Many countries are now withdrawing COVID-19 VAT reliefs. This includes VAT return filing and/or payments introduced in response to the COVID-19 crisis. While other nations are letting any reliefs expire. 

If your business utilised any of these COVID-19 VAT measures, please get in touch to discuss what you need to consider. Alternatively, contact your dedicated client service team at Accordance.

This article was last updated on 8th July 2020 at 16:00 BST. Have a question about any of the COVID-19 VAT measures? Then book a free call with our VAT experts to discuss any of the COVID-19 VAT  updates below in more detail.

Austria

All businesses can apply for a deferral of VAT payments without incurring an interest charge – the VAT payment has to be made by 30 September 2020.  Late payment penalties will still be applied but can be waived on application by explaining to the Tax Authority how the business has been affected by Covid-19.  However filing deadlines and late filing penalties remain in place so returns should be submitted on time.

Belgium

The Belgian tax authority has announced that VAT filing and payment deferrals in relation to VAT have not been extended. 
The deadline for May 2020 returns is 22nd June 2020 in line with the normal Belgian filing calendar. Companies may be able to take advantage of a short extension regarding their Quarter Two 2020 or June 2020 and July 2020 VAT return filings however these are subject to certain conditions.
Companies are able to appeal fines issued by the Belgian Tax authority for late filing or payment of VAT returns should a penalty be issued.

Bulgaria

No easements in respect of VAT return filing or payment extensions have been announced and none are expected. 

Czech Republic

Currently, there is no postponement for the filing date and deadline for VAT returns. However, if the submission of a return be delayed or payment made late, it is possible to apply for a waiver of penalties that are imposed as long as the business can demonstrate that the delay was due to Covid-19 and its impact on the business.

Croatia

SMEs can apply for a deferral of VAT payments due within 3 months, starting from April 2020, or apply to pay by interest-free instalments.

Cyprus

The Cypriot Tax Authority has announced temporary extensions of VAT payment deadlines will be enacted for the majority of businesses.  The previous turnover condition has been removed.  It is necessary to submit VAT returns on time to benefit from the deferral and the payment of any deferred VAT must be made before 10 November 2020. The previously proposed VAT rate reductions have been withdrawn.  The businesses that are excluded from the deferral include those involved in the retail of food, books and newspapers, computers and toys.

Denmark

A temporary one-month suspension of VAT payments for businesses with a turnover higher than DKK 50Million. This applies from the March 2020 tax return to 25th May 2020.

Estonia

Businesses are expected to meet the VAT return deadline on 20th March 2020, however the tax authority will show flexibility on collecting VAT debts. The Ministry of Finance is preparing to borrow up to EUR 1 Billion to boost business in a state of crisis due to the spread of COVID-19 and to mitigate the effects of the crisis.

Finland

Businesses are advised to continue to meet their VAT return filing and payment obligations. Taxpayers can request the removal of a late-filing or late-payment penalty if they have a justified reason for not being able to meet their VAT obligations, such as illness or quarantine due to COVID-19. 
Taxpayers can request for a payment arrangement with eased terms for the company’s taxes between 25 March and 31 August 2020 although interest will apply, while companies can apply for a refund of VAT already paid to the Finnish tax office in 2020 as a loan with 3% interest.

France

Businesses can apply for a tax payment suspension if they provide evidence of them affected by Covid-19.  However, at present, it appears that it only applies to direct taxes but could be extended to VAT in due course.

Germany

The German Tax Authority has announced that there is no postponement for the VAT return filing or payment dates, however businesses may apply for a payment deferral if the payment would lead to significant hardship. If a payment is made late, it is possible to apply for a waiver of penalties that are imposed as long as the business can demonstrate that the delay was directly due to Covid-19 and its impact on the business.

Greece

The Greek government announced that a four-month VAT payment holiday regarding VAT return payments includes those due from 30th March to 29th May 2020 but only applies to very specific businesses.

Hungary

The Hungarian tax and customs office has issued notice of tax payment deferrals following the spread of the COVID-19 virus. The measures mostly target individuals. However, businesses may apply for tax (including VAT) payment deferrals. But there is a HUF10,000 administrative fee.
The measures for tax and associated penalties and interest include:
  • Postponement of tax payments
  • Step repayment schedule
  • Tax forgiveness

In addition, small and medium sized entities may receive refunds of VAT return credits earlier than normal.

Ireland

Affected businesses are advised to continue to file tax returns on time; late payment interest for the January-February and March-April 2020 VAT return submissions is suspended for SMEs (turnover under EUR 3 million). Other companies can also apply for late payment interest on VAT to be suspended by application to the tax authority.

Italy

The Italian Tax Authority has announced a number of measures for tax relief due to COVID-19 (such as suspension of VAT payment deadlines with a due date between 8th March 2020 and 31st May 2020 to 30th June 2020) however currently all easements apply to certain resident businesses only.

Latvia

Business can defer tax payments on request. The Government also decided to facilitate refunds to businesses by requiring the State Revenue Service to reimburse the approved value added tax (VAT) amount to all taxpayers within 30 days of the VAT filing deadline, without accruing tax until the end of the tax year, with effect from 1st April 2020. Accordingly, it is also planned to return the amount of confirmed VAT currently accrued until the end of 2020, in accordance with the VAT returns already submitted for January and February 2020. A revision of the rate of VAT over payment is possible in 2021 if there are justified reasons.

Lithuania

The Lithuanian Government announced a state of emergency regarding the Covid-19 crisis and has mandated that companies on the approved taxpayers list benefit from automatic VAT deferment relief (limited scope). Other companies with VAT obligations in Lithuania can apply for VAT deferment relief. If the relief applies companies have up to two months following the end of the state of emergency to pay their VAT liability or further apply for alternative arrangements. 

Luxembourg

The Covid-19 relief measure to suspend late filing penalties in Luxembourg has been withdrawn.

Malta

No updates from the Government yet.

Netherlands

VAT filing deadlines remain in place but if a business requires deferral of the payment due, an application can be made to the tax authority.  Longer extensions can be granted with supporting evidence.  The application can only be made once an assessment has been issued for the non-payment of the VAT due.

Norway

The Government announced new measures including a VAT payment deferral and reduction of the low VAT rate. You can read our full update on this here. The tax offices closed for face-to-face meetings until further notice.

Norway approved legislation for Covid-19 measures. This includes a VAT payment delay from 14 April 2020 to 10 June 2020. They also further reduced the low rate of VAT; reduced from an initial 12% down to 6% (8% initially proposed). Parliament approved this for a temporary period of 1 April 2020 to 31 October 2020. 

Poland

The Government confirmed the delay of the extension of the combined SAF-T monthly filing for large companies. They postponed the implementation from the 1st of April 2020 to the 1st of July 2020. Furthermore, businesses who, due to the coronavirus (Covid-19), will have problems paying their taxes on a timely manner can apply for a VAT payment holiday. The tax authorities are also hoping to make VAT refund payments more quickly.

Portugal

The Government extended the VAT return payment deadlines to the following dates automatically:
  • May 2020 declaration: 25/07/2020
  • June 2020 declaration: 25/08/2020
  • Q2 2020 declaration:  25/08/2020
The tax authority will not impose penalties or interest, as long as the correct payment is received by this date. Further easements of payment terms are available by application to the tax authority subject to eligibility criteria. 

Romania

VAT return filing and payment deadlines are unchanged. However the Romanian tax authority extended the postponement of late payment penalties and interest charges to 25th October 2020

Slovakia

The Slovakian government announced various postponements of deadlines for tax returns. However there is no confirmation that the Government will introduce any VAT return filing or payment deferrals as a result of Covid-19. 

Slovenia

Slovenia has announced that the pandemic emergency has ended and reliefs will be withdrawn on 31st May.

Spain

The Spanish Tax Authorities have extended the VAT reliefs that are in place as a result of the Covid-19 crisis.  The deadline for the Q1 2020 VAT return for businesses with a turnover below €600,000 in Spain in 2019 automatically extended to 20 May 2020 from 20 April 2020.  The 20 May 2020 is the deadline for both submission and payment.  Unlike the previous deferral scheme, there is no need to apply for the extension.  As there is no need for an application, there is no requirement for a Spanish bank account which will make the relief more easily accessible for non-resident businesses.

Sweden

The Government will take measures to support financially affected businesses with late penalty and interest fine easements on VAT payments for up to one year. The new rules apply from 7th April 2020, but can be applied retroactively from 1st January 2020.

Businesses with a drop in turnover can also apply for less frequent VAT return filing periods depending on thresholds, whilst companies with an annual turnover below SEK 3 million can apply to account for VAT on a cash basis.

Switzerland

The Government announced VAT payment deferrals and interest rate reductions. Businesses must still submit VAT returns as normal and report the VAT due in the period. You can read our full update here.

UK

HMRC have announced that businesses who have a duty deferment account and who are in severe financial difficulty as a result of Covid-19 can apply to obtain an extension to the due date for payments which are due on 15 April 2020. Read our update here.

Following some confusion as to the extent of the 3 month VAT payment holiday put in place by the UK Government, HMRC have provided some welcome clarification on the application of the measures. You can read our update here.

Finally, businesses must still make any payments due under the VAT Mini One Stop Shop Regime. This is VAT due to the Tax Authorities in other Member States; so the UK Government do not have control of these funds.

We will continue to monitor the situation and provide further updates as required.

What we’re doing…

As a result of Covid-19, we will be moving to remote working for the whole business from Wednesday 18th March. This in line with Government advice and as a business that already operates flexible working practices.

We’re here to support you – above all, our commitment is to keep your business trading confidently throughout Europe. This is of course an unprecedented and evolving situation. So we will keep you informed and support you to the best of our ability.

Book a free call with our VAT experts to discuss any of the above in more detail.

By |July 8th, 2020|