Last update on 04/11/2020

In this current crisis due to the coronavirus epidemic (Covid-19), EU countries have taken steps to support EU businesses with regards to their VAT obligations.

The EU has pushed Member States to take measures with regards to reduced liabilities for VAT, to help the businesses in the face of the current economic crisis.

In this article we provide you with some country specifics in relation with these initiated measures.

This overview is for information purposes only and might be subject to changes.

DELAYED VAT RETURNS & PAYMENTS

Austria: Companies can chose of either postponing VAT payment until 30 September, 2020 or paying it in installments. The new deadline for the VAT filing is 31 August, 2020, without imposing any late payment interest if the returns are not submitted on time.

Belgium: VAT payment is automatically postponed to 20 May, 2020 for the monthly VAT returns due for March and for the quarterly VAT return due for the 1st quarter of 2020 the deadline is delayed to May 7, 2020. An automatic deferral of payment of 2 months for VAT without having to pay fines or interest applies. April VAT payment deadlines delayed by 2 months.

The VAT for Catering services reduced to 6%.

Financial and Budgetary committee of parliament has adopted various COVID-19 related supportive tax measures.

Cyprus: 28 Oct, VAT payment delays; cut tourism VAT rate to 5%

Czech Republic: 27 Oct, VAT deferrals for retail sector

Denmark: VAT returns are postponed for 1, 3 or 6 months depending on whether the returns are filed monthly, quarterly or semi-annually.

Finland: The government has published an extensive report on how to navigate Finland out of the economic crisis caused by the COVID-19 pandemic by increasing some of the reduced VAT rates, widening the tax base for corporate income tax & some other measures

France: No deadlines extensions, VAT declarations and payments must be made within the usual deadlines. However, there are other measures with regards to the VAT returns and payments if certain conditions are met (a significant drop in turnover due to the Covid-19, the impossibility of gathering necessary elements for drawing up returns etc.), do not hesitate to contact us for more information.

France & Switzerland: France and Switzerland signed an agreement on the taxation of frontier workers who are currently e-working at home due to the COVID-19 pandemic.

Germany: Companies that are directly affected by Covid-19 can request a delay of the VAT payment until 31 December, 2020, without any late payment penalties. Beyond 31 December, 2020, requests for an extension must be justified. This also applies to non-resident companies in Germany. Extending Reduced VAT Rate to Restaurant and Catering Services (from 19% to 7%) from 1 July 2020 until 1 July 2021

Iceland 23 Oct, penalties relaxation on late Sep to Nov VAT payments

Ireland: No late payment interest or penalties will be imposed for January – February VAT payments. However, VAT returns must always be filed on time.

COVID-19 related VAT and Payroll tax debts, due from 1 March 2020 to the date when sectoral restrictions are lifted, will be parked for a period of 12 months with no interest on such tax debts. The timeframe for the “warehoused” debt to be paid back will be flexible. After the period of 12 months, the COVID-19 related tax debts will carry a reduced interest rate of 3% (down from 10%), until the debt is paid. If a company wants to benefit from the warehousing arrangement, it needs to have filed all the VAT returns in accordance with the Revenue guidance that has applied since the start of the current pandemic.

The interest on late payments for the January/February & March/April VAT is suspended for the small and medium enterprises (SME)

For the Businesses, other than SMEs, who are experiencing temporary cash flow or trading difficulties are directed to contact the Collector-General’s, they can also apply for a Phased Payment Arrangement.

Italy: A deferrement for the annual VAT return for 2019 delayed until 30 June 2020 for non-residents. The payments of VAT due in April 2020 and May 2020 have been suspended for qualifying enterprises until June 30, 2020. The Italian customs authorities inform that there is no VAT due on the import of goods used in the emergency of Covid-19.

On 13 May 2020, the Council of Ministers approved a new Law Decree providing urgent measures to relaunch the economy and mitigate the effects of COVID-19 for taxpayers, including suspension of the payments of value added tax, social security contributions and employers’ withholding taxes due in March, April and May 2020 until 16 September 2020 (subject to certain conditions)

Luxembourg: A deferral of VAT payment is given to all VAT payers who are affected by the Covid-19 crisis. The Administration for Registration Domains and VAT has announced on its website, asking taxable persons and investment funds to file their VAT and subscription tax (tax abonnement) returns in a timely manner. Forced tax collection measures will, however, not be taken.

Netherlands: The companies that are having difficulties due to the Covid-19 crisis, can request a VAT payment deferement for 3 months. Default interest for late payment will be reduced from 4% to 0.01% if the delay doesn’t concern the crisis. For a better cash flow, companies with regular VAT credits on their quarterly VAT returns can switch to monthly reporting.

Norway: 20 Oct, Reduced VAT rate 6% extended again on passenger transport, cultural, hotels, sports activities.

Poland: No deferment of VAT payments or returns submission, companies that are having financial difficulties following the pandemic can request payment delays or payment installments, without penalties.

Romania: 27 Oct, consultation on 12-month installment plan VAT payments

Slovakia: 20 Oct, VAT payments deferred until 1 Feb 2021

Spain: Postponement of the deadline for filing VAT returns due from 18 March 2020 are automatically extended until 20 May 2020. VAT payments with a deadline between 13 March 2020 and 30 May 2020 may be deffered for 6months (This measure applies only to companies whose turnover in 2019 was less than 6mln. euros). Tax Initiatives to support Cultural sector – regarding corporate income tax and personal income tax

Sweden: A VAT payment deferment can be applied for a period from 3 months up to a year. No modification of the deadline for VAT returns which must be filed on time.

UK: No delay for the submission of VAT returns, it must be lodged within the usual deadlines, on the other hand, the VAT payments due from March to June will be deferred until 31 March, 2021 without imposing any penalty or interest for late payment. This deferral is automatic and also applies to non-residents.

Temporary VAT zero rating for personal protective equipment is introduced from 1 May to 31 July 2020.

13TH DIRECTIVE VAT MEASURES

Some of the EU Member States have extended the deadline for VAT refund claims under the “13th Directive” (for the companies established outside the EU). Please find an overview of these deadlines in the table below:

Austria 30/06/2020
Belgium 30/09/2020
Denmark Postponed to 30/09/2020
France Postponed to 30/09/2020
Germany 30/06/2020
Ireland 30/06/2020
Italy 30/09/2020
Luxembourg 30/06/2020
Netherlands 30/06/2020
Poland 30/09/2020
Portugal 30/09/2020
Sweden 30/06/2020
Spain 30/09/2020
UK 30/06/2020
COVID-19 : VAT related initiatives to help the EU Businesses