Global COVID-19 Individual Income Tax Responses

    Mar 31, 2020 @ 07:12 AM / by Jeremy Piccoli

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    Individual Income Tax Responses to COVID-19

    The global COVID-19 pandemic is having a profound impact on all aspects of life: the economy, the healthcare system, and our broader communities. Countries across the globe have been taking immediate action to address the socioeconomic impact of the pandemic, including, but not limited to: traveling and gathering restrictions, public funding expenditures, corporate/VAT/self-employment amendments, remote working guidance, and unemployment benefits. This update is intended to focus solely on the responses that governments have made with regards to individual income taxation, as of April 1, 2020.


    Country-by-country Individual Income Tax Responses

    Australia

    • Temporarily reduced minimum drawdown rates for superannuation.
    • Temporary early release of superannuation, up to $10,000 of 2019-2020 superannuation, and $10,000 in 2020-2021.
    • $750 tax-exempt payments to social security, veteran, and other income support recipients and concession card holders: first round: 3/31/20, second round: 7/13/20.

    Austria

    • Filing deadline extended to August 31, 2020.

    Belgium

    • Automatic two-month extension of tax year 2019: individual income tax return due date moved to May 12, 2020. No penalties or late payment interest will be assessed.
    • Deferral of payment of withholding and/or personal income tax for individuals able to demonstrate they are negatively impacted.

    Canada

    • Taxable income support payment to eligible workers with loss of income, CAD 2,000/month, up to four months. In order to receive the payment, an individual must meet the eligibility requirements:
        • Have stopped working due to COVID-19, and not have access to paid leave or other income support
        • Be sick, quarantined, or taking care of someone who is sick with COVID-19
        • Be a working parent who must stay home without pay to care for children
        • Be employed, but not being paid because of an employer directive
        • Be a wage earner or self-employed individual who would not otherwise be eligible for Employment Insurance
        • Not have voluntarily terminated their employment
    • The minimum required annual withdrawal payments from Registered Retirement Income Funds (RRIFs) and Registered Pension Plans is reduced by 25% for 2020.
    • The goods and services tax (GST) credit is doubled for the 2019-2020 benefit year
    • 6-month suspension on the payment of interest and principal on Canadian student loans, to September 30, 2020
    • Temporary increase of the Child Care Benefit, up to $300 per child
    • Filing deadline extended to June 1, 2020.

    China

    • Subsidies and bonuses received by medical workers participating in epidemic control and treatment are exempt from individual income tax.
    • Charitable contributions to epidemic control and treatment are fully deductible for individual income tax.

    Czech Republic

    • Filing deadline extended to July 1, 2020. No penalties or late payment interest will be assessed.

    Estonia

    • Temporary suspension of contributions to the mandatory funded pension scheme.

    Germany

    • Reduced hours compensation benefit rules have been adjusted to conform to current needs.
    • Enforcement measures and late payment penalties are waived until December 31, 2020.

    Indonesia

    • Filing deadline extended to April 30, 2020.

    Italy

    • Companies must pay an extraordinary bonus of EUR 100 for the month of March to all employees with annual income less than EUR 40,000 in the previous year.
    • 15 days parental leave at 50% wage, or a EUR 600 bonus for employees with children under the age of 12.

    India

    • Filing deadline extended to June 30, 2020.

    Japan

    • Filing deadline extended to April 16, 2020.

    Netherlands

    • Deferral of payment of individual income tax for individuals able to demonstrate they are negatively impacted.

    New Zealand

    • Permanent increase in social welfare benefits.
    • Temporary doubling of the Winter Energy Payment.
    • Enabling working families with children to receive the Work Tax Credit, without meeting the minimum working hours test.
    • Threshold to pay provisional income tax for tax year 2020/2021 increased from NZD 2,500 to NZD 5,000.

    Nigeria

    • 180-day moratorium on residential mortgage obligations obtained by individual contributors under the Nigerian Housing Fund (NHF).

    Peru

    • Employers obligation to withhold 10% of salary for private pension contributions is suspended.

    Poland

    • Filing deadline extended to June 30, 2020.

    Portugal

    • Filing deadline extended to July 31, 2020.

    Puerto Rico

    • Filing deadline extended to July 15, 2020.

    Singapore

    • Central Provident Fund (CPF) contributions are not required on the reimbursement of expenses (such as meals, transportation, lodging) for employees working in a different location due to COVID-19 issues, such as working from home or overseas. Cash allowances given to employees would still be subject to CPF contributions.

    South Africa

    • Tax subsidy of ZAR 500/month for the next four months for private sector employees earning less than ZAR 6,500/month.

    Spain

    • Deferral of payment deadline of tax not exceeding EUR 30,000 from March 13, 2020 to May 30, 2020.

    Taiwan

    • Filing deadline for impacted individuals extended to June 30, 2020.

    Thailand

    • Filing deadline extended to August 31, 2020.
    • Health insurance premium deduction increased from THB 15,000 to THB 25,000.

    United States:

     


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    Topics: International Tax, Global mobility, News, global compensation, Mobility trends, Tax, International Tax Summaries, International Tax Guide, United States, Global Mobility News, Coronavirus, COVID-19

    Jeremy Piccoli

    Written by Jeremy Piccoli

    Jeremy joined AIRINC in the fall of 2012 and is responsible for managing AIRINC’s International Tax Guide and tax calculator products, as well as consulting with clients. Prior to joining AIRINC, Jeremy spent more than 6 years with PricewaterhouseCoopers’ International Assignment Services practices in Hartford and Boston, providing tax compliance and consulting services to multinational companies and their expatriate population. He received his B.S. with a concentration in Accounting and a Master of Science in Accounting from the University of Connecticut. Jeremy is an Enrolled Agent, a federally licensed tax practitioner who specializes in taxation.