As the coronavirus extends its potentially deadly reach throughout the world, several countries have announced tax and other measures to mitigate the economic impact from the COVID-19 disease.
China, where the coronavirus was first reported, announced tax-related measures February 11 to help businesses deal with the rapidly spreading epidemic. The government of Hong Kong on February 26 proposed one-time waivers of personal and corporate income taxes.
On March 12 the Australian government said it will introduce legislation to increase the instant asset write-off threshold from AUD 30,000 (around $19,500) to AUD 150,000, and to expand the scope of the incentive to include businesses with aggregated annual turnover of less than AUD 500 million — up from AUD 50 million. If approved, the measure would remain in effect from March 12 to June 30 and would apply to new and secondhand assets that are used or installed and ready for use during that period.
The Australian government said it will also propose a 50 percent deduction on the cost of eligible assets, with existing depreciation rules applying to the balance of an asset’s cost. The proposal, if approved, would remain in effect for 15 months.
Businesses with aggregated annual turnover under AUD 50 million will be allowed a tax-free credit or refund equal to 50 percent of withholding tax on their employees’ salary and wages, up to a maximum of AUD 25,000. “Eligible businesses that pay salary and wages will receive a minimum payment of AUD 2,000, even if they are not required to withhold tax,” the Australian Taxation Office said. It didn’t say whether the incentive requires parliamentary approval.
The Swedish government has proposed that companies be given the option of deferring payments of employers’ social security contributions and employees’ preliminary tax for up to one year. The deferment would likely apply "for no more than two months,” the government said in a March 11 release.
Indonesia said March 11 that it will exempt manufacturing companies from paying income tax, accelerate their VAT refunds, and delay the due dates for paying import taxes.
The Netherlands Times reported March 12 that the Dutch Tax and Customs Administration will allow companies to defer payments of corporate and other taxes if they can demonstrate that they have run into problems because of the coronavirus.
The Il Messaggero newspaper reported March 12 that the government of Italy, which has borne the brunt of the coronavirus in Europe, is considering allowing businesses to postpone payments of taxes, social contributions, and VAT.
On March 9 French Finance Minister Bruno Le Maire said his government will reduce direct taxes on businesses on a case-by-case basis to mitigate the economic effects of the coronavirus outbreak.
On March 11 U.S. Treasury Secretary Steven Mnuchin said his department is considering extending the tax return filing deadline for at least some taxpayers. The Trump administration has also called for a payroll tax holiday to help boost the economy in the wake of the coronavirus, but there appears to be strong congressional resistance to the proposal.
Multinational organizations have also been announcing moves in response to the public health emergency, which the World Health Organization said March 11 has turned into a pandemic. On March 12 the U.S. Treasury Department said it will host the upcoming meeting of G-7 finance ministers and central bank governors by teleconference. The meeting had been scheduled to take place in Philadelphia in April.
That decision comes two days after the OECD's cancellation of the planned public consultation for a review of its country-by-country reporting standards under action 13 of the base erosion and profit-shifting project. The OECD cited growing concerns about the coronavirus for the move.
On March 12 yet another multinational agency announced measures to limit exposure to the coronavirus. The European Commission said all staff engaged in noncritical functions will begin working remotely. The commission also suspended all group visits.