This article was last updated on 10th August 2020 at 14:20 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.
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.
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.
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 and to mitigate the effects of the crisis.
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.
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.
No updates from the Government yet.
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.
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.
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.
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.
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.
HMRC 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.