Tax and financial measures associated with COVID-19

30 April 2021

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.


  • 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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Tax and financial measures associated with COVID-19

26 April 2021

Short Time Working Compensation

Companies/ Individual Tax payers that have partially or wholly interrupted their activities are given the right to apply for a short-time working compensation for their employees salaries in Covid 19 pandemic period.

Short time working compensation will be paid by Social Security Administration Unemployment Fund directly to employees.

Short-term work compensation will expire on 31.03.2021 if it is not postponed.



Ban of Cancellation of Labour Contract and Non-Paid Leave Compensation

According to law No. 7244, termination of the employment contract by the employer and taking the employee on unpaid leave is prohibited until 17.05.2021, except for ethical provisions.

Employers have right to give non-paid leave to employees without employees approval. In this time non-paid leave compensation will be paid by Social Security Administration Unemployment Fund directly to employees as 47,70 TL daily.


Credit Package

It is announced that for micro and small firms in order to support employment, only once, a Loan Guarantee Fund (KGF) will be provided with a loan of up to 100.000,00 TL without repayment for 6 months, which can be extended to a maturity of 24 months.


VAT Rate Reductions For Certain Services

According to the presidential decree (published in the Official Gazette dated 31.07.2020), reduced VAT rates applied on some goods and services from 31.07.2020 to 31.12.2020.


It was extended until 31.05.2021 in accordance with the presidential decree (published in the Official Gazette of 23.12.2020).

VAT rate for some services were decreased to 8% and 1% until 31.05.2021.

VAT rate of workplace rental service was reduced from 18% to 8%. until 31 July 2021.

VAT rate for  education services was decreased from 8% to 1% until 30.06.2021.

VAT rate for restaurants is reduced to 8%; for other small restaurants the previous rate of 8% is reduced to 1%.

The Turkish Ministry of Finance announced the following measures in relation to tax obligations:

* Introduction of accommodation tax was deferred until January 2022.

* The withholding tax rate for rental of business premises and rental of vehicles is also reduced from 20% to 10% till 31 July 2021.

* 1.000,00 TL of aid has started to be provided to families in need by Social Services Ministry.

It is also announced that 750,00 TL rent allowance will be made in places where the workplaces are located in big cities and 500,00 TL will be paid in other cities and these payments will continue for 3 months.


New Economic Reforms announced for 2021-2021-2023

The package that is announced 16th March 2021 aims to grow the Turkish economy on the basis of investment, production, jobs, and exports. Turkey focused on public finance, inflation, the financial sector, current account deficit, and employment as part of macroeconomic stability.

According to reform package a tax exemption for low-income tradesmen will be introduced. Approximately 850,000 tradespeople who are subject to small business taxation rules, such as hairdressers, plumbers, haberdasheries, carpenters, lathe makers, tea shop operators, tailors, and repairmen will be exempted from income tax.

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A brief overview of Australia’s economic response to COVID-19

By Peter Bembrick, HLB Australia


The Australian Federal Government’s response to COVID-19 has been swift and sweeping. Since 12 March 2020, it has released three tranches of economic measures to support businesses, households and individuals who will experience financial hardship as a result of the pandemic.

The  Federal Government initially committed AUD299 billion in stimulus to support the Australian economy and people during the economic downturn arising from COVID-19.  The 2020-21 Federal Budget brings the Government’s overall support to AUD507 billion including AUD257 billion in direct economic support.

Below is a summary of some of the key economic measures that have been announced by the Australian Federal Government.

Support for employers and employees

JobKeeper Payment Program

The JobKeeper Payment provides a wage subsidy to businesses impacted by COVID-19. The Government will provide eligible employers with AUD1,000 per fortnight per employee (previously AUD1,500 for the period 30 March to 27 September 2020, and AUD1,200 for the period 28 September 2020 to 3 January 2021) to help them retain workers through this period. Key points related to this measure include:

  • Employers will be eligible if, at the time of applying, they estimate that their turnover has fallen (or will likely fall) by at least 30% as a result of the current restrictions / COVID-19 impact relative to a comparable period in the prior year.
  • Businesses whose “aggregated turnover” for income tax purposes is likely to exceed AUD1 billion must instead show a 50% reduction in turnover. For testing whether the 50% rate applies the turnover of certain related entities, including foreign residents, is taken into account.
  • Registered charities will be eligible if they estimate their turnover has fallen (or will likely fall) by at least 15% or more relative to a comparable period a year earlier.
  • Turnover is defined to be “GST turnover” as reported on Business Activity Statements. It includes all Australian taxable supplies and GST free supplies but not input taxed supplies.
  • Consistent with the GST law turnover includes only Australian-based sales, so a decline in overseas operations will not be counted in the turnover test.
  • The JobKeeper Payment covers part time, full time, stood down employees and long-term casual workers (that is, those who have been with their employer on a regular and systematic basis for at least 12 months).
  • There is a “one-in-all-in” rule where participation must be offered to all eligible employees, but the employee is not required to accept the offer.
  • Originally, payments were only be available for a period of 6 months from 30 March 2020.
  • However, the JobKeeper Payment Program has been extended for an additional 6 months ending 28 March 2021.
  • Employers will need to report to the ATO on a monthly basis regarding the number of eligible employees.
  • To be eligible however, employees cannot be getting other benefits such as JobSeeker payments.

JobMaker Hiring Credit scheme

The JobMaker Hiring Credit scheme is an incentive for businesses to employ additional young job seekers aged 16–35 years.

The JobMaker Hiring Credit is:

  • AUD200 per week for each eligible employee aged 16 to 29.
  • AUD100 per week for each eligible employee aged 30 to 35.

Eligible employers:

  • can access the JobMaker Hiring Credit for each eligible additional employee they hire between 7 October 2020 and 6 October 2021
  • Will be able to register with the Australian Taxation Office from 6 December 2020.
  • Can claim payments in arrears from 1 February 2021.
  • Can claim payments for eligible additional employees for up to 12 months from their employment start date.
  • Cannot claim JobKeeper and the JobMaker Hiring Credit at the same time

Temporary full expensing

Businesses with an aggregated turnover of less than AUD5 billion can immediately deduct the business portion of the cost of eligible new depreciating assets.

Key points include:

  • Certain assets are excluded such as assets allocated to a software development pool, certain primary production assets, buildings and other capital works / improvements, and assets that are not located in Australia.
  • The temporary full expensing measure operates on an opt-in basis. Eligible businesses may choose to claim a deduction using other depreciation rules (e.g. the instant asset write-off measure).
  • The eligible new assets must be first held, and first used or installed ready for use for a taxable purpose, between 7.30pm AEDT on 6 October 2020 and 30 June 2022.
  • For businesses with an aggregated turnover of less than AUD50 million, temporary full expensing also applies to the business portion of eligible second-hand depreciating assets.
  • Corporate tax entities that do not meet the AUD5 billion aggregated turnover test can access temporary full expensing if they satisfy an alternative income test.

Loss carry back

The Government will allow companies with turnover up to AUD5 billion to offset losses against previous profits on which tax has been paid, to generate a refund.

Losses incurred up to 2021‑22 can be carried back against profits made in or after 2018‑19. Eligible companies may elect to receive a tax refund when they lodge their 2020‑21 and 2021‑22 tax returns.

Instant asset write-off

From 12 March 2020, the instant asset write-off threshold was increased to AUD150,000 (up from AUD30,000) and access was expanded to include businesses with a turnover of less than AUD500 million (up from AUD50 million).

The threshold applies on a per asset basis, so eligible businesses can instantly write-off multiple assets each costing less than AUD150,000 that are purchased by 31 December 2020.

Boosting cashflow for employers

From March to September 2020, eligible SMEs were eligible to receive a tax-free cash flow boost of between AUD20,000 and AUD100,000 through credits in the activity statement system when they lodge all relevant activity statements. Key points related to measure include:

  • The business must have an aggregated annual turnover of less than AUD50 million and employ workers
  • To be calculated based on the PAYG withholding as recorded in the affected business’ quarterly activity statement

Supporting apprentices and trainees

Employers were able to access the wage subsidy after an eligibility assessment was undertaken by an Australian Apprenticeship Support Network provider. Details include:

  • Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020
  • Employers were reimbursed up to a maximum of AUD21,000 per eligible apprentice or trainee (i.e. AUD7,000 per quarter)
  • Eligible small businesses are those employing fewer than 20 full-time employees who retain an apprentice or trainee (with the apprentice or trainee being in training with a small business as at 1 March 2020).

The Government is extending and expanding the Supporting Apprentices and Trainees wage subsidy as follows:

  • From 1 July 2020, the subsidy will be available to support small and medium businesses with fewer than 200 employees, including those using a Group Training Organisation, who retain an Australian Apprentice engaged as at 1 July 2020.
  • Eligible employees can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage paid during the 9 months from 1 July 2020 to 31 March 2021, up to a cap of AUD7,000 per quarter.
  • Employers of any size including Group Training Organisations that re-engage an eligible out of trade apprentice or trainee will also be eligible for the subsidy.

SME Guarantee Scheme

The Government assisted guarantee 50% of new bank loans issued by eligible lenders by 30 September 2020 to SMEs. Unsecured loans of up to AUD250,000 with a three-year term and no repayments for the first six months.

SME Recovery Loan Scheme

The Government’s SME Recovery Loan Scheme is designed to support the economic recovery, and to provide continued assistance, to firms currently on JobKeeper. The Government will work with lenders to ensure that eligible firms will have access to finance to maintain and grow their businesses when JobKeeper ends.

The scheme is only open to recipients of the JobKeeper payment between 4 January 2021 and 28 March 2021.

Phase 2 of the existing SME Guarantee Scheme will remain open to eligible borrowers until 30 June 2021, and SMEs with Phase 1 or Phase 2 loans will be able to apply for loans in SME Recovery Loan Scheme.

Participating lenders are offering guaranteed loans on the following terms under Phase 2:

  • Borrowers can access up to AUD5 million in total, in addition to the Phase 1 and Phase 2 loan limits.
  • The Government guarantee will be 80% of the loan amount.
  • Lenders are allowed to offer borrowers a repayment holiday of up to 24 months.
  • Loans can be used for a broad range of business purposes, including to support investment. Loans may be used to refinance any pre-existing debt of an eligible borrower, including those from the SME Guarantee Scheme.
  • Loans are for terms of up to 10 years, with an optional repayment holiday period.
  • Loans can be either unsecured or secured (excluding residential property).
  • The interest rate on loans will be determined by lenders, but will be capped at around 7.5 per cent, with some flexibility for interest rates on variable rate loans to increase if market interest rates rise over time.

Insolvency and Director relief

On 22 March 2020, the Government announced temporary relief for financially distressed companies, to provide the opportunity for as many businesses as possible to survive.

On 7 September 2020, the Government announced a further extension of this relief to 31 December 2020. The relief includes changes to insolvency laws to provide:

  • A temporary increase in the threshold at which creditors can issue a statutory demand on a company from AUD2,000 to AUD20,000, and a temporary increase in the time companies have to respond to statutory demands they receive from 21 days to 6 months.
  • Temporary relief for directors from any personal liability for trading while insolvent, with respect to any debts incurred in the ordinary course of the company’s business.

As part of the JobMaker Plan the Government has announced that it is implementing permanent insolvency reforms to help small businesses survive the economic impact of the COVID-19 pandemic.

Bank loan deferral

Australian banks will defer loan repayments for 98% of all affected businesses. Those with a loan of up to AUD10 million will be able to defer repayments for up to six months. The measures are available on an opt-in basis and apply to current customers with existing facilities 90 days prior to applying.

Protection from foreign investment

To address concerns that distressed Australian assets could be vulnerable during the pandemic, the Government has mandated that the Foreign Investment Review Board scrutinise every single purchase application, regardless of its value.

The previous threshold limits for foreign private investment in Australia ranged from AUD50 million to AUD1.1 billion, for land and non-land proposals.

Support for individuals and households

Lower personal income taxes

The Government is delivering an additional AUD17.8 billion in personal income tax relief to support the economic recovery, including an additional AUD12.5 billion over the next 12 months.

In 2020‑21, low- and middle-income earners will receive tax relief of up to AUD2,745 for singles, and up to AUD5,490 for dual income families, compared with 2017-18 settings.

The majority of the benefit for 2020‑21 will go to those on incomes below AUD90,000.

JobSeeker supplement

The JobSeeker supplement provides additional financial support of up to AUD950 per fortnight for those seeking employment. The JobSeeker payments are calculated on a tiered system and may differ depending an applicant’s age, marital status, and whether they have dependents.

Applicants will need to demonstrate they:

  • Are between the ages of 22 and the Age Pension;
  • Meet the income test limits;
  • Meet the residency rules; and
  • Meet rules for one of the following situations:
    • Are unemployed and are looking for work, or
    • Are sick / injured and unable to carry out their usual employment / study for a short time.

Early access to superannuation

Australians affected financially by the virus were granted early access to their compulsory superannuation.

  • Withdraw tax-free up to AUD10,000 of superannuation before 1 July 2020 and another AUD10,000 withdrawal from 1 July 2020 to 30 September 2020.
  • An additional measure is allowing individuals affected by COVID-19 to access up to AUD10,000 of their superannuation in 2019–20 and a further AUD10,000 in 2020–21. Individuals will not need to pay tax on amounts released and will not need to include it in their income tax return.

On 23 July 2020, the Government announced the extension of the application period for the 2020–21 year to 31 December 2020.

Other measures

These additional measures are designed to assist around 6.5 million lower-income Australians, including pensioners and social, security and veteran income support recipients:

  • A one-off AUD750 payment (with one payment per recipient).
  • Reduction of the minimum drawdown for account-based pensions by 50% for the 2019-20 and 2020-21 financial years.
  • ‘Coronavirus supplement’ to welfare recipients of additional AUD550 per fortnight for the next six months and increased eligibility for benefits.
  • Additional AUD750 to social security and veteran income support recipients and eligible concession card holders.
  • Reduction of the social security deeming rates by a further 0.25 percentage points.

Support for industry

The Federal and State Governments have allocated funding for specific sectors directly impacted by the virus in the form of waivers, tax relief, rent relief, cash grants and loans.

Below are links to updates for Australia’s states:

We recommend speaking to an HLB Mann Judd Adviser about what state-based initiative are available to local businesses.

COVID-19 policy initiatives by Australia’s regulatory bodies

ATO administrative relief

  • Additional fringe benefits tax exemptions and concessions for employers providing benefits that they do not usually provide to employees
  • GST deferral allowing affected businesses on a quarterly reporting cycle to opt into monthly GST reporting to get quicker access to any GST refunds
  • PAYG tax instalment variation concessions
  • Income tax deferral
  • Remission of penalties
  • R&D lodgement deferral

ASIC administrative relief

  • As of 9 April 2020 relief takes the form of a one-month extension for unlisted entities with balance dates from 31 December 2019 to 31 March 2020 to lodge financial reports under Chapters 2M and 7 of the Corporations Act 2001.
  • ASIC will not take any action against an entity with a 31 December 2019 year end that fails to hold its AGM by 31 May 2020 as long as the AGM is held by 31 July 2020.

Will further support be needed?

As one of the few countries in the world with a triple-A credit rating, Australia is in a better position than some other countries in this unprecedented and uncertain time. However, it is too soon to speculate on the economic outcome of these measures, whether and what further support will be provided and the burden it will place on our society for the years to come.

Accounting implications

 ASX Class Waiver – Extended reporting & lodgement deadlines

As announced by ASIC in MR20-276, entities have been granted an additional one month to submit their financial reports. The one-month extension covers reporting dates up to and including 7 January 2021, and applies to entities reporting to ASIC under Chapter 2M and Chapter 7 of the Corporations Act. ASIC will also continue to adopt a ‘no action’ position where public companies hold their Annual General Meetings within seven months of reporting date. This means that public companies also have additional time to distribute financial reports to members prior to the AGM

For ASX-listed entities, the one-month extension is effected by an ASX Class Waiver that permits late lodgements. Such a Class Waiver was issued by the ASX on 29 December 2020. It sets out the specific conditions that listed entities must comply with to take advantage of the ASIC relief. In summary:

  • The Appendix 4E (for full-years) and Appendix 4D (for half-years) must be lodged within the usual ASX deadlines (this is not relevant for mining exploration and oil and gas exploration entities).
  • Unaudited or unreviewed financial information must initially be lodged with the ASX where audited or reviewed financial information is not yet available and the ASIC relief is relied on. For entities that are not mining exploration and oil and gas exploration entities, this information would be given as part of the Appendix 4E or Appendix 4D. For mining exploration and oil and gas exploration entities, the information would be provided to the ASX within three months of balance date for full-years, and within 75 days of balance date for half-years.
  • The entity must inform the market that the ASIC lodgement extension is being applied. The timing of the announcement must be either prior to, or at the same time as, the lodgement of the relevant Appendix 4E or 4D (or the unaudited or unreviewed accounts, in the case of mining exploration and oil and gas exploration entities).
  • The entity must immediately inform the market if there is a material difference between its unaudited (or unreviewed) accounts, and its audited (or reviewed) accounts.



Joint guidance issued regarding the impacts of COVID-19 on financial report disclosures

The Australian Institute of Company Directors (AICD), Chartered Accountants Australia and New Zealand (CA ANZ) and CPA Australia have joined forces to issue guidance (available via the link below) on the disclosure and reporting of COVID-19 impacts on entities.


The guidance is designed to assist both listed and unlisted entities (including not-for-profit entities, charities and small to medium entities) in describing the impact of COVID-19 in their annual reports.

Directors and preparers of financial reports may find the guide helpful in navigating the key considerations that are important when assessing how best to disclose the effects of the pandemic when preparing financial reports. A checklist of steps to be taken by directors in approaching annual reporting is provided on page 7 with each consideration explained in more detail in the relevant section of the guide.  Case studies are also provided in Appendix B of the guide.


Covid-19 rent concessions: Practical relief for lessees

IFRS 16 Leases has been amended to simplify lessee accounting for Covid-19-related rent concessions.

Due to current Covid-19 conditions, many lessees are being offered rent concessions by lessors. These could be in the form of, for example, rent deferrals, rent holidays or rent reductions. Under the usual requirements of the new leases standard, AASB 16, such rent concessions may meet the definition of a lease modification, unless they were envisaged as part of the original terms of the lease arrangement. Accounting for lease modifications can be complex and time-consuming, especially for those lessees with numerous leases with varying lease terms.   In response to the above, the International Accounting Standards Board (IASB) has amended IFRS 16 Leases (the international equivalent of AASB 16) to simplify the accounting of rent concessions directly linked to Covid-19 that meet certain requirements.


Lease modification accounting under IFRS 16

Without the relief offered by the IASB, lessees would be required to assess whether any rent concessions they receive meet the definition of a ‘lease modification’ under IFRS 16. A lease modification arises when there is a change in the scope of, or consideration for, a lease that was not part of the original terms and conditions of the lease.


Generally speaking, rent reductions and rent holidays would be lease modifications under the new leases standard. This means, under the usual requirements of IFRS 16, the original lease would have to be remeasured by:

  • Appropriately revising the discount rate;
  • Calculating the net present value of the revised future lease payments using the updated discount rate; and
  • Making a corresponding adjustment (decrease) to the right-of-use (ROU) asset for the decrease in the lease liability. Where the adjustment is greater than the carrying amount of the ROU asset, the excess would be recognised as a gain in profit or loss.


The above remeasurement would entail a substantial amount of work for lessees. Furthermore, the assessment of whether changes are in fact lease modifications could be complicated by force majeure clauses. Judgement may be necessary to determine whether such clauses (whether imposed by law or agreement) are triggered by Covid-19.


The relief offered

The amendment to IFRS 16 essentially eliminates the need, if a lessee so chooses, to determine whether Covid-19-related rent concessions are lease modifications or not. Instead, the lessee accounts for the rent concession as if the change was not a lease modification in accordance with the requirements of IFRS 16 paragraph 38. This means the change in lease payments is treated as a variable lease payment in profit or loss in the period in which the event or condition that triggers those payments occurs.


To be eligible to apply the optional practical expedient, all of the following conditions need to be met:

  • The revised consideration for the lease is substantially the same as, or less than, the original consideration;
  • The reduction in lease payments relates to payments originally due on or before 30 June 2021; and
  • There are no other substantive changes to the terms of the lease.


With respect to the second dot point above, this implies that the practical expedient applies to those payments that are reduced or deferred on or before 30 June 2021 even if subsequent rental increases extend beyond 30 June 2021.

Lessees that elect to apply the practical expedient must apply it consistently to all leases with similar characteristics and in similar circumstances, as required by paragraph 2 of IFRS 16.

No similar relief is provided for lessors. Lessors are required to continue to assess if the rent concessions are lease modifications and account for them accordingly.



The following disclosures are required when the practical expedient is used:

  • The fact that the practical expedient has been applied to all eligible rent concessions, or if only some of them, the nature of the contracts to which it has been applied; and
  • The amount recognised in profit or loss for the change in lease payments arising from the rent concessions, as a result of applying the practical expedient.


Effective date and transition

The international amendment is applicable for reporting periods beginning on or after 1 June 2020 with earlier application permitted, including for financial statements not yet authorised for issue at the date the amendment was issued. Note that the Australian-equivalent amendment has not yet been issued at the date of this Technical Alert, but it is expected to be issued shortly.

Retrospective application is required but only by adjusting the opening balance of retained earnings in the financial statements in which the relief is first applied, rather than by restating prior period numbers.


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Spain Coronavirus response and implications for business

By Andreu Bové, HLB Spain


Tax measures


The following COVID-19 tax measures, published in Royal Decree-Law 5/2021, of 12 March, are applicable in 2021:

  • Defer tax liabilities:

It will be possible to defer payment of tax liabilities corresponding to settlements and self-assessments whose filing and payment deadline falls between 1 April and 30 April 2021. The possibility to defer payment will benefit companies whose turnover in 2020 did not exceed EUR 6,010,121.04, and will apply for liabilities arising from VAT, withholding, output tax, and Corporate Income Tax instalment payments whose value does not exceed EUR 30,000.00.

They can be deferred for a period of 6 months, with no default interest accruing during the first 4 months.

  • Exemption from the variable fee for notarial deeds relating to documented legal acts:

This measure will apply to deeds extending the maturities of financing transactions that have received a public guarantee as provided in article 7 of Royal Decree-law 5/2021, of 12 March, when there exists a registrable secured debt.

  • General exemption from any state, regional, or local tax for transactions charged to the Recapitalisation Fund for Companies Affected by COVID-19:

There is a general exemption from any state, regional, or local tax for all property transfers, corporate transactions and acts directly or indirectly deriving from the application of this provision, including any equity injections or capital increases charged to the Recapitalisation Fund and used for the capitalisation or financial and equity restructuring of investee companies.



Social Security measures / Employer and employee support measures


In view of the situation caused by the pandemic, the Spanish government implemented some exceptional socio-economic measures to cope with COVID-19. These included provisions on Social Security matters, namely the possibility to apply certain exemptions for companies regarding Social Security contributions. However, these measures were not applicable to all companies, but rather only to those that had implemented a Temporary Labour Force Adjustment Plan (ERTE) to reduce working hours or suspend employment contracts and consequently the payment of wages. These provisional plans were introduced as an extraordinary measure to tackle the global pandemic, and thus avoid a social and economic crisis.

Employees affected by the Temporary Plans were paid by the government according to their Social Security contribution base and the percentage reduction of their working hours, thus reducing the employment burden on companies. This original term of the measure has subsequently been extended several times.

At present, companies whose operations are affected by the new public health strategies declared by the government and other authorities may implement a new kind of Temporary Labour Force Adjustment Plan, until 31 May 2021, based on whether their operations have been interrupted or restricted.

Furthermore, on 12 March, the government announced direct aid for companies and self-employed workers that have suffered a decrease in revenue of at least 30% compared to 2019. Nonetheless, the regulation does set out specific requirements in order to apply for these grants, including that the company’s head office must be located in Spain, it must belong of one of the specified industry sectors, and so on.


Economic measures


The Official State Gazette on 13 March 2021 included the publication of Royal Decree-law 5/2021, of 12 March, on exceptional company solvency support measures in response to the COVID-19 pandemic. A new EUR 11 billion support package has been created for companies and the self-employed. It will benefit self-employed individuals and companies registered in Spain whose annual turnover in 2020 has fallen by at least 30% with respect to 2019. The funds must be used for the payment of fixed costs such as leases, salaries, utilities, or trade payables.

The beneficiaries must assume the following commitments:

  1. a) They must maintain their operations corresponding to the support received until 30 June 2022.
  2. b) They may not distribute any dividends in 2021 or 2022.
  3. c) They may not approve any increases in the senior management’s remuneration for at least two years from the application of one of the measures.




Accounting implications


There are currently no plans to change the normal deadlines for preparing and approving annual accounts for 2020, in contrast with the previous year’s moratorium during the state of alarm.

Companies must assess whether there are any doubts at year-end or at the date of preparation as to their ability to continue as a going concern in light of the consequences of the pandemic. If so, for the purposes of preparing the accounts, they must apply the Spanish Institute of Accounting and Auditing (ICAC) Resolution of 18 October 2013 for companies in liquidation.

At the end of the financial year, they must take into account all the effects deriving from the various Royal Decrees adopted in 2020, and their respective accounting implications: contractual changes in leases, staff restructuring, grants, and expenses and related provisions.

It will also be of vital importance to make the relevant disclosure in the notes to the 2020 financial statements in each of the affected sections, rather than in events after the balance sheet date: recognition of income, increase in insolvency provisions, impact on inventory turnover, and useful life of assets, to name but a few.


It is worth highlighting that this year has already seen the adoption of a regulatory change affecting Spanish GAAP (Plan General de Contabilidad) and the content of the financial statements and annual accounts. Although unrelated to COVID-19, this will be yet another factor for companies to grapple with this year, in addition to the introduction of IFRS 9 and 15, and the changes that this entails.

We are closely monitoring the latest developments. If you are a business operating in Spain and would like to discuss the implications for your operation in more detail, we welcome the opportunity to do so.

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Tax and financial measures associated with COVID-19

1 April 2021

The Parliament implemented a number of legislative amendments in response to the COVID-19 outbreak in Cyprus and its impact on the Cyprus economy. The aim of the measures voted is to alleviate businesses from the negative cash flow impact of the coronavirus outbreak. Additional measures affecting the banking sector are expected to be voted on. We outline below a summary of the main measures that have been voted.


Tax measures

VAT measures – Obligation to pay VAT

Amendments to the value added tax (VAT) law, intended to assist businesses manage their cash-flow due to the coronavirus (COVID-19) pandemic, delay the dates for remitting VAT payments.

The amendments relate to the deferral of payment of VAT for periods ending 31 December 2020 and 31 January 2021. The VAT payment for these periods is due in three equal instalments on the following dates:

  • 10 April 2021
  • 10 May 2021
  • 10 June 2021

The deferral of payment of VAT due only applies to periods ending on 31 December 2020 and 31 January 2021, provided that:

  • The relevant VAT returns are timely filed (10 February and 10 March, respectively)
  • Taxpayers do not come within categories specified in the amending law. Businesses may need to confirm their economic activity code with the tax department to check whether they fall under the specified categories.

If the conditions are met and the amount due is paid in three equal instalments by 10 April 2021, 10 May 2021, and 10 June 2021, neither administrative penalties nor interest will be levied.


Direct Tax Measures

The Minister of Finance has been given power to extend submission of tax returns, tax liabilities deadlines. The Assessment and Collection of Taxes Law, on 12 March 2021, the Minister of Finance has issued a decree No 105/2021 which replaces decree No 155/2020 issued on 9 April 2020.

In accordance with a Decree issued on 12 March 2021, the following deadlines are extended to 30 September 2021:

  • Electronic submission of the 2019 corporate income tax return (TD4), and
  • Electronic submission of the 2019 personal income tax return (TD1A) of individuals preparing audited financial statements (FS).


Business support

Teleconferences and electronic notices for members of administrative organs

The General Principles of Administrative Law (Law 158(I)/1999 as subsequently amended) has been amended to allow the administration (government, local authorities, and all other organs that qualify as a public authority) to call and hold meetings by way of teleconference. This amendment has been introduced to allow the administration to continue to be functional in all circumstances.


Law on emergency measures taken by the Ministry of Labour, Welfare and Social Insurance
The Minister of Labour, Welfare and Social Insurance has been granted power, for the period from 1 March 2021 to 31 March 2021, to determine, with relevant decisions to be published in the Official Government Gazette, conditions, amount and method benefits will be granted under the emergency measures taken in response to Coronavirus, such as special sickness benefit, special leave for care of children, special unemployment benefit as well as other emergency measures that may be decided.

Accounting implications

The Minister of Finance has extended deadline for submission of corporate income tax returns (forms TD4) and for personal income tax returns (forms TD1) of individuals preparing audited financial statements for financial year 2019, from 31 March 2020 to 30 September 2021.

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Tax and financial measures associated with COVID-19

1 April 2021


Economic activities that continues operating during the State of Emergency:

To date, Lima is on a very high alert level, therefore the following economic activities are available:

  • Casinos and slots, gyms, cinemas and performing arts: 20%
  • Performing arts in open spaces: 30%
  • Shopping centers, galleries, department stores, general stores and conglomerates: 30%
  • Necessities sourcing stores, supermarkets, markets, itinerant markets, warehouses and pharmacies: 50%
  • Restaurants and related in internal areas (with ventilation): up to 30%
  • Restaurants and related with outdoor areas: up to 40%
  • Temples and places of worship: 20%
  • Libraries, museums, archeological monuments, cultural centers and galleries, protected areas, botanical gardens and zoos: 40%
  • Club activities and outdoor sports associations: 30%
  • Cultural teaching in open spaces: 40%
  • Banks and other financial entities: 50%
  • Interprovincial passenger transport: 50% to 100% regulated by the Ministry of Transport and Communications.

Likewise, we should point out the State of Emergency is in force until 2 September 2021.

  • 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.


*According to Emergency Decree No. 127-2020, the State extended the remote work modality until 31 July 2021 and established the right of workers to digital disconnection.


  • Perfect suspension of work:  Involves the temporary cessation of the obligation of the worker to provide the service and of the employer to pay the respective remuneration, without extinction of the work 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.



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.
  • REACTIVE rescheduling: According to Emergency Decree No. 026-2021 issued on 6 March 2021, the possibility of rescheduling the payment dates of those credits was approved, the maximum term to request rescheduling is on 15 July 2021, it also extended the grace period for up to 12 more months.
  • Subsidy from company payroll: In order to preserve the employment of private sector workers, it was established that the employer exceptionally receive a subsidy of 35% to 55% of the salaries of workers who earn less than S /. 2,400.00 provided that the conditions established in Supreme Decree No. 003-2021 are met.
  • Monetary subsidy for vulnerable populations: It was approved to provide monetary subsidies for vulnerable households in conditions of extreme poverty or poverty.



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 arranged 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 arranged 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 utilization against future annual taxable profits as provided for in Article 50º 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).


  • 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.


It established that claims will be entered from the SUNAT Portal through Online Operations using the SOL Code.


  • Obligation of Financial System Companies (ESF): Financial entities will have to provide SUNAT with the following financial information on a monthly basis regarding the liability operations they have with their clients, when certain items such as balances, accumulated amounts, averages, higher amounts, and / or the returns generated in a certain account, during the reporting period, exceed 7UIT, which amounts to S /. 30,800.


The information on passive transactions that financial entities must provide to SUNAT is that corresponding to the transactions or operations carried out as of January 1, 2021.


  • Deduction of interest expenses: Since 1 January 2021, it has been in force a new rule / limit for the deduction of interest expenses, applicable even to interest on indebtedness granted prior to the date.


By virtue of the same, the net interests in the part that exceed 30% of the EBITDA of the previous year are not deductible; being that EBITDA should be understood as the third category net income plus net interest, depreciation and amortization, less compensation for losses from previous years.


  • Extension of IR exemptions: The exemptions contained in article 19 of the IR Law are extended until 31 December 2023; including, among others i) income from religious societies or institutions, affected foundations and non-profit associations, ii) interest from development credits granted by international organizations or government institutions, iii) royalties for technical advice, economic, financial or another nature, provided from abroad by state entities or international organizations; iv) interest and other earnings from external credits granted to the National Public Sector, among others.
  • Extension of VAT exemptions: Extends until 31 December 2021, i) the VAT exemption for the issuance of electronic money carried out by the Electronic Money Issuing Companies indicated in article 7 of Law No. 29985; and ii) the exemptions contained in Appendices I and II of the IGV Law, which deal with the sale or imports of certain goods and the provision of certain services.
  • Refund of ITAN 2020: The deadline for SUNAT to resolve requests for refund of the ITAN for fiscal year 2020 and proceed to return said tax is reduced. In effect, the norm provides that the return of the ITAN will be made within a period of no more than 30 business days after the application has been submitted, by means of a credit account.
  • Suspension of fourth category income tax withholdings: The guidelines were established for the suspension of fourth category income tax withholdings during 2021, as long as the projected gross income does not exceed S /. 38,500 (7UIT x 4,400 plus 20% of S /. 38,500).
  • Schedule of expiration of monthly tax obligations 2021: The expiration schedule was established for the presentation of the monthly sworn statements during 2021 of the IR, IGV, ISC and others.
  • Sunat extended the deadline for the incorporation of taxpayers in the electronic invoicing system: SUNAT extended the terms for the incorporation of small taxpayers to the electronic invoicing system, which should have been carried out as of January 1, 2021.

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Tax and financial measures associated with COVID-19

22 March 2021

Tax measures

  • Companies can under certain conditions opt for a tax-free loss carry-back of the profits of fiscal years 2019 and 2020
  • To restore their solvency, companies can opt to create a tax-free ‘recovery reserve’ in their tax return. This regime allows companies to decrease their profit of tax year 2022, 2023 and 2024.
  • Postponement of the property tax due date depending on the region.
  • In addition to the above measures, there is a possibility to apply for a payment plan, an exemption from moratory interest or a remission of fine related to late payment. Please note that this possibility relates to debts companies might already have with the Belgian authorities or that might occur in the next few months. As soon as a debt is certain and the company is not capable to pay this debt due to the economic consequences related to the COVID-19, an application (per debt) is possible.

Social security measures

  • Compensation premium related to social security contributions for companies active in certain
  • No sanction for non-payment of advances.
  • Deferral, reduction, or exemption related to the payment of social security contributions for self-employed.
  • Self-employed can apply for a replacement income (transitional rights).
  • In addition to the above measures, it is possible to apply for a payment plan.

Employee and employer supportive measures

Employers who cannot guarantee social distancing or need to close down due to the measures taken by the Belgian government may apply for temporary unemployment benefits for their employees. The application procedure has been shortened and simplified. A partial temporary unemployment is possible as well. The unemployment benefits amount to 70% of the normal gross salary of the employee with a lump sum maximum of €2.754,76 per month. In addition, the reginal governments can pay extra benefits.

Business support

Measures taken by the Flemish region government:

  • Related to the mandatory shutdown, companies can apply for a nuisance incentive.
  • If suffered a decline in turnover by 60% as compared with the same period of last year, companies can apply for a compensation premium.
  • Guarantees on loans

Measures taken by the Walloon region government:

  • Related to the mandatory shutdown, companies can apply for an incentive.
  • Guarantees on loans

Measures taken by the Brussels capital region government:

  • Related to the mandatory shutdown, companies can apply for an incentive.
  • Guarantees on loans

Measures for self-employed individuals:

“Overbruggingsrecht” or “Droit passerelle” (free translation: Bridging right)

  • Self-employed persons could apply for a special compensation if they work in specific industries which had to close their business or if they ceased their professional activity during an uninterrupted streak of seven days.


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Tax and financial measures associated with COVID-19

22 March 2021


Ireland has been in Level 5 of their Living with COVID-19 plan, which are the strictest level of restrictions since the beginning of 2021. All non-essential services have been closed and employees have been urged work-from-home where possible. The current level of restrictions are in place until 5 April 2021 and there is no major easing of the restrictions expected until mid-summer.


Employee and employer supportive measures

Employers have been encouraged to facilitate their employees working from home wherever possible. If employees are working from home due to the pandemic, they are entitled to claim tax relief against the cost of home expenses included electricity, heat and broadband. Employers may also pay daily allowances of €3.20 per day without deduction of tax toward the expenses.


Temporary Wage Subsidy Schemes & Employment Wage Subsidy Scheme

To qualify for EWSS an employer must be able to demonstrate that the business will experience a reduction in turnover/orders of 30% or more as compared to the corresponding period in 2019 and that the reduction is as a result of the disruption caused by Covid-19. The EWSS was due to cease on 31 March 2021. However, with the extending of the Level 5 COVID-19 lockdown to at least 5 April and potentially to “mid-summer”, the EWSS is being extended to 30 June 2021.


Employers who availed of the TWSS are obliged to report to Revenue the actual subsidy that they paid to employees on each pay date. Revenue will facilitate employers who wish to pay their employees’ 2020 TWSS related tax liabilities. Where an employer pays his employees’ TWSS related tax liabilities, such payments will not be treated as a BIK for the employees. However, the employer will not be entitled to deduct this cost as a deductible expense in computing their profits for tax purposes. This will make this facility unattractive for non-incorporated businesses. Employers using this facility must agree with the employees concerned about the method by which the employees’ TWSS related tax liabilities are to be paid. This facility for employers to pay employees’ TWSS tax liabilities on a BIK-free basis lasts until 30 June 2021.


Business support

Covid Restrictions Support Scheme, Restart Grant Plus Scheme, Microfinance Ireland COVID-19 Business Loan, Enterprise Support Grant for Self-Employed and Trading Online Voucher Scheme.


Finance Bill 2020 introduced a number of measures to support business affected by the COVID-19 pandemic. The measures ranged from supporting businesses that were forced to close due to the Level 5 Restrictions and to avoid them shutting permanently.


The CRSS is a targeted financial support for businesses most severely impacted by COVID restrictions and forced to closed. Many businesses should be able to qualify such as hotels, bars and restaurants and non-essential retailers. To qualify for the relief, businesses must;

The support will be for an amount equal to 10% of the average weekly turnover of an affected business up to €20,000 and 5% thereafter, subject to a maximum weekly payment of €5,000, for each week that their business is affected by the COVID-19 restrictions subject to the business qualifying for a number of conditions.


The Restart Grant Plus operates through a system of rebates and waivers of commercial rates payments from 2019. Companies will receive a total amount equivalent to no more than their 2019 rates bill and there will be a cap per business of €25,000.


For the MicroFinance Ireland Business Loan, an application for finance of up to €50,000 can be made if the company has its turnover negatively affected by COVID-19 by at least 15%, the business is having difficulty accessing finance from banks or credit providers, the business has fewer than 10 employees, its turnover is less than €2m and the Net Worth of the company does not exceed €2m.


Business owners can be provided with a once-off grant of up to €1,000 to restart their business which was closed due to COVID-19 as self-employed workers.



The standard rate of Irish VAT has been reverted to 23% following a temporary reduction to 21% from 1 March 2021. The rate was reduced for a 6-month period, but it has been confirmed that the reduced rate will not be extended until the end of the Level 5 restrictions.


Tax returns must be sent on time regardless of businesses experiencing temporary cash flow difficulties although revenue did not apply penalties for certain returns that were filed late where it was not possible due to the impacts of COVID-19.

Residence in Ireland due to COVID-19 where an individual was unable to leave would be disregarded for corporation tax purposes for a company where the individual was an employee, director, service provider or agent. Revenue advised that the presence in the State should have been for bona fida reasons and records should be kept of the same. For individual tax residence rues, Revenue have confirmed that this will not apply to individuals who entered Ireland after 6 May 2020 and it is mandatory that they must have left Ireland as soon as was reasonable.


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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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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.


  • 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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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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