Malaysia

Tax and financial measures associated with COVID-19

29 June 2020

Malaysia implemented lockdown under the Movement Control Order (MCO) starting from 18 March 2020 aimed to slow the spread of COVID-19: the country’s borders were shut, travel restrictions were imposed, all government, business and private premises were required to close, except for those in the essential services. The approach taken focuses on 6 phases: Resolve, Resilience, Restart, Recover, Revitalise and Reform.

Tranches of proactive and reactive economic measures from the 1st to the 4th phases total valued at RM295 billion were taken by Malaysia to stimulate the economy and assist the people and businesses through this challenging time. A summary of the key economic measures and support introduced to-date are as follows:

Tax measures

  • Tax deduction on selected costs, expenditure and industry
    • Deduction of up to RM300,000 for renovation and refurbishment costs incurred from 1 March 2020 to 31 December 2021
    • Deduction on contributions to charity or project dealing with COVID-19 pandemic
    • Increase in Accelerated Capital Allowance (ACA) rate up to 40% for machinery and equipment, including information communication technology (ICT) until 31 December 2021
    • Additional deduction on minimum 30% rental discount for 6 months as given by landlords to eligible SME tenant
    • Deduction for employers which implement Flexible Work Arrangements (FWA) or undertake enhancement of their existing FWA with effect from 1 July 2020
    • Deduction or allowance for COVID-19 prevention expenditure provided to employees, including COVID-19 testing, purchase of personal protective equipment (PPE) and thermal scanners
  • Tax rebate of up to RM20,000 per year for 3 years of assessment for new established SME between 1 July 2020 and 31 December 2021
  • Tax exemption on selected costs, expenditure and industry
    • Exemption of stamp duty on restructuring and rescheduling of loans
    • Exemption of stamp duty for SMEs on any instruments executed for Mergers and Acquisitions (M&A) for the period between 1 July 2020 and 30 June 2021
    • Exemption of service tax given to accommodation premises operators such as hotels from 1 March 2020 to 30 June 2021
    • Exemption of sales tax and import duty on face mask imported or purchased
    • Exemption of sales tax and import duty on medical, lab and personal protective equipment imported or purchased for donation
    • Exemption of sales tax, excise duty and import duty on ethyl alcohol given to manufacturers of hand sanitisers
    • Exemption of sales tax and import duty for 3 years on equipment and machinery purchased for port operations
    • Full exemption of sales tax on locally assembled cars and 50% exemption of sales tax on imported cars
    • Exemption of Tourism tax from 1 July 2020 to 30 June 2021
    • Exemption of export duty for crude palm oil, crude palm kernel oil and refined bleached deodorised palm kernel oil from 1 July 2020 to 31 December 2020
  • Reduce threshold for selected tax incentives or schemes
    • Application for exemption from complying with conditions due to COVID-19 pandemic and MCO available under the Principal Hub incentive
  • Deferment of tax instalment payment
    • Automatic deferment of monthly tax instalment payment for 9 months given to companies in tourism related business
    • Automatic deferment of monthly tax instalment payment for 3 months given to all SMEs
    • Special early revision in the 3rd month on tax payable estimation for affected businesses
  • Deferment of tax payments
  • Automatic extension of time to 30 June 2020 for payment of sales and service tax for the period from January 2020 to April 2020.
  • Remission of penalty
  • 50% remission of penalty for late payment of sales tax and service tax due and payable from 1 July 2020 to 30 September 2020

Business support

  • Deferment of loan repayments
    • Automatic suspension of SMEs repayment obligation with no penalties and late payment charges for 6 months
  • Reduction on electricity bills given to companies for non-residential properties
    • Discount range from 2% to 15% for 6 months
  • Special cash grant to micro enterprises
    • One off cash subsidy of RM3,000 to eligible micro enterprises
  • Reduction on rental
    • waiver of rental for all premises owned by the federal government
    • discounts on rental for non-residential premises owned by government-linked companies to SME retailers
  • Financing facilities at reduced rates for micro businesses and SMEs to support funding in specific purpose
    • Micro Credit Scheme – maximum RM75,000 per micro enterprise or self-employed individual at financing rate of 0%
    • Special Relief Facility COVID-19 – maximum RM1 million per SME at financing rate up to 3.50% p.a.
    • All Economic Sector Facility – maximum RM5 million per SME at financing rate up to 7% p.a.
    • Automation and Digitalisation Facility – maximum RM3 million per SME at financing rate up to 4% p.a.
    • Agrofood Facility – maximum RM5 million per SME at financing rate up to 3.75% p.a.
    • Micro Enterprises Facility – maximum RM50,000 per enterprise
  • Waiver of listing fees
    • Fee waiver of 12 months for companies seeking to list
  • Expansion of approved activities to provide more value-added services for licensed manufacturing warehouse (LMW) and operating in free industrial zone (FIZ)
  • Other allocated funds in the nation’s recovery plan
    • RM100 million of matching grant for SME Digitalisation
    • RM100 million of grant for Smart Automation
    • Up to RM50 million of matching grant for eligible gig economy platforms
    • RM25 million provision for Global Online Workforce (GLOW) program
    • Up to RM5,000 one-off grant for each eligible childcare centre
    • RM500 million of loan for SME Technology Transformation Fund
    • RM2 billion of funding facility for eligible SME
    • RM400 million of funding facility for micro enterprises with RM50 million earmarked for women entrepreneurs
    • RM1 billion of funding facility for PENJANA Tourism Financing (PTF)
    • RM400 million of funding facility for agriculture and food sector
    • RM225 million of funding facility and support for the arts, culture, entertainment, events and exhibitions sector
    • RM1.6 billion of funding facility for contractors and vendors of small government projects
    • RM200 million funding facility for Bumiputera

Employer support

  • Wage subsidy program to support affected employers
    • Monthly subsidy of RM600 to RM1,200 per eligible employee for up to 3 months from April 2020
    • Monthly subsidy of RM600 per eligible employee for a further 3 months from June 2020
  • Automatic exemption from Human Resource Development Fund levy
    • Levy exemption given to all sectors of businesses for 6 months
  • Reduction on foreign worker levy
    • Discount of 25% given to all SMEs with foreign workers’ permits expiring between April 2020 and December 2020
  • Incentives for hiring the unemployed
    • Youth (school leavers and graduates)
      • RM600 per month for apprenticeships for up to 6 months
    • Unemployed workers below 40 years old
      • RM800 per month for up to 6 months
    • Unemployed workers of 40 years old and above or persons with disability
      • RM1,000 per month for up to 6 months
  • Other allocated funds in the nation’s recovery plan
    • RM2 billion for reskilling and upskilling programmes for Youth and Unemployed Workers

Regulatory Relief

  • Companies Commission of Malaysia
    • Moratorium period of 30 days from expiry of MCO for statutory lodgement
    • Application for extension of time of 3 months for lodgement of annual financial statement by companies with financial year ended between 30 September 2019 and 31 December 2019
    • Application for extension of time for holding of the Annual General Meeting for public companies with financial year ended between 16 September 2019 and 30 November 2019
    • Increase threshold for level of indebtedness under the Companies Act 2016 to RM50,000 until 31 December 2020 to reduce winding up action against companies
  • Inland Revenue Board of Malaysia
    • Additional grace period of 2 months for lodgement of individual annual tax returns
    • Additional grace period of 2 to 3 months for lodgement of annual tax returns for companies with accounting period ending between 31 July 2019 and 31 March 2020

To support the people and employee

  • Financial aid to support low-income and selected group:
    • Eligible single individual
      • one-off cash subsidy of RM500 to RM800
    • Eligible households
      • one-off cash subsidy of RM1,000 to RM1,600
    • Students in higher education
      • one-off cash subsidy of RM200
    • Civil servants and pensioners
      • one-off cash subsidy of RM500
    • Taxi and e-hailing drivers
      • one-off cash subsidy of RM500 to RM600
    • Healthcare workers involved in curbing and preventing the COVID-19 outbreak
      • special monthly allowance during the period
    • Eligible COVID-19 patients and those under quarantine
      • Daily cash subsidy as income replacement for up to 14 days
    • Eligible persons with disability (OKU)
      • one-off financial assistance of RM300
    • Eligible single mothers
      • one-off financial assistance of RM300
    • Eligible volunteer of Home Help Services
      • one-off financial assistance of RM300
  • Financial and tax relief to individuals
    • Job retention for employee under the Wage subsidy program for 6 months
    • Deferment on repayment of hire purchase, housing and study loan for 6 months
    • Rental waiver on premises owned by the federal government and those under public housing for 6 months
    • Discount range from 2% to 50% on electricity bills of all residential properties for 6 months
    • Exemption of Real Property Gains Tax (RPGT) for disposal of up to 3 residential homes by individual from 1 June 2020 to 31 December 2021
    • Exemption of stamp duty up to the first RM1 million on the instruments of transfer and full exemption of stamp duty on the loan agreements for the purchase of eligible residential homes from 1 June 2020 to 31 May 2021
    • Tax exemption of up to RM5,000 to employees who receive a mobile phone, notebook and tablet from their employer with effect from 1 July 2020
    • Special tax relief of up to RM2,500 for the purchase of mobile phone, notebook and tablet with effect from 1 June 2020
    • Increase in tax relief on child care service expenses to RM3,000 incurred for the Years of Assessment (YA) 2020 and 2021
    • Tax relief of up to RM1,000 for domestic tourism expenses incurred from 1 March 2020 to 31 December 2021

To support foreign investors and businesses

  • Tax incentives for company relocating to Malaysia
    • 0% tax rate for 10 years for new investment in manufacturing sectors with capital investment between RM300 to RM500 million
    • 0% tax rate for 15 years for new investment in manufacturing sectors with investment above RM500 million
    • 100% Investment Tax Allowance for 3 years for existing company in Malaysia relocating overseas facilities into Malaysia with capital investment above RM300 million
    • Special Reinvestment Allowance for manufacturing and selected agriculture activity from YA 2020 to YA 2021
    • Double deduction for pre-commencement expenses incurred by international shipping companies to set up regional office in Malaysia

As at 18 June 2020, there have been 8,529 confirmed cases: 8,000 have recovered, 408 are receiving treatment and 121 are deceased.

Since 4 May 2020, Malaysia has progressively introduced conditions to ease the MCO and on 10 June 2020, Malaysia has entered the recovery phase of the MCO where most of the sectors and industries have re-opened. For latest updates, further details and to explore on how we can help those doing business in and with Malaysia, feel free to reach out to us.

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Panama

Tax and financial measures associated with COVID-19

26 May 2020

Tax measures

  • A term of 120 calendar days is granted, starting on 20th March 2020, for the payment of taxes that are caused or must be paid in this period to the General Directorate of Revenue, this grace period will not cause surcharges, fines or interests. This includes ITBMS income tax (VAT), among others.
  • 30th May 2020 is established as the new date to file both the personal and corporate returns.
  • Taxpayers may establish their estimated income tax for the year 2020, for an amount not less than 70% of the tax caused in Income Statements for the year 2019 and pay it in two  terms, September and December 2020.
  • The dateline for the presentation of Income from Non-Reporting Taxpayer Reports, Sales Reports with Debit Cards, and the Report on Purchases and Import of Goods and Services is set for 30th June 2020.
  • The period of effects of the Tax Amnesty Law is extended until 30th June 2020, through which taxpayers may update their situation before the General Directorate of Income and make payment arrangements for unpaid taxes (the Law embeds some benefits for taxpayers as well).
  • The use of fiscal equipment for certain taxpayers is temporarily waived, while the State of National Emergency lasts.
  • 15th July 2020 is the new dateline to file the sworn Declarations of Tax on the Transfer of Personal Property and the Provision of Services (ITBMS – VAT), which period to report were on March, April and May 2020.
  • Donations made to the Panama Solidarity Plan (governmental fund to aid the needy during the State of Emergency) can be recorded as a deductible expense on the personal and corporate income tax statement.

Social security measures

  • Fines, surcharges and interest are suspended for the filing and / or late payment of the monthly statement of workers and salaries for the quota months of February, March, April and May 2020, by individuals or corporations, national or foreign, of public or private law, subject to the compulsory regime and the voluntary regime of the social security fund.

Employee and employer supportive measures

  • Work permits for foreign workers which were due on 12th March and so on, have been extended until further notice.
  • The article of the Labor Code that allows the modification of the working day is temporarily modified, making it possible to reduce the working daily hours through a employer-worker agreement.
  • Granting of early vacations and the teleworking modality is encouraged to avoid COVID¬19 contagion.
  • Businesses which remain open must adopt a Health Protocol develop by the Ministry of Health and the Labor Ministry.
  • Section 8 of article 199 of the Labor Code is modified to allow to the suspension of labor contracts to employees which employers have been forced to temporarily close their companies due to the COVID-19 quarantine measurements, for a period of 30 extendable days.
  • The government begins the delivery of food vouchers and food bags nationwide for all those affected by the suspension of labor contracts or the closings of their jobs.

Business support

  • The Public Services Authority (ASEP) approves a discount scheme for the end customer rates on electric bills for the months of April, May and June 2020.
  • All the procedures for the launching and eviction of real estate destined for residential use, commercial establishments, professional use, industrial and educational activities are suspended, while the State of National Emergency lasts.
  • The Colon Free Zone suspends the collection of leasing fees from companies that do not report operations during the months of April, May and June 2020.
  • The payment of public services such as: electricity, telephone, cellphone and internet are suspended for a 4-month period. After his period, such payment will be distributed among a 3-year period.

Financial measures

  • The Ministry of Economy and Finance authorises the issuance of Global Bonds by the Republic of Panama for up to US $ 3,000,000,000.00, in the international capital market.
  • The Superintendency of Banks of the Republic of Panama allows banks to create a new type of credit, called “modified loans” to allow the debtor to properly attend his obligation in the face of a potential deterioration crisis caused by the COVID-19.
  • Moratorium Law is approved until December 31, 2020, in agreement with the banks, for the payment of mortgage loans, personal loans, to small and medium-sized companies, to the agricultural, livestock, commercial, transportation, and auto loans sectors. and credit cards.

Accounting implications

  • Due to remote working, accountants are facing difficulties to efficiently development their work, which at the same time affects the work of external auditors and tax advisers.
  • During the month of April 2020, the Panama College of Public Accountants (CCPA), the main collegiate union of the accounting profession in our country, has held a series of webinars or virtual conferences in which it has developed important topics related to the financial effects of COVID-19:
    • Tax measures by State of Emergencies COVID-19
    • COVID-19 Labor Measures
    • The Structural Change of Companies and Society After COVID-19
    • Impact on Financial Information in Time of Crisis by COVID-19
  • The CCPA has also shared on its social networks the latest pronouncements issued by the IFRS Foundation, regarding the incidents of COVID-19 in some IFRS already in force, for example: IFRS 9 and COVID-19 – Accounting for expected credit losses applying IFRS 9 Financial Instruments in the light of current uncertainty resulting from the COVID-19 pandemic; IFRS 16 and COVID-19 Accounting for rental concessions related to COVID-19 that apply IFRS 16 Leases.

Others

  • The Executive Body ordered the temporary closure of commercial establishments and companies, 30 days beginning on March 20, 2020. This closure was extended while the National State of Emergency lasts.
  • A 24-hour curfew is declared for the entire population of the Republic of Panama from March 25, 2020 on.
  • The prohibition the consumption and sale of alcoholic beverages is declared.
  • A mobility plan of only one hour is established based on sex and the last number of the personal identity card. Only purchases on food and medicine are allowed.
  • Panama´s air space has been closed. Only humanitarian flights are allowed. Panama´s airports have been closed until June 22nd, 2020.

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Hong Kong

Tax and financial measures associated with COVID-19

21 May 2020

In Hong Kong, the coronavirus (COVID-19) epidemic, together with measures to reduce people flows and increase social distance, has affected many businesses, including the tourism, catering, transport and retail sectors, the arts and culture sector, agriculture and fisheries, conventions and exhibitions business, property management companies, hawkers, registered tutorial schools; as well as amusement game centres, cinemas, fitness centres, beauty parlours, etc which have closed due to Government measures to safeguard public health. The Government has introduced stimulus packages to support businesses and individuals affected by the pandemic.

Details of various measures are as follows:-

Tax measures

  • Reduction of profits tax, salaries tax and tax under personal assessment by 100% in the year of assessment 2019/20 subject to a ceiling of HK$20,000.
  • Waiver of the surcharge for up to one year on tax payments deferred under an approved instalment plan.
  • Automatic three month extension of deadline for payment of salaries tax, tax under personal assessment and profits tax for the year of assessment 2018/19 falling due in April to June.
  • Extending to 1 June 2020 the date for filing country-by-country reporting notification for entities with accounting periods ended between 31 December 2019 and 29 February 2020.
  • Waiver of rates in 2020-21, subject to respective ceilings for domestic and non- domestic properties.
  • Waiver of business registration fees in 2020-21.
  • Waiver of annual return registration fees for two years.

Social security measures

  • Disbursements of HK$10,000 to each Hong Kong permanent resident aged 18 or above.
  • Relaxation of asset limits for able-bodied applicants of the Comprehensive Social Security Assistance Scheme (a household-based scheme) by 100% for six months, helping recipients meet their basic needs.
  • 20% fare concession for Mass Transit Railway for six months.
  • Relaxation of threshold of the Public Transport Fare Subsidy Scheme from $400 to $200 for six months.
  • Interest-free deferral of loan repayment for two years to students receiving loans from the Working Family and Student Financial Assistance Agency.
  • Additional $1,000 for each student receiving $2,500 under the Student Grant for the 2019/20 school year.
  • Extra one month payment of CSSA standard rate, Old Age Allowance, Old Age Living Allowance or Disability Allowance.
  • Waiver of one month’s rent for lower income tenants living in public rental units.
  • One-off special allowance for eligible Working Family Allowance households (equivalent to 2 months’ allowance) and Student Financial Assistance households (HK$4,640).

Supportive measures for employers, employees and self-employed persons

  • Creation of 30,000 jobs in the public and private sectors
  • Monthly wage subsidy (monthly cap of HK$9,000 per employee) for six months for employers who undertake not to implement redundancy of staff.
  • Monthly subsidy of $5,000 for each travel agents’ staff member, active freelance tourist guide and tour escort for six months
  • Monthly subsidy of $6,000 for each eligible active taxi and red minibus driver for six months.
  • Monthly allowance of $1,000 for each cleansing worker, toilet attendant, security staff engaged by service contractors of the Government and Hong Kong Housing Authority for no less than four months.
  • One-off subsidy of $7,500 for each eligible self-employed person.
  • One-off subsidy of $10,000 for each tour coach driver.
  • One-off subsidy of $7,500 for each eligible construction worker.
  • One-off subsidy of $30,000 per vehicle for each registered owner of a taxi, red minibus, non-franchised bus, school private light bus, hire car, and for each licence holder of green minibus service.
  • One-off grant of $7,500 for each registered coach under National Sports Associations and Sports Organisations who has proven coaching record in the past year and for each instructor, coach, trainer and provider of interests classes for schools or organisations subvented by the Social Welfare Department.
  • Subsidies for arts organisations and freelance arts workers to pay the salaries of their staff, contractors and freelance workers as much as possible.

Business support

  • Introduction of concessionary low-interest loan with 100% Government guarantee for enterprises, with maximum loan amount of HK$2 million and repayment period of up to three years, and moratorium on principal repayment for the first six months.
  • Subsidy of HK$250,000 to HK$2.2 million for each licensed catering outlet.
  • One-off subsidy ranging from HK$300,000 to $400,000 for each licensed hotel.
  • One-off subsidy ranging from HK$20,000 to HK$200,000 for each eligible travel agent.
  • One-off subsidy of HK$200,000 (small aircraft) or HK$1 million (large aircraft) for each eligible air operator.
  • One off subsidy of HK$80,000 or HK$200,000 for each eligible food license holder.
  • One off subsidy of HK$80,000 for each eligible retail store.
  • One-off subsidy of up to $3 million for aviation support services and cargo facility operators.
  • One-off grant of $80,000 for each eligible catering outlet in schools.
  • 100% reimbursement of the actual regular repair and maintenance costs and insurance premium for 6 months for the franchised bus companies, franchised/ licensed ferry operators and the Tramways Limited.
  • 75% rental concession for eligible tenants of government premises and eligible holders in respect of tenancies on government land for six months.
  • 75% electricity charges subsidy (monthly cap of HK$5,000) for non-residential accounts for eight months.
  • Waiver of 75% water and sewage charges for non-domestic accounts for 12 months.
  • Increase in waiver amount of rental fees of venues under the Leisure and Cultural Services Department from 50% to 75% for 6 months.
  • Interest-free deferral of loan repayment for 2 years to self-financing post-secondary institutions and non-profit-making international schools which have taken loans from the Government.
  • Other measures to encourage staff to learn new skills and help enterprises to apply technology.

Accounting implications

Preparers of financial statements and auditors should consider the implications of the COVID-19 pandemic:

  • the availability of working capital and accuracy of cash flow forecasts, and consequently on the appropriateness of the going concern assumption,
  • the possibility of impairment of non-financial assets,
  • the availability of observable market transaction or information, and consequently on the difficulty in fair value measurement,
  • the possibility of fraudulent sale transactions and on the amount and timing of revenue recognition, and
  • customers’ liquidity, and consequently on measurement of expected credit loss of trade receivables.

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Cuba

Tax and financial measures associated with COVID-19

20 May 2020

In view of the current situation in Cuba, measures have been tightened at the points of entry into the national territory. This control has been strengthened in navies, ports and airports to avoid the risk of the introduction and dissemination of the new Coronavirus (COVID-19) in the country.

The use of remote work has been prioritised and, within this, remote working has been prioritised with the aim of containing the spread of the virus and reducing the negative effects of the pandemic on workers’ health and its impact on the economic sphere.

Fiscal Measures

  • A bonus is granted for the settlement of payments on account of the Income Tax, consisting of the application of a tax rate of twenty-five per cent (25%), to state-owned enterprises and capital trading companies per cent per cent (100%) cuban, which have affectations arising from COVID-19.
  • Deferral of payment of monthly tax dues, activities subject to the simplified regime or on account of Personal Income Tax, Sales and Services Taxes, and the Use of the Workforce and other taxes; as well as the settlement of Personal Income Tax by Affidavit, as applicable.
  • Business and budgeted entities are exempt from the payment of the Labour Force Utilisation Tax and the Social Security Contribution for the payment of wage guarantees.

Social Security Measures

  • Workers sick from COVID-19 are paid the subsidy for the disease. During hospitalisation they receive 50% of the average salary received by the worker, in the immediate year before the date of the disease; if you are not hospitalised you receive 60% of this average salary.
  • The mother, father or family member who has the status of workers, and are in charge of the care of the child who is suspended from school in primary and special education, receive for the first month a wage guarantee equivalent to one percent of the basic wage, and to maintain the suspension, the guarantee is sixty percent.
  • Wage guarantees received by workers are not subject to:
    (a) Personal Income Tax; and the Special Contribution to Social Security, with the exception of those levied per cent equal to one per cent (100%) of the basic wages for workers in the budgeted sector and those hired by employers to work in the foreign investment sector and users and concessionaires of the Mariel Special Development Zone.

Support measures for employees and employers

In view of the haltion of work activities, the employer prioritizes the relocation of workers in other activities, inside or outside the entity. In cases where self-employment activity is suspended for reasons associated with COVID-19, the following treatment applies during this period:

  • Exempt the taxable taxpayers from payment of all taxes
  • Exempt from payment of the monthly tax quota, corresponding to the Simplified Regime workers hired by the holders of these activities.
  • Maintain payment of these taxpayers’ Special Social Security Contribution; in this case, its postponement is authorised, without requiring default interest,at the request of the taxpayer.

Constable Implications

  • Budgeted units in the health sector independently record the extraordinary costs they incur as part of the creation of conditions to prevent COVID-19 and actions to confront the disease, those linked to the period of quarantine or isolation of people, care for the sick and others related to the protection of the population , enabling or expanding new rooms and premises for patient isolation. The differentiated accounting record of these operations and expenses associated with COVID-19 is carried out according to Cuban financial reporting rules.
  • Disaster recovery expenses incurred in the business system associated with COVID-19 can be financed in the period with the resources of the Reserve for Losses and Contingencies, up to their limit.
  • In the accounting of these transactions, the Reserve for Losses and Contingencies is released as Financial Income, for the amount of expenses recorded as disaster losses, disaster recovery expenses; in such a way as to quantify the expenses incurred and the amount recorded as income balances the company’s result, up to the total amount of the reservation.

Enterprise Support

Due to the health emergency, the company took steps to facilitate the development of the Boards of Directors in virtual sessions, as well as the holding of other meetings. In addition, the government issued transitional regulations related to banking institutions to exempt subjects required from Resolution No. 40 of April 8, 2016 from the Minister President of the Central Bank of Cuba from the presentation of the certification of confirmation of bank statements for April 2020. The financial institutions also suspend the payment of the principal and interest of the financing granted to the following client segments, a period that will be extendable if the country’s epidemiological situation so requires.

  • Natural persons with work disruption whose source of income is wages.
  • self-employed and any other form of non-state management that their activities are suspended.
  • legal persons who fully impede their activity.

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Egypt

Economic measures in face of corona virus crisis

18 May 2020

The government of Egypt took quick and responsive immediate actions, in response to the global Covid-19 outbreak, since the appearance of the first confirmed case in mid Mach 2020.  The situation in Egypt is relatively contained, till date, as compared to other countries, however the curve is still on the rise (refer to info graph below).

Total confirmed cases are reported by Ministry of Heath to be 12,229 and number of deaths totaled 630 individuals in May 17th, 2020. The confirmed cases doubled since beginning of May, when the Ministry of Health reported 6,193 confirmed cases and 415 deaths on May 2nd, 2020.

The situation is closely and continuously monitored by a special committee chaired by the Prime Minister and all decisions are announced to the public. All decisions have a definite time duration, and are revised periodically, depending on the escalation of the issues.

The government is currently considering relaxing the lock down procedures, consistent with the global trend worldwide, in order to avoid prolonged significant economic downturn. In this respect, the government issued a reopening guidelines and protocols pamphlet to provide safety instructions for individuals, corporate and government institutions during the Covid-19 prevalence.

The immediate actions taken are broadly classified into:

  1. Health sector initiatives;
  2. Liquidity measures;
  3. Fiscal actions;
  4. Debt restructuring actions.

Health sector initiatives

These include efforts of social distancing and funds to support the health situation as follows;

  • Temporary closure of all schools, universities, airports, rituals, restaurants and coffee shops (allowing for restricted delivery service), government institutions, with the exception of the ones providing direct health and food services/products, and all sort of public meetings, workshops or exhibitions during the period from mid-March till April 23rd, 2020, subject to extension depending on the situation. The only exceptions are groceries, supermarkets, pharmacies and hospitals/health centers. Starting from April 23rg, 2020, and until further notice, the schools, universities, airports and religious places shall remain closed, however, other retail activities, including shopping malls, are allowed to re-open with fixed closing hours (5 pm);
  • Lately hotels were allowed to re-open, provided they abide by strict hygiene measures stipulated by the government, at 25% occupancy rate in May and 50% occupancy rate in June. However, all group activities, events, weddings and night club/entertainment activities are banned, till further notice;
  • Impose nationwide night-time curfew and stop all types of mass transportation during the curfew period, from 7pm to 6 am until end of March, 2020, which was later relaxed to be from 8pm to 6 am until April 23rd, 2020, then further relaxed from 9 pm to 6 am from April 23rd till further notice;
  • Measures to limit the number of government employees going to work and encouraging through a media campaign and speeches by Prime Minister and President for virtual remote working, social distancing and staying home. Currently, this is being replaced by measures and campaign to live safely with the virus;
  • Provide direct monetary support amounting to EGP 187.6 million to the Ministry of Health, directed to both medical supplies and preventive measures, and bonuses to workers in the health care system. The government announced that 2% of GDP shall be directed to the health sector;
  • Prepare medical sites nationwide to anticipate the escalation of Covid-19 patients;
  • Double the contribution percentage to public expenditure on health in the national budget.

Liquidity measures

These refer to measures to increase liquidity in the market at both national and sector level, as follows;

  • A USD 2.7 billion loan was requested and granted by the IMF, as an emergency support;
  • Reduce the overnight deposit and lending rate and the discount rate by 3% at once in order to create finance accessibility and reduce the cost of borrowing;
  • Provide support to the most affected sectors, to include;
  • Allocate EGP 50 billion loan fund to be directed to the tourism sector at subsidized interest rate for new and expansion projects;
  • Provide credit facility to pay employees’ salaries in the tourism sector to be repaid on a period of 2 years, with grace period of 6 months;
  • Exclude necessity goods from need to raise 100% cash cover for importation;
  • Allocate EGP 20 billion fund to support the capital market;
  • Subsidize the electricity and natural gas tariffs for the industrial sector;
  • Reduce lending interest rate from 10% to 8% for the industrial and tourism sectors;
  • Allow cash subsidies for daily earning workers amounting to EGP 500 per person;
  • Facilitate access to credit facilities for working capital finance and removal of some credit restrictions;
  • Payment of EGP 1 billion of export subsidy arrears and facilitate export procedures.

Fiscal actions

These include tax exemptions and public expenditure at both national and sectoral levels;

  • Proceed with mega infrastructural projects;
  • Provide 3 month tax relief for Real Estate taxes for tourism and industrial sectors;
  • Allow 3 months installments to settle income tax for corporate companies for all affected sectors, during the period April to June, 2020, instead of one-time settlement in April;
  • Allow delay in submission for individual tax reports to April 9th from March 31st;
  • Increase the exemption tax limit for employees from EGP 8,000 to EGP 15,000;
  • Raise the annual raise of public sector and state employees by 7% and 12%, respectively and for pensions by 14%;
  • Tax reduction for the capital market to include removal of stamp duties, postponing capital gains to January 2022, and exemption for foreign investors and reductions of dividends taxes from 10% to 5%.

Debt restructuring actions

  • Delay of settling credit dues for individual banking loans (retail) for a period of 6 months and increase the monthly amount of loan repayment from 30% to 50% of monthly income;
  • Removal ATM withdrawal limits for credit cards and principal dues for credit cards for a period of 6 months;
  • Initiation of debt relief for amounts at risk of default on debt with amounts less than one million EGP;
  • Allow grace period for mortgage lenders, factoring and leasing companies for a period of 6 months;
  • Write-off EGP 17 billion from 226 distressed firms.

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Peru

Tax and financial measures associated with COVID-19

13 May 2020

Labour measures

Essential activities that continue to operating during the State of Emergency: The following workers continue to working:

  • Health
  • From the public sector that provides services necessary to care for actions related to the health emergency produced by COVID-19.
  • Those that produce, supply and distribute food and medicine.
  • Those that assist older adults, girls, children, dependent adolescents and people with disabilities.
  • Those that produce, store, transport and sell fuel.
  • Those that work in a call centre
  • Those that work in financial institutions, insurance and pensions, as well as in their complementary and related services.
  • Those that work in the media.
  • Police and military, and those working in activities similar to those described.

Remote work: Public and private sector employers were empowered to modify the place of service provided for all of their subordinate workers (who do not engage in activities considered essential during the State of Emergency) to the places where they are doing their home isolation during the period of the health emergency.

Perfect suspension of work: It implies the temporary cessation of the worker’s obligation to provide the service and of the employer to pay the respective remuneration, without termination of the employment link, applicable to private sector enterprises that cannot implement the remote mode of work or apply the work license with perceiving remuneration due to the nature of their activities (i.e. not able to reintegrate working hours any longer) or the level of economic impact caused by the health emergency caused by COVID 19.

Restarting economic activities: The State approved the restart of economic activities gradually, which consists of four (04) phases for their implementation, and provided that prior to this restart, entities, companies or natural or legal persons must perform the following actions:

  1. Develop the COVID-19 Surveillance, Prevention and Control Plan at Work, considering the Guidelines for the Surveillance of Workers’ Health at Risk of Exposure to COVID-19, as well as sectorial protocols.
    Phase 1 of the resumption of activities begins in May 2020 and includes the following economic activities: Mining and industry, construction, services and tourism, and commerce.
  2. Register the Plan in the Integrated System for COVID-19 (SICOVID-19) of the Ministry of Health for approval.
  3. As obtained authorization then it can be restarted activities

Financial measures

In order to counteract the negative economic effects caused by the national state of emergency as a result of Covid-19, the following measures are available:

  • State-guaranteed loans: The National Government created the REACTIVA PERU program to provide guarantees that allow companies access to working capital credits of up to 36 months term at preferential rates so that they can meet payments and short-term obligations to workers and service suppliers.
  • Subsidy for company payrolls: In order to achieve the preservation of the employment of private sector workers, it is provided that the employer exceptionally receives a subsidy of 35% for the monthly gross remuneration for each worker when this remuneration is not higher than S/. 1, 500.00.
  • Suspension of workers’ contribution to AFPs (private pension entity): The obligation of employers to withhold and pay the planned contribution to the Workers’ Private Pension System for April was exceptionally suspended.
  • Voluntary Withdrawal of 25% AFP: Voluntary and extraordinary withdrawal was authorised up to 25% (twenty-five percent) of all of its accumulated funds in its individual capitalisation account, with a minimum and maximum withdrawal amount, equivalent to 1 ITU (one tax unit which is 4,300 Soles equivalent to US$ 1,280) and 3 ITU (three tax units), respectively.
  • Monetary subsidy for vulnerable populations: It was approved to provide monetary subsidies for vulnerable households in conditions of extreme poverty or poverty.

Tax measures

Compulsory social isolation during the State of National Emergency has a major impact on the national economy, so the State in order to reduce it has provided for the following tax measures:

  • Faculty of the Tax Administration not to sanction tax debtors: It was provided that during the State of National Emergency, the commission of tax violations incurred by tax debtors is not administratively punished.
  • Modification of default interest rates: It is approved to reduce the default interest rates applicable to tax debts in domestic and foreign currency, corresponding to taxes administered and /or collected by the National Superintendence of Customs and Tax Administration.
  • Extension of the taxable carry forward loss-taking period under system (a) for the loss compensation utilisation against future annual taxable profits as provided for in Article 50 of the Law: Total taxable net losses per determination in the annual income tax (third category) for Corporations of Peruvian source to be established in the year 2020 financials shall be offset by year-to-year, until their amount is exhausted, in the five (5) immediate years subsequently, counted from the fiscal year 2021.

The uncompensated balance at the end of that period may not be computed in subsequent years.

This measure applies to taxpayers domiciled in the country to generate third-grade income tax that they have elected or will elect for system (a).

  • Suspension or decrease of income tax payments from April to July for the fiscal year 2020: Income tax taxpayers may exceptionally reduce or suspend payment of Payments on account for the periods of April, May, June and/or July of the fiscal year 2020.

The suspension or reduction of payment for the payments on account of the Income Tax for those periods depends on the decrease in revenue earned in the months of April, May, June            and/or July of the fiscal year 2020 financial year to those obtained in the same month of the fiscal year 2019.

If there is no decrease, the payment on account of the Income Tax for these periods is calculated in accordance with section 85 of the Income Tax Act.

  • Creation of the Bureau of Virtual Parties of the National Superintendency of Customs and Tax Administration (SUNAT, the Peruvian Tax Administration): The Bureau of Virtual Parts of SUNAT was created in order to guarantee the exercise of the rights of taxpayers, whose objective is to facilitate the presentation of documents in a virtual way, as well as to consult the status of the files linked to those documents through the SUNAT Portal.

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Russia

Tax and financial measures associated with COVID-19

11 May 2020

  • Non‐repayable and tax exempted subsidies to small and medium‐sized businesses (entities and individual entrepreneurs) in May and June ‐ in amount of minimum wage per employee
  • per month
  • For small and medium‐sized (SMEs) businesses ‐ half‐rate reduced insurance payments for the salaries exceeding the minimum wage
  • Expansion of soft loans at deducted rates and microcredit for SMEs • Interest‐free loans for salary payment for companies in affected sectors
  • Deferral until October for rental of state and commercial real estate for affected industries and 50% lowering for other kind of business.
  • Proprietors who have granted a deferral or reduction in rent receive a land tax and property tax exemption.
  • Extension of the deadlines for reporting to the Federal Tax Service to 3 months
  • Calculation of terms taking into account the days recognized by the act of the President as non‐working days
  • Moratorium on tax sanctions for non‐submission of documents, extension of terms for providing clarifications at the request of the tax authority, moratorium (suspension) of all
  • field inspections until June
  • Compensation of non‐refundable airfare rates to tour operators and refunding to citizen for
  • an annulated trip
  • 6‐month loan deferment for SMEs from affected sectors, special conditions for entrepreneurs
  • Credits subsidized by the Central Bank Rate to maintain working capital and maintain jobs • 6‐month bankruptcy moratorium for affected sectors and backbone enterprises
  • Ban on collection of tax debts for SMEs in affected sectors until May 30 inclusive
  • Deferral of payment of all taxes, except VAT, up to 6 months for SMEs from affected sectors
  • Tax breaks for affected industries up to 6 months, deferred payment up to 1 year, instalments up to 3 years, tax holidays (special tax deferral conditions) for backbone companies
  • The minimum base for calculating sick leave and unemployment benefit are set at no less than minimum wages
  • Tax‐free supplement to health workers
  • Additional monthly payments for children under 3 years
  • Credit holidays up to 6 months for a mortgage or consumer loan
  • Preferential mortgages in new buildings at a deducted rate

As the ‘affected industries’ named: all types of transport, travel industry, entertainment industry, cinema, museum and other culture, physical culture, health and fitness centres, food and lodging industry, fair, conference and exhibition activity, education, personal consumer services, dental practice, retail business (non‐food goods).As the ‘affected industries’ are named: all types of transport, travel industry, entertainment industry, cinema, museum and other culture entities, physical culture, health and fitness centres, public catering and lodging industry, fair, conference and exhibition activity, education, personal consumer services (repair shops, hairdressings and beauty salons, laundries etc.) , dental practice, retail business (non-food goods).

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Bahrain

Tax and financial measures associated with COVID-19

11 May 2020

The government of Bahrain has set up a committed National Task Force for Combating the Coronavirus and its associated ministries and authorities to handle and implement strategies to limit both the spread of Covid-19 and its impact upon Bahrain’s economy. Spearheaded by the National Task Force, Bahrain conducted a random testing to its residents and expatriates (one of the world’s highest testing rates per capita as acknowledged by the World Health Organization) and has set up an isolated treatment or quarantine facilities. Furthermore, the government of Bahrain is supporting individuals and companies through a comprehensive US$11.4bn economic stimulus package in its aim to stabilise the economy.

Tax measures

The Kingdom’s National Bureau for Revenue (NBR) has launched and rolled out a COVID-19 impact assessment survey to assess and understand the impact of COVID-19 outbreak on Bahrain businesses.

Social security measures and business support

The following are part of the economic stimulus package that aims to support both businesses and individuals:

  • The automatic payment of individuals’ and businesses’ Electricity and Water Authority bills for three months from April 2020 (up to the costs incurred during the same period in 2019).
  • The payment of all insured Bahraini private sector employees for three months starting April 2020 from the Unemployment Fund, following constitutional procedures and in line with the Social Insurance Law.
  • Exempting all individuals and businesses from municipal fees for three months from April 2020.
  • Exempting all businesses from government-owned industrial land rental fees for three months from April 2020.
  • Terminating monthly work fees and fees for issuing and renewing work permits for three months from April 2020.
  • Exempting all tourism-related industry from tourism levies for three months from April 2020.
  • Doubling the Liquidity Support Fund to US$530m.
  • Increasing the Central Bank of Bahrain’s loan facilities to US$9.8bn to allow debt instalments to be deferred and extra credit to be extended.
  • The Ministry of Industry, Commerce and Tourism has extended the filing date for returns due pursuant to the Economic Substance Regulations from 31 March 2020 to 30 June 2020 for those businesses whose financial year ended 31 December 2019.

Employee and employer supportive measures

  • Termination of monthly work fees and fees for issuing and renewing work permits for a period of three months from April 2020 as announced by the Labour Market Regulatory Authority (LMRA).
  • The redirection of all Tamkeen programmes (semi-autonomous government agency that provides loans and assistance to businesses) to support adversely affected companies, as well as the restructuring of all debts issued by Tamkeen.
  • Allowing ministries, entities and government departments to increase the rate of distance work to 70% as a maximum as approved by the Civil Service Bureau (CSB).

Accounting implications

For accounting implications, IAS 10 defines adjusting events or events after the reporting period are those events, favourable and unfavourable, that occur between the end of the reporting period and the date when the financial statements are authorised for issue. The two types of events are:

  • those that provide evidence of conditions that existed at the end of the reporting period (adjusting events); and
  • those that are indicative of conditions that arose after the reporting period (non-adjusting events)

Thus, the situation at 31 December 2019 was that a limited number of cases of an unknown virus had been reported to the World Health Organisation. There was no explicit evidence of human-to-human transmission at that date. These are the conditions that existed at 31 December. The subsequent spread of the virus and its identification as a new coronavirus does not provide additional evidence about the situation that existed at 31 December 2019, and it is therefore a non-adjusting event.

The spread of the coronavirus is a non-adjusting event. However, events after the reporting date sometimes provide additional information about the uncertainties that existed at the reporting date. Judgement might be required in some situations; for example, the bankruptcy of a customer subsequent to the reporting date might reflect existing issues beyond the spread of the coronavirus.

Going concern

The standard states that the financial statements should not be prepared on a going concern basis where events after the reporting date indicate that the going concern assumption is no longer appropriate. This guidance applies even if those events would otherwise be non-adjusting. Entities should therefore consider whether developments subsequent to the reporting date have any implications for the going concern assumption.

Disclosure

Non-adjusting events do not result in adjustment to the financial statements, but they do require disclosure if material. This disclosure should be transparent and specific to the entity, and it should include the nature of the event and an estimate of its financial effect. Entities should consider disclosing the impact of developments after the reporting date on the carrying amount of assets and liabilities (eg. the need to impair assets or remeasure fair values), or the impact on revenue or on borrowing covenants.

Others

  • As part of the precautionary measures to combat the novel coronavirus (COVID-19), the Ministry of Interior bans gatherings of more than five individuals on roads, yards, beaches, parks and other public places.
  • The Health Minister suspends the BD7 medical consultation fee on health fees for non-Bahrainis.
  • Some hospitals launched the home delivery service of prescribed medicines to ensure the health, safety and comfort of the patients.
  • The Information and eGovernment Authority launched the “BeAware Bahrain” application which advances contact tracing efforts to identify and track active cases of COVID-19.

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Djibouti

Tax and financial measures associated with COVID-19

11 May 2020

On May 6, the authorities announced 1,120 laboratory-confirmed cases of COVID-19. Over 1% of the population has been tested, making it one of the highest percentages of tested compared to the total population on the continent. The authorities have launched a massive door-to-door screening campaign targeting 45,000 people. General confinement, except for essential services, has been extended until May 8.

Tax measures

  • Reduced service
  • Deferral of the tax return payment due date with no penalty
  • Deferral of payment deferral of the salary taxes (ITS) companies impacted by the binding effects of the pandemic of COVID-19

Social security measures

  • Reduced service
  • Use of telework
  • Transfer payments via various bank branches
  • Removal of late penalty
  • Deferral of payment of social security contributions companies impacted by the binding effects of the pandemic of COVID-19

Employee and employer supportive measures

The Djiboutian state has introduced compensatory compensation to the employees of companies impacted by the binding effects of the pandemic of COVID-19. In order to qualify, they must meet a number of conditions.

Thus, the employee will receive compensation for his loss of salary up to 70% of his gross salary, which will be composed as follows:

  • 30% of the gross salary will be paid by the State;
  • 40% of the gross salary will be paid by the Employer.

Also, the compensation must not be less than the SMIC of 35,000 DJF.

The conditions of compensation will apply for 3 months from 1 May 20.

Under the same conditions as wages, companies can claim deferral of the salary taxes (ITS) and social security contributions (CNSS) until 31 July 2020.

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Switzerland

Tax and financial measures associated with COVID-19

4 May 2020

In March 2020, the Swiss Federal Council enacted measures to combat COVID-19. These measures have been well implemented by the population. Its conduct avoided overloading hospital intensive care units. The number of new infections is stable or even declining. For this reason, the Federal Council intends to gradually relax the measures. From the 8th of June 2020, if the forecasts remain encouraging, all sectors of the economy should resume their activities.

Tax measures

  • Possibility to extend tax payment periods
  • Interest on late payment of taxes from March 20 to December 31st, 2020 has been reduced to zero
  • Automatic extension of the deadline for submitting annual tax returns for 2019
  • Deadline for submission of the VAT statement and payment VAT tax may be extended to 3 months after the expiry of the deadline.
  • Some cantons (e.g. Geneva) provide for an extension of the deadline for tax at source rectification
  • Specific tax measures related to COVID-19 may differ from one canton to the other
  • The legal deadlines (deadline for lodging a claim against a tax decision) are not suspended and must therefore be respected
  • Swiss withholding tax and stamp duty are not affected and that interest on arrears therefore continues to be due for these taxes in the event of late payment
  • In Geneva canton
    • Deadline to submit individual and corporate tax returns: 31.05.2020
    • Deadline to submit tax at source rectification: 31.05.2020
    • Extension of deadline to request of information: 31.05.2020
    • Tax Bills and decisions postponed to 30.04

Social security measures

  • Companies impacted by the crisis can request a temporary interest-free deferral of the payment of social security contributions (AVS/AI/APG/AC)
  • Interest on late payment of social security contributions until September 2020, will be reduced to zero
  • Companies have the possibility of adjusting the social contributions instalments in case of a significant reduction of total payroll (same as for the independent worker)
  • Employers may temporarily use the employer’s contribution reserves for the payment of employee contribution to the LPP (pension) occupational benefit scheme

Employee and employer supportive measures

  • Companies can benefit from partial unemployment for a reduction or even a cessation of their activity in connection with the COVID-19 epidemic.
  • The employees should agree in advance for this measure, before the employer applies (amounts to 80% (for full-time employees) of loss of gain attributable to lost hours of work). If the application is accepted, the Employer receives reimbursement by the Unemployment Fund for the salaries paid. The decision is granted for (6) months and is renewable, if the crisis continues.
  • Based on new decisions announced by the Federal Council on April 8, 2020, the rules on partial unemployment have been extended and simplified.
  • Simplified notice request form and simplified statement form
  • Deletion of the notice period
  • Elimination of the waiting period
  • Widening of the circle of employees entitled to RHT indemnities to include, apart from employees with a undetermined duration employment contract: additionally employees on call (provided that they have been employed for 6 months in the company or that their activity rate varies by max. 20%), salaried managers of the company and their spouses working in the company, temporary workers, workers on fixed-term contracts and apprentices
  • Renewal of the notice request when the reduction in the work schedule lasts more than 6 months
  • Removal of the limitation of 4 months of RHT compensation in the event of loss of work greater than 85%
  • Elimination of the obligation to declare to the employer the income derived from another activity during the HTR and elimination of the taking into account of this income for the calculation of the loss of earnings

Business support

All self-employed people whose income subject to AVS contributions is between 10,000 and 90,000 francs are now entitled to the coronavirus loss of earnings allowance, in accordance with decisions announced on Thursday 16 April by the Federal Council. This allowance is intended for the self-employed who have suffered a loss of income because of the measures taken on March 13 by the Federal Council to combat the pandemic (closure or other loss of earnings).

The amount of the allowance corresponds to 80% of the annual income converted into daily gain. The daily allowance amounts to a maximum of 196 francs per day. The allowance is calculated on the basis of the most recent contribution decision for 2019. For this, the annual income is multiplied by 0.8 and divided by 360 days. For example, if your income was 45,000 francs in 2019, the allowance is therefore 100 francs per day (45,000 x 0.8 / 360 days = 100 francs / day).

The self-employed benefit from this allowance for a period of 2 months, from March 17 to May 16. This period is also valid for the self-employed who can reopen their business on April 27 or May 11.

Indemnification in the cultural sector

Loan requests (emergency aid to non-profit cultural enterprises) or compensation for financial losses (for-profit or non-profit enterprises; cultural actors) can be submitted from April 9, 2020 until April 30 2020 if possible, but no later than May 20, 2020.

Accounting/Audit implications

Companies benefiting from the COVID loans must follow strict rules about the use of the funds.

  • Companies cannot pay any dividends
  • Companies cannot lend funds to shareholder
  • Received loans should be used to pay current expenses of the company

As auditor, we need to ensure that these rules are followed. If not, we need to make denunciations to the authorities that the funds are not properly used.

Of course, there is also the “Going Concern” problematic that should be addressed in both Accounting and Auditing side.

Bridging loans

In view of the current COVID-19 epidemic, the Federal Council has adopted a package of various measures, with the objective to helping companies in difficulty to benefit from liquidity.

The Federal Council has taken steps to provide businesses with access to bank loans. The loans COVID-19 (loans up to CHF 500’000) and COVID-19 PLUS (between CHF 500’000 and CHF 20’000’000) are put in place and provided by various banks.

COVID-19 loans are fully guaranteed by the Swiss state and interest-free, without guarantee or other collateral, repayable over (60) months in principle. Companies should be seated in Switzerland and created before March 1st, 2020, should have suffered considerable economic damage as a result of the COVID-19 pandemic, particularly in terms of turnover and should be financially healthy, i.e. not in bankruptcy or debt restructuring proceedings or in liquidation. If accepted, this loan is available within few hours, upon receipt of full set of documents by the bank.

COVID-19 PLUS loans are guaranteed by the Swiss state at 85% and interest of 0.5%, repayable over (60) months in principle. In addition to the conditions above companies should have requested for a COVID-19 loan before asking for a COVID-19 PLUS and pass a credit exam before. If accepted, this loan is available within few days, upon receipt of full set of documents by the bank.

Other

  • Suspension of debt collection proceedings throughout Switzerland from March 19th to April 4th, 2020, in order to alleviate the situation of Swiss companies. During this period, debtors cannot be prosecuted
  • No court hearing to be held between March 16th and April 19th
  • Only urgent court hearings will be held from April 20th and henceforth

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Chile

Tax and financial measures associated with COVID-19

30 April 2020

Labor Measures

  • COVID 19 emergency donation: It is a special donation that is part of the Government’s Economic Emergency Plan, and which aims to support the most vulnerable families in the health contingency by Covid-19.
  • Suspension of the employment contract with pay: Aimed at employers who need to take advantage of the employment protection law because, due to the health emergency, their activities were affected:
    • Suspension of the employment contract by act of authority: it is applied when the health or safety authority orders the total or partial cessation of activities (for example, in the quarantine that some communes are living due to the coronavirus) and allows workers to access their remuneration through Unemployment Insurance (70% the first month).
    • Agreement to suspend the employment contract: the employers who are affected by their activities due to the health emergency caused by COVID-19, may agree with their workers, individually or collectively, a pact of temporary suspension of the employment contract. This agreement will allow workers to access their remuneration through Unemployment Insurance (70% the first month).
    • The duration of the agreements will depend on the type of work:
      • Three months (continuous) in the case of workers with a fixed-term contract, for work, task or service.
      • Five months (continuous) for male and female workers with an indefinite contract.

Financial measures

  • Line of credit to banks with state guarantee for loans: Consists of a guarantee plan for up to USD $ 3,000 million to mobilize credit for companies with annual sales of up to 1 million UF.
  • Income protection plan: Consists of creating a fund to protect the income of the most vulnerable.
  • Incorporation of Central Counterparty Entities and Savings and Credit Cooperatives that comply with regulatory and supervisory standards in the liquidity facilities of the Central Bank.

Taxation measures

  • Postponement of VAT payment for the next 3 months for all companies with sales below UF 350,000, making it possible to pay in 6 or 12 monthly installments at zero real interest rate, depending on their size.
  • Anticipation of the income tax refund corresponding to SMEs, which materialized in April.
  • Suspension of the monthly provisional payments (PPM) of the corporate income tax for 3 months.
  • Postponement until July 2020 of the payment of income tax for SMEs according to what they declare in the April income operation.
  • Postponement of April tax payments for companies with sales of less than 350,000 UF and for people with properties with a tax assessment of less than CLP $ 133 million. The deferred tax will be paid in three installments, along with the following three contribution installments, with a real interest rate of 0%.
  • Transient release from April of stamp duty and stamps at 0% for all credit operations during the next 6 months.
  • Relief measures for the treatment of tax debts with the General Treasury of the Republic (TGR) focused on SMEs and people with lower incomes: flexibility to enter into tax debt payment agreements with TGR, without interest or fines from April .
  • All the expenses of the companies associated with facing the health contingency will be accepted as a tax expense.
  • The Chilean tax authority materializes exceptional return of withholding’s from January and February to 630 thousand independent workers at honorarium

Measures taken by various companies

  • P&G Chile donates 270,000 hygiene and household products to vulnerable families and medical personnel through 2 initiatives.
  • Viña Garcés Silva launches a campaign to support restaurants, by donating a percentage of their online sales.
  • Automotive distributor SALFA launches platform for online purchase.
  • The Komatsu Cummins Chile Group, a provider of solutions for mining, construction and forestry, decided to accelerate payment to all of its SME suppliers, paying all invoices in advance. This meant for that company an early disbursement of 3,317 million Chilean pesos.
  • Coca-Cola strengthened its online sales channel.
  • Casaideas enables online sales channel.
  • Gimnasio Pacific announced the obtaining of a bank loan for CLP $280 million for the purchase of 104 sanitation tunnels.
  • The Christus UC health network and the fuel distribution company COPEC carry out the campaign to apply the PCR test (to detect coronaviruses) “without leaving the car”.
  • The Chilean subsidiary of hearing products GAES makes its debut in e-commerce.
  • Walmart reinforces its digital channel and announces measures paid by e-commerce.
  • The mining company BHP creates a USD $ 25 million fund to support contractor companies.
  • Cabify announces the delivery of microcredit to driving partners.
  • Agrosuper makes available a complex with 200 beds in Freirina.
  • 3M delivers 200 thousand masks to the Supply Center of the National System of Health Services (Cenabast)
  • The CCU company delivers to the Ministry of Health the first batch of gel alcohol made with raw material from beers.

NOTE: 1 UF= CLP $ 27,658 = USD $ 0.30
1 USD = CLP $ 850.41

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South Korea

Tax and financial measures associated with COVID-19

30 April 2020

The COVID-19 situation in South Korea is as follows:
As of 23 April 2020, there have been 10,702 confirmed cases; 8,411 have been released from quarantine, 2,051 are currently isolated and 240 are deceased.
Tests performed 583,971, Test concluded 573,832, Positivity rate 1.9%. Daily new confirmed cases; 10~20 from 19th Apr to 28th Apr 2020

Tax measures

As the general election was done in 15th Apr in favour of government party, the congress will set up and change tax laws and regulations related with grant, incentive, tax rate, etc to keep financial market stable, to stimulate real economy and to help SME’s and low-income class.

Social security measures

  • KRW 20 trillion for social security
    1. Emergency relief efforts
    2. Social security contribution support and tax payment deferrals
    3. Export financing support
    4. Venture and start-up financing
    5. SME support
  • Others
    1. Emergency relief payments to 100% households
    2. Vouchers to help low-income households
    3. Cuts in social security contributions
    4. Measures to encourage rent cuts
    5. VAT cuts for business
    6. SME R&D support
    7. Wage support
    8. Support business reopening
    9. Day-care vouchers to parent with children younger than 7 years

Business support

  • KRW 100 trillion to avoid financial market volatility
    1. Bond market and stock market stabilization fund
    2. Quick bond takeover program
    3. Corporate bond refinancing
    4. Short-term money market stabilization
  • KRW 32 trillion to stimulate the real economy
    1. Low interest loans for small enterprises
    2. Special guarantees for SMEs and small enterprises
    3. Guarantees an insurance for exporters
    4. Loans and investments in ventures and start-ups
    5. Full guarantees for emergency small enterprise loans
    6. Purchase of small enterprises’ overdue debt
    7. Loans for SMEs and medium-sized leading enterprises
  • Industry-specific supports
    1. Airplane; Emergency financing for lower cost airlines, landing fee cuts
    2. Tourism; Loan repayment deferrals and loan extensions, new unsecured loans
    3. Shipping lines; Emergency financing, cuts-in port charges including facilities rental charges
    4. Performing arts; Production support and admission fee support
    5. Dinging out; Expanded loans for farm product exporters
    6. Car; 70% cut of individual consumption tax for all passenger cars

Employee and employer supportive measures

  1. Maintenance of employment; KRW 630 billion to a) help certain industries such as tour, shipbuilding, lodging, DFS, etc b) help employees on leave-without-pay and c) subsidize the companies that keep the previous employment level.
  2. Keep employment for SME, freelancers, etc; KRW 1.5 trillion
  3. Korean ‘New Deal’ of public project for new recruitment; KRW 3.24 trillion
  4. Help Unemployed, youths and provide job training; KRW 3.76 trillion

Accounting implications

  1. There is no material effect on accounting implications.
  2. But, for audit implications; KICPA emphasize ‘subsequent event’ in FY 2019 audit as a one of key audit matters (KAM) in some industries such as aviation, tour, etc.

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