VATLive > Blog > Worldwide > World turns to VAT cuts on COVID-19 coronavirus threat

World turns to VAT cuts on coronavirus COVID-19 threat

  • Jun 4, 2020 | Richard Asquith

Countries around the world are turning to emergency tax breaks to support their stuttering economies under the coronavirus (COVID-19) threat. VAT global measures already announced are below, and Avalara is configuring these into its VAT/GST reporting and calculation offerings to ensure users receive filing and payment benefits. For free updates of this list, sign up to receive Avalara's free VAT newsletter.

Latest updates

 
  • Germany cuts VAT from 19% to 16% until Dec 2020
  • Denmark 3 Jun, new delays on VAT payments. VAT loans for small businesses
  • Italy 3 Jun, Sugar Tax delayed. Prepopulated VAT returns delayed
  • United States 2 June, from Avalara in the U.S., the latest on states' sales tax measures.
  • Malaysia 2 Jun, sales and services tax returns and payments delayed unitl 30 June
  • Belgium 31 May, catering services VAT cut from 12% to 6%. April till year end. VAT payment deadlines delayed by 2 months.
  • Italy 28 May, Prepopulated VAT returns delayed. Dropped VAT rise plans. Non-resident businesses can benefit from delays of VAT returns

Updates by region:

Europe

  • Germany 4 Jun, cuts VAT from 19% to 16%
  • Denmark 3 Jun, new delays on VAT payments. VAT loans for small businesses
  • Italy 3 Jun, Sugar Tax delayed. Prepopulated VAT returns delayed
  • Cyprus 28 May, accomodation and hospitality VAT rate cut from 9% to 5% from July until 10 Januuary 2021
  • Poland 27 May, VAT electronic cash registers delays. Poland is offering a VAT payment delay . Delayed the extension of SAF-T VAT reporting.
  • Netherlands 27 May, Cut in late interest charge. VAT easements extended until 30 September 2020.
  • Malta 27 May update, postponed VAT payments to end June must be paid by 31 Oct
  • Czech Republic 26 May - Accomodation and events VAT cut to 10% Late VAT return filings and payments on application
  • Greece 25 May, payments due in May delayed to 30 Sept for qualifying businesses
  • Spain 25 May update, filing deadline suspensions withdrawn 1 June
  • Macedonia 25 May, delays VAT returns
  • Portugal 23 May, VAT cut on health clubs and gyms. Mar-May returns delayed again
  • Poland 19 May, potential delay to SAF-T to 2021
  • Slovenia 18 May, ending COVID-19 VAT measures 31 May
  • Austria 15 May, cash-VAT threshold doubled. Cuts non-alcholic beverages VAT to 10%. Austria has already implemented a VAT payment and penalty deferments.
  • Luxembourg 15 May, VAT penalties for late returns are reimposed. Businesses may apply for VAT payment deferment.
  • Norway 13 May update, Jan-Feb VAT return delayed to June. Reduced VAT rate cut further from 1 April. Deferred VAT payments.
  • Ireland 12 May, update - interest waiver on June and July VAT payments
  • EU proposes delaying e-commerce VAT package to 1 July 2021
  • Bulgaria 8 May update, cut to catering VAT rate. No relief on VAT filings deadlines.
  • Finland 8 May, reduced late payment interest. Businesses to be offered VAT loans with 3% interest charge. 3-month delays on VAT payments.
  • France 1 May update, foreign VAT relaims extension. Delays exporter of record changes. Discounts on VAT payments for April and May. PDF and scanned invoices valid for VAT instead of paper.
  • Hungary 1 May update, new banking tax. Speed VAT credit refunds. Emergency retail tax. VAT payment delays on application.
  • UK 30 April, update clarifications on defered VAT and cuts VAT on e-books and newspapers. HMRC has defered all VAT payments until June 2020. Returns must still be filed.
  • Ukraine 30 April, VAT rate cuts. Ukraine will not charge late interest on VAT payments until after May 2020.
  • Russia 28 April, limited delays on Q1 VAT returns.
  • Turkey 24 April update, second VAT payments and filings postponement.
  • Iceland 23 April - New payment deadline 6 May. Suspension of Accomodation Tax.
  • Croatia 16 April update, deferal available on application for March and April VAT returns.
  • Lithuania 15 April update, Considering VAT rate cut on hospitality services. Has confirmed VAT payment delays or write-offs of up to one year. 
  • Sweden 9 April, update cash VAT scheme and extended reporting periods for small businesses. Previously, new dates for late penalty and interest fine easements on VAT payments for up to one year.
  • Moldova 1 April, update - VAT rate cut on hospitality services will be from 20% to 15% (not 10%)
  • UK Jersey 31 March, postpones GST payments March to May.
  • Russia 29 March, tax payment deferrals for all small businesses, but not extended to VAT.
  • Slovakia 27 March, clarifying already announced different payment and returns delays.
  • Iceland 24 March, offers delayed VAT payments until 2021. Hotel tax withdrawn until end of 2021.
  • Latvia 24 March offers tax payment delays and speedy VAT credit refunds.
  • Estonia 23 March, is to provide a VAT payment holiday until 1 May. But further easements are promised.
  • Switzerland 23 March, offers VAT and customs payment holiday until the end of 2020.
  • EU VAT reclaims delays to deadlines across Europe.
  • Moldova VAT rate cut for COVID crisis.
  • Denmark delays on VAT for small and large businesses.
  • Jersey is to allow late Goods and Sales Tax payments.
  • Romania introduces accelerated VAT credits.
  • EU Commission has suggested countries provide VAT payment holidays, and act in unison. It has also relaxed the state-aid rules, which would permit VAT measures benefiting only specific businesses or sectors.
  • Georgia is doubling funding for company VAT credit refunds.

North and Central America

  • United States 3 June, from Avalara in the U.S., the latest on states' sales tax measures.
  • Canada 20 May update, federal govt provides for GST/HST payment delays till June. Saskatchewan has given automatic payment delays until 31 July. Previously: Federal GST delays; Quebec delays sales tax return until 30 June; Ontario allows some filing reliefs, but none for HST. Manitoba joins British Columbia in offering delays on provincial sales taxes. The federal government has already suspended audits.
  • Mexico 1 May speed VAT credits. 
  • Panama 20 April, delays VAT filings by 120 days.
  • Guatemala 29 March, allows late VAT returns.
  • Costa Rica has provided a three-month VAT payment deferment for taxpayers from 15 March.
  • Jamaica plans to cut its General Consumption Tax from 16.5% to 15%.

Middle East

  • Israel 19 May, postponed VAT returns and payments
  • Saudi Arabia hikes VAT to 15%
  • Lebanon 2 May, Q1 Value Added Tax return postponement
  • Palestine 3 May, VAT credit refunds and suspension of penalties.
  • UAE 22 April, offers delayed March VAT returns and payments till 28 May
  • Iran 9 April, delays VAT returns during COVID-19 crisis.
  • Saudi Arabia 21 March, delays VAT payments by three months.

Africa

  • Egypt 15 May, 3-month VAT payment holiday for tourism sector
  • South Africa 7 May, relief for small VAT payers. Limited VAT reliefs.
  • Botswana 4 May, delayed VAT returns.
  • Senegal 23 April, speedy VAT credits.
  • Kenya 18 April update, VAT cut to 14% confirmed and backdated to 1 April 2020.
  • Botswana 12 April accelerated VAT credit repayments.
  • Uganda 29 March, postpones VAT compliance requirements.
  • Tunisia 30 March, VAT credit accelerations.
  • Nigeria 27 March, is delaying the VAT returns deadline.

Asia

  • Malaysia 3 Jun, sales and services tax returns and payments delayed unitl 30 June
  • China 23 May, VAT easements extended to 31 Dec 2020
  • Taiwan 19 May, speedy VAT credits available
  • Pakistan 18 May, second delays of Sales Tax returns
  • Thailand 15 May, delays VAT returns
  • India 11 May,  Delays annual GST return further. Considering switch to cash-based GST.
  • Philippines 6 May, VAT refund delays. Further returns deadlines extension in May.
  • Indonesia 24 April, has increased VAT credit limit. It will also grant postponements of payments of import VAT for businesses.
  • South Korea 17 April, exempts small tax payers from VAT payments until 31 Dec 2020. It had already cut VAT taxes for small businesses, given tax boosts for consumers replacing their cars early, and provided tax deductions on personal credit card spend.
  • Japan 16 April, businesses may apply for Consumption Tax exempt status. One-year Consumption Tax payment delays on application.
  • Vietnam 13 April, e-invoicing has been postponed. Agreed 5-month VAT payment for businesses and housholds. Vietnam is proposing cutting VAT for restaurants, hotels, and transport and tourism companies.
  • Kyrgyzstan 13 April delays in VAT cash registers and e-invoicing.
  • Philippines 11 April, 15 day delay on Q1 returns due now 30 April.
  • Singapore 7 April. GST returns and payments delayed one month.
  • Sri Lanka 31 March, pushes back February and March VAT payments.

Oceania

  • New Zealand 1 May, right to request GST filing, reporting period changes or payment delays. Limited help for businesses on Goods and Services Tax.
  • Australia 17 April, import GST relief.
  • Australia is offering speedy credits on Goods and Services liabilities.

South America

  • Colombia 28 May, VAT exemptions on hard-hit sectors. 3-day VAT suspension.
  • Uruguay 27 May, VAT payment delays
  • Argentina 23 May, April VAT returns and payment delay
  • Paraguay 23 May, delays VAT on e-services
  • Bolivia 22 May, e-invoices impementation delayed. Extends VAT returns and payments to July
  • Peru 19 May, up to 6 months' delay on VAT payments
  • Chile 12 May, import VAT deferrment. Chile has already provided VAT payment break till end of June for small enterprises.
  • Brazil 7 April, update 4 month delay to PIS/COFINS payments. It had already suspended tax audits and eases import rules.
  • Ecuador 6 April, postponements on returns.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He can be contacted at: richard.asquith@avalara.com He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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