected to reach 2.9% of gross domestic product. For the time being, no tax rate increases are envisaged.
University proposal
A team of lecturers from the VUZF lab research centre in Sofia has drafted a crisis action plan addressed to the government and
aimed at overcoming the economic and social consequences from the COVID-19 pandemic. The key recommendations concern:
- specific measures aimed at preserving the capital requirements of banks;
- schemes for rescheduling of amounts payable to the state without endangering the government budget;
- financial facilities for companies producing pharmaceuticals, medical clothing and medical supplies;
- the establishment of a special reserve in the form of a Rainy Day Fund suited to Bulgarian conditions;
- a package of administrative measures for proper management of financing from EU funds;
- measures to encourage employment in the crisis; and
- measures to stimulate the capital markets via the mechanisms for insurance companies.
6.3. Clarifications
On 24 March 2020,[29]the National Revenue Agency (NRA) published on its website a special section dedicated
to COVID-19 emergency tax measures promulgated in the State Gazette on the same day. The section includes information
on the extended filing and payment deadlines as well as a Q&A part with frequently asked questions. The following important
questions are explicitly clarified:
- the deadlines for submission of VAT returns and payment of VAT due will not be extended;
- similarly, the deadlines for payment of mandatory social security contributions will not be extended; and
- if a taxable person has already submitted its annual corporate income tax (CIT) return but has not paid yet the CIT due, the
payment may be postponed until 30 June 2020.
The COVID-19 tax section is available here (in Bulgarian) on the NRA’s website.
On 31 March 2020,[30]the executive director of the National Revenue Agency published Clarification no. 20-00-54 of 27 March
2020 on the application of the emergency tax measures in deviation from the normally applicable tax deadlines under the various
tax acts and the Tax and Social Security Procedure Code (TSSPC). The clarification is available on the website of the National
Revenue Agency.
The Act on the Measures and Actions during the State of Emergency (MASE Act) introduced various measures in the tax and
social security area, which partially revoked and preceded over the TSSPC and Social Security Code and the remaining tax
statutes, including:
- extension of certain statutory reporting and payment deadlines for liabilities under the Corporate Income Tax, Personal Income
Tax, and Local Taxes and Fees Acts;
- the rules for calculation of advance CIT instalments;
- suspension of certain statutes of limitation and deadlines for public enforcement procedures; and
- suspension of the absolute ten-year statute of limitations for public liabilities during the state of emergency.
However, the tax legislation continues to apply during the state of emergency and continues to regulate the following aspects
of tax law and procedure:
- establishment of liabilities for taxes and social securities (e.g. during tax audits);
- all reporting and payments deadlines, with the exception of the explicitly extended deadlines under the MASE Act;
29. Bulgaria – COVID-19 pandemic: emergency tax measures – clarifications published (26 Mar. 2020), News IBFD.
30. Bulgaria – COVID-19 pandemic: emergency tax measures – new clarification on applicable rules to tax deadlines and rules of procedure during state of
emergency (1 Apr. 2020), News IBFD.
J. Rogers-Glabush & T. Morales, Emergency Tax Measures in Response to the COVID-19 Pandemic, 60 Eur. Taxn. 7 (2020), Journal Articles & Papers 9
(accessed 20 April 2020).
© Copyright 2020 IBFD: No part of this information may be reproduced or distributed without permission of IBFD.
Disclaimer: IBFD will not be liable for any damages arising from the use of this information.
Exported / Printed on 21 Apr. 2020 by IBFD.- the placing of liens or other collateral in the course of public enforcement procedures; and
- the rules of procedure for the collection of public liabilities, with the exception of the explicitly extended deadlines under the
MASE Act.
7. Cyprus
On 15 March 2020,[31]the Cyprus government announced a number of measures to support enterprises affected by the COVID-19
outbreak in order to bolster the country's economy.
The package includes the following tax-related measures:
- a two-month extension of the submission deadline of income tax returns that were due by 31 March 2020 (for example, the new
submission deadline for the 2018 corporate income tax returns and the personal income tax returns of individuals preparing
audited financial statements is now 31 May 2020);
- a two-month deferral of the increase in contributions to the General Healthcare System by employers, employees and the
state, which was initially planned for March 2020;
- special arrangements to support taxpayers who have been included in the scheme regulating the Settlement of Overdue
Taxes; and
- special adjustments to VAT obligations consisting of:
- a temporary reduction of the VAT rates by which (i) the standard VAT rate decreases from 19% to 17% for a period of two
months and (ii) the reduced VAT rate decreases from 9% to 7% for a period of three and a half months;
- a two-month temporary suspension of the obligation of payment of the VAT liability without imposition of penalties as a
measure to enhance liquidity for businesses. This measure applies to (i) businesses with turnover not exceeding EUR 1
million based on the turnover of the VAT returns that were submitted during 2019, and (ii) businesses whose turnover has
been reduced by more than 25%; and
- arrangements for the VAT liability to be paid by way of instalments by 11 November 2020.
On 27 March 2020,[32]the parliament approved amendments to the VAT Law through the Law Regulating the Settlement of Overdue
Social Contributions and the Confirmation and Collection of Taxes Law (the Amending Laws). The Amending Laws were gazetted
on 27 March 2020.
The Amending Laws implement most of the measures announced by the government following the coronavirus outbreak on
15 March 2020. For the extension of the submission deadline of income tax returns that were due by 31 March 2020, the Tax
Department issued a circular on 30 March 2020 by virtue of which the deadline has been extended until 1 June 2020.
In addition, the Department of Registrar of Companies and Official Receiver issued an announcement by virtue of which the
payment of the annual levy of EUR 350 for the year 2020 has been extended until 31 December 2020 without imposition of
penalties.
7.1. VAT
In general terms, the VAT measures announced on 15 March 2020 have been withdrawn.
According to the Amending Laws, there will be a deferral of VAT payable amounts for the periods ending 29 February 2020, 31
March 2020 and 30 April 2020, until 10 November 2020, subject to the following conditions:
- the taxable person submits the relevant VAT return by the statutory due date; and
- the VAT payable amount for the above periods is settled by 10 November 2020.
Provided that these conditions are met, there will be no additional tax of 10% on VAT payable amounts, the annual interest of
1.75% thereof will not apply and any criminal sanctions against taxable persons for failure of VAT payments and submission of
tax returns will be suspended for the above-mentioned periods. However, the submission of VAT returns for such periods must
continue as follows.
31. Cyprus – COVID-19 pandemic: emergency tax measures (20 Mar. 2020), News IBFD.
32. Cyprus – COVID-19 pandemic: emergency tax measures – gazetted (6 Apr. 2020), News IBFD.
J. Rogers-Glabush & T. Morales, Emergency Tax Measures in Response to the COVID-19 Pandemic, 60 Eur. Taxn. 7 (2020), Journal Articles & Papers 10
(accessed 20 April 2020).
© Copyright 2020 IBFD: No part of this information may be reproduced or distributed without permission of IBFD.
Disclaimer: IBFD will not be liable for any damages arising from the use of this information.
Exported / Printed on 21 Apr. 2020 by IBFD.The deferral will not apply to businesses with economic activities that belong to the following codes of economic activity in
accordance with their registration certificate:
Code for economic activity Description
35111 Producers of electricity power
36001 Collection and distribution of water (for the supply of water)
47111 Grocery and supermarkets mainly for food
47112 Kiosks and minimarkets
47191 Retail trade in a variety of goods in department stores where food, beverages and tobacco do not prevail
47211 Retail trade in fruits and vegetables
47221 Retail trade in meat and meat products, including poultry
47231 Retail trade in fish and seafood
47241 Retail trade in bread and other bakery goods
47242 Retail trade in confectionery
47301 Retail trade in fuel
47411 Retail trade in computers, peripheral equipment and video games
47611 Retail trade in books
47621 Retail trade in newspapers and stationery
47651 Retail trade in toys of any kind other than video games
47731 Pharmacies
61101 Cyprus Telecommunications Authority (CYTA)
61201 Internet services
61301 Satellite telecommunications services
61901 Telecommunications services other than those provided by CYTA
7.2. General Healthcare System (GHS) and social security contributions
The deferral of the increase in contributions to the General Healthcare System (GHS) by employers, employees and the State
was clarified so that the contribution rates to the GHS that were applicable until 28 February 2020, will also apply for the months
of April, May and June 2020. The increased contribution rates to the GHS applied solely to March 2020 and will be introduced
from 1 July 2020 onwards.
Payment of overdue social contributions (including social insurance contributions) in instalments for the months of March and
April 2020, is suspended for taxpayers who were included in a scheme for their settlement, and the repayment period is extended
by two months.
8. Croatia
8.1. Initial measures
On 17 March 2020,[33]the government adopted measures to prop up the economy during the COVID-19 pandemic. The key
measures are as follows:
- deferment of payments of income and profit tax and contributions on wages for a period of three months and possibly an extra
grace period of three months if necessary. Additionally, these payments can be made in instalments of up to 24 months;
- a three-month suspension of liabilities to the Croatian Bank for Reconstruction and Development (HBOR) and commercial
banks, as well as the approval of loans of cash in order to pay wages, suppliers and other liabilities;
- interest-free loans for municipalities, cities and counties, the Croatian Health Insurance Fund (HZZO) and the Croatian Pension
Insurance Fund (HZMO), equal to the amount of income taxes, surtax and contributions that have been deferred and/or for
which instalment payments have been approved;
33. Croatia – COVID-19 pandemic: emergency tax measures (24 Mar. 2020), News IBFD.
J. Rogers-Glabush & T. Morales, Emergency Tax Measures in Response to the COVID-19 Pandemic, 60 Eur. Taxn. 7 (2020), Journal Articles & Papers 11
(accessed 20 April 2020).
© Copyright 2020 IBFD: No part of this information may be reproduced or distributed without permission of IBFD.
Disclaimer: IBFD will not be liable for any damages arising from the use of this information.
Exported / Printed on 21 Apr. 2020 by IBFD.- the approval of new loans for liquidity of enterprises to finance wages, utility costs and other basic business operating costs
(with the exception of interest to commercial banks and other financial institutions) in cooperation with commercial banks;
- deferred payment of taxes and fees for companies and small businesses in the tourist industry; and
- deferment of payments for permits for extraordinary transport and the extension of the so-called winter discounts on motorway
tolls to 1 June 2020.
8.2. Additional deferral measures
On 24 March 2020,[34]following the amendments to the General Tax Law, special tax measures involving a deferment of tax
entered into force. Accordingly, a deferral of tax payment may be requested by taxpayers that are unable to pay their tax liabilities
due to the COVID-19 crisis and with outstanding tax debt up to HRK 200 at the time of applying for a deferral.
However, according to the amendments, a deferral of VAT will be offered only to entrepreneurs with revenues up to HRK 7.5
million (excluding VAT) in the previous year and that apply the VAT accounting method.
In general, a tax deferral may be requested for all taxes and contributions, except for customs, excise duties and VAT for
entrepreneurs with revenue above HRK 7.5 million in the previous year. The application for deferral must include a proof of inability
to pay tax, such as a proof of income decrease being at least 20% less compared to the same month of the previous year, or
an indication that the taxpayer’s income will decrease by at least 20% in the three months following the application compared
to the same period of the previous year.
Following the approval by the tax authorities, taxpayers will be granted a deferral for a period of three months with a possibility
for extension. The requests must be submitted to the tax authorities through the e-Tax portal.
9. Czech Republic
9.1. Initial measures
On 12 March 2020,[35]the Ministry of Finance announced its plans to mitigate the effects of COVID-19 for taxpayers, as follows:
- The general deadline for filing the 2019 individual income tax return is 1 April 2020, however, no penalty and late payment
interest will apply as long as the tax return is filed by 1 July 2020. This measure will effectively permit taxpayers to defer,
without sanction, the individual income tax filing and payment deadlines by three months. Taxpayers will not be required to
demonstrate that the delay was caused by COVID-19.
- In respect of other late tax filings, including the late filing of the control statements, taxpayers will not be subject to penalties,
provided that they can demonstrate that the delay was caused by COVID-19 (for example, illness or quarantine in connection
with COVID-19).
- All taxpayers will be exempt from the second penalty of CZK 1,000 for a late filing of the control statement, without the need
to demonstrate a connection with COVID-19.
- Taxpayers will benefit from a 75% reduction of the administrative fee for the deferral of tax payments or the payment of tax
in instalments (i.e. the fee will be reduced from CZK 400 to CZK 100).
- Although the final stages of the electronic reporting of revenues (ERR) will still be introduced from 1 May 2020, the tax
authorities will be more lenient in cases of non-compliance where such non-compliance was demonstrably caused by
COVID-19.
On 16 March 2020,[36]the measures to mitigate the effects of COVID-19 were published in the Financial Newsletter issued by the
Ministry of Finance. Accordingly, the measures apply as of 16 March 2020.
9.2. Additional measures
On 24 March 2020,[37]additional measures to mitigate the effects of COVID-19 were published in the Financial Newsletter of the
Ministry of Finance and apply from 24 March 2020.The additional measures include:
- a waiver of the personal and income tax advance payments due in June 2020; and
34. Croatia – COVID-19 pandemic: emergency tax measures – tax deferral implemented (27 Mar. 2020), News IBFD.
35. Czech Republic – Ministry of Finance to propose tax measures to mitigate effects of COVID-19 (16 Mar. 2020), News IBFD.
36. Czech Republic – COVID-19 pandemic: emergency tax measures − published (17 Mar. 2020), News IBFD.
37. Czech Republic – COVID-19 pandemic: additional emergency tax measures – announced (25 Mar. 2020), News IBFD.
J. Rogers-Glabush & T. Morales, Emergency Tax Measures in Response to the COVID-19 Pandemic, 60 Eur. Taxn. 7 (2020), Journal Articles & Papers 12
(accessed 20 April 2020).
© Copyright 2020 IBFD: No part of this information may be reproduced or distributed without permission of IBFD.
Disclaimer: IBFD will not be liable for any damages arising from the use of this information.
Exported / Printed on 21 Apr. 2020 by IBFD.- no penalty and late-payment interest will apply for the late filing of real estate acquisition tax returns, as long as the returns
are filed by 31 August 2020. This measure will effectively permit taxpayers to defer without sanctions the filing and payment
deadlines for real estate acquisition tax returns due from 31 March to 31 July 2020. Taxpayers will not be required to
demonstrate that the delay was caused by COVID-19.
In addition, the Ministry of Finance announced that, for corporate and individual income tax purposes, a loss carry-back for the
2020 tax year will be introduced. This measure will allow taxpayers to carry back their 2020 tax losses to the 2018 and 2019
tax years.
Finally, the Ministry of Finance will suspend the application of the Electronic Reporting of Revenues for the duration of the state
of emergency and the following three months.
On 31 March 2020,[38]the Ministry of Finance announced in its Financial Newsletter that late payment interest in respect of road
tax advance payments due on 15 April and 15 July 2020 will be waived, as long as the payments are made by 15 September 2020.
This measure effectively permits taxpayers to defer without sanctions the deadlines for road tax advance payments. Taxpayers
will not be required to demonstrate that the delay was caused by COVID-19.
10. Denmark
10.1. Introductory remarks
On 10 March 2020,[39]the Ministry of Taxation announced three measures to mitigate the financial impact of the coronavirus. The
measures are expected to increase the liquidity of Danish enterprises by DKK 125 billion. The measures, which still need to be
approved by parliament, are summarized below.
10.2. Postponing payment deadlines for remitting PAYE taxes
Currently, employers must withhold tax on salaries, certain fringe benefits and directors’ fees ( A-skat ), as well as social security
contributions paid by employees ( AM-bidrag ) and remit them to the tax authorities either by the end of the month or by the tenth
day of the following month, depending on the size of the employer. For payments due in April, May and June 2020, the deadline
for remitting the tax is being postponed by four months.
10.3. Adjusting corporate income tax due
The next instalment payment of corporate income tax is due on 20 March 2020. This prepayment is based on expected profits
earned in 2020. If a business is impacted by the spread of COVID-19, it is possible to reduce expected profits for 2020 and
consequently reduce the preliminary payment of tax.
10.4. Postponing remittance of VAT
Currently, if taxable supplies exceed DKK 50 million, the taxable period is the calendar month. The deadline for remittance of VAT
for the March, April and May 2020 periods is being postponed by 30 days.
10.5. Personal savings
On 17 March 2020,[40]the parliament adopted the law proposal (L. 134) regarding tax measures. In addition to the measures
reported on 16 March 2020, the maximum amount that companies may deposit into their personal tax account is increased to
DKK 10 million (currently, DKK 200,000). The increased limit will be valid until 30 November 2020.
10.6. Compensation scheme for fixed business expenses and compensation for self-
employed
On 19 March 2020,[41]the government announced that it would expand the COVID-19 pandemic emergency tax measures by
introducing a compensation scheme for fixed business expenses and compensation for self-employed persons suffering from a
revenue loss due to the coronavirus. On 26 March 2020,[42]the parliament unanimously adopted this package of additional aid
for businesses.
38. Czech Republic – COVID-19 pandemic: additional emergency tax measures – published (1 Apr. 2020), News IBFD.
39. Denmark – Ministry of Taxation introduces measures to mitigate financial Impact of coronavirus – law proposal presented (16 Mar. 2020), News IBFD.
40. Denmark – COVID-19 pandemic emergency tax measures adopted (19 Mar. 2020), News IBFD.
41. Denmark – COVID-19 pandemic emergency tax measures: more measures introduced (23 Mar. 2020), News IBFD.
42. Denmark – COVID-19 pandemic emergency tax measures: more measures adopted (27 Mar. 2020), News IBFD.
J. Rogers-Glabush & T. Morales, Emergency Tax Measures in Response to the COVID-19 Pandemic, 60 Eur. Taxn. 7 (2020), Journal Articles & Papers 13
(accessed 20 April 2020).
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Disclaimer: IBFD will not be liable for any damages arising from the use of this information.
Exported / Printed on 21 Apr. 2020 by IBFD.10.6.1. Compensation for fixed expenses
The measure offers compensation for fixed expenses, such as rent, interest expenses on debt and non-cancellable contractual
expenses (e.g. leasing contracts). Salary expenses are compensated through a separate wage compensation scheme.
Companies that are temporarily prohibited from doing business will be able to compensate all of their fixed costs. All other
businesses can get compensation based on the decline of turnover. Accordingly, if the decline is:
- 80%-100%, 80% of the fixed expenses are compensated;
- 60%-80%, 50% of the fixed expenses are compensated; and
- 40%-60%, 25% of the fixed expenses are compensated.
No compensation is granted if the decline is 40% or less or if the fixed expenses are less than DKK 25,000. The maximum
compensation is DKK 60 million per business.
In order to qualify for the compensation, businesses must make an application to the Danish Business Authority
( Ehrvervsstyrelsen ). The applications must include a calculation of the expected decline in turnover and an audited statement
on the fixed expenses. Eighty per cent of the costs of the audited statement will also be compensated.
10.6.2. Compensation for self-employed
Compensation is being granted for the self-employed for the expected revenue decline due to the COVID-19 crisis. In order to
qualify for the compensation, revenue must be expected to decline by at least 30%. The business in question may not have more
than 10 full-time employees and must have had an average turnover of at least DKK 15,000 per month in the preceding period.
Furthermore, the self-employed person who owns the business must have a minimum stake of 25% in it and must work in the
business. The business owner's personal income for the financial year 2020 must not exceed DKK 800,000.
Compensation will amount to 75% of expected revenue loss, compared to the average revenue in recent fiscal years. However,
the compensation may not exceed DKK 23,000 per month. The business owner can benefit from the scheme for a maximum
of three months.
The compensation must be paid back if the actual revenue loss in 2020 turns out to be less than 30% or if the business owner's
personal income exceeds DKK 800,000 in 2020.
10.7. Temporary salary compensation
On 24 March 2020,[43]the parliament agreed to provide temporary salary compensation. Accordingly, an employee who receives
temporary salary compensation is entitled to his full salary for a maximum period of three months, minus a total of 5 days without
pay as compensation for leave, vacation, etc.
10.8. Extension of filing deadlines
On 31 March 2020,[44]the Ministry of Taxation announced that the deadlines for filing tax returns will be extended until 1 September
2020 for:
- employees receiving a tax return (regular deadline being 1 May 2020);
- small enterprises, private entrepreneurs and individuals receiving income from abroad (regular deadline being 1 July 2020);
and
- companies and other legal entities (regular deadline being 31 March 2020 or later).
The extended deadlines also apply to documentation that must normally be provided on an ongoing basis, such as transfer pricing
documentation or requests for payment under the R&D tax credit scheme.
The extension of the deadlines applies automatically.
43. Denmark – COVID-19 pandemic emergency tax measures: more measures adopted (27 Mar. 2020), News IBFD.
44. Denmark – COVID-19 pandemic emergency tax measures: filing deadlines extended (2 Apr. 2020), News IBFD.
J. Rogers-Glabush & T. Morales, Emergency Tax Measures in Response to the COVID-19 Pandemic, 60 Eur. Taxn. 7 (2020), Journal Articles & Papers 14
(accessed 20 April 2020).
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Disclaimer: IBFD will not be liable for any damages arising from the use of this information.
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