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France Plans Tax Breaks to Fight Economic Impact of Coronavirus

Posted on Mar. 10, 2020

France will reduce direct taxes on businesses on a case-by-case basis to mitigate the effects of the coronavirus outbreak on the French economy, Finance Minister Bruno Le Maire has announced.

Le Maire tweeted March 9 that the French government intends to strengthen its support system for businesses affected by the epidemic by implementing tax relief measures. France’s plan follows announcements of similar plans by many countries.

Following in the footsteps of China, Italy has taken steps to mitigate the economic impact of the coronavirus with a March 1 announcement of plans to introduce tax cuts and tax credits. Previously, the government  suspended tax payments due between February 21 and March 31 for individuals and businesses in 11 municipalities affected by the virus, according to a February 24 release.

According to a March 1 Italian government release, the stimulus package includes tax cuts and a tax credit for companies that have suffered a revenue drop of more than 25 percent. In a March 6 letter to the European Commission, Economy Minister Roberto Gualtieri said the government is planning to send the Parliament a support package worth €6.3 billion in terms of its impact on the general government deficit. 

Germany announced March 8 a plan to provide liquidity assistance for businesses — a conversation that the government will have with German organizations shortly — and to expand its short-time work program. The bill will be adopted March 11 and enter into force in April, according to the announcement.

The German government included in its plans proposals to increase annual federal investments by €3.1 billion from 2021 to 2024, which will total €12.4 billion. Germany said the effects of the coronavirus on German businesses are unforeseeable, but that the government would like to respond quickly should the circumstances worsen.

China’s State Taxation Administration said in a March 3 release that it will extend its monthly tax filing deadline from March 16 to March 23. China has already provided small and medium-size businesses with tax and fee incentives. According to a March 3 release from the Chinese government, the country's top economic planner said there will be “more targeted tax and fee cuts to aid smaller businesses as they were among the hardest hit by the novel coronavirus outbreak.”

Hong Kong has proposed one-time waivers of personal and corporate income taxes to deal with a recession brought on by international trade tensions and the coronavirus epidemic. 

In the United States and New Zealand, tax policy changes are still in the works. At a U.S. Senate Finance Committee meeting March 9, Chair Chuck Grassley, R-Iowa, said the committee is exploring the possibility of tax relief measures within its jurisdiction.

New Zealand is also exploring tax policy options. At a March 9 press conference, Finance Minister Grant Robertson said Treasury and the Inland Revenue Department are developing options to reduce the impact of the coronavirus on affected businesses and “maintain operational continuity.” He highlighted the government’s plans to provide flexibility to small businesses to meet their tax requirements.

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