COVID-19: Individual Income Tax Responses
The economy, healthcare systems, and our broader communities are all being impacted by the global COVID-19 pandemic. In response, countries across the globe are acting swiftly 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 23, 2020. This post is an update of my original article published on March 31, 2020 and the ensuing update posted on April 14, 2020. Numerous notes and locations have been added to this expanded version.
Country-by-country Individual Income Tax Responses
- An 'emergency family income’ one-time payment in the amount of ARS 10,000 for qualified unemployed and low-income workers.
- 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.
- Filing deadline extended to August 31, 2020.
- 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.
- 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.
- Temporary personal income tax exemption for tourism and aviation sector employees.
- 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.
- Mandatory employee and employer contributions to pension funds for April and May 2020 have been reduced from 4% to 0.75%, and 12% to 2.25%, respectively.
- Filing deadline extended to July 1, 2020. No penalties or late payment interest will be assessed.
- Filing deadline extended to September 1, 2020.
- Filing deadline extended to May 29, 2020.
- Temporary suspension of contributions to the mandatory funded pension scheme.
- French tax authorities issued a clarification that the COVID-19 lockdown should not have consequences related to taxpayers’ residency status under domestic law and existing tax treaties. Under domestic law, days spent in country due to exceptional circumstances are not taken into account, and therefore a temporary stay because of voluntary isolation or travel bans will not impact residency status. Similarly, under tax treaties, authorities have indicated that the pandemic is a situation of force majeure, and therefore should not be considered to have their permanent residence or center of vital interests in France during the lockdown.
- 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.
- Payment deadline for salaries tax and personal assessment are automatically extended by three months.
- Temporary abolition of payroll taxes and social insurance contributions for taxpayers in defined affected sectors (hospitality, transportation, entertainment, etc.).
- A one-off child benefit payment will be distributed on June 1, 2020 for all families with children under the age of 18. The benefit will be ISK 40,000 per child for average monthly income less than ISK 927,000 and ISK 20,000 per child for monthly income in excess.
- Filing deadline extended to June 30, 2020.
- Filing deadline extended to April 30, 2020.
- A Temporary Wage Subsidy Scheme has been announced, with employers refunded up to 85% of qualifying employee wages.
- 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.
- Filing deadline extended to April 16, 2020.
- Parents of school-aged children working in the private sector that cannot fulfill their work obligations remotely are eligible for a direct payment of EUR 166.15 per week.
- 90-day payment deferral of individual income tax and social security contributions due in March, April, and May 2020.
- A one-time emergency income grant of NAD 750 to eligible Namibian citizens between the ages of 18 and 60.
- Deferral of payment of individual income tax for individuals able to demonstrate they are negatively impacted.
- A 0.01% discount for early payment of tax due is available for certain taxpayers.
- Travel allowances of a ‘fixed and equal’ nature during the state of emergency may be provided tax free if certain conditions are met.
- 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.
- 180-day moratorium on residential mortgage obligations obtained by individual contributors under the Nigerian Housing Fund (NHF).
- Employers obligation to withhold 10% of salary for private pension contributions is suspended.
- Filing deadline extended to June 30, 2020.
- Filing deadline extended to July 31, 2020.
- Filing deadline extended to July 15, 2020.
- Income tax exemption of assistance payments granted by employers, and special distributions from retirement accounts.
- Benefits in kind provided to ‘vital’ employees (as defined by the employer) that are isolated during the state of emergency are not subject to tax and social security contributions.
- Filing deadline extended from April 18, 2020 to May 31, 2020.
- 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.
- A one-off cash payout will be provided in August/September 2020 to all Singaporeans aged 21 and above. The amount is $300, $600, or $900 depending on 2019 assessable income, with an additional $300 for each eligible parent, and an additional $100 for Singaporeans aged 50 and above.
- Contributions to the COVID-19 Response Fund are fully tax deductible.
- Employees not able to work, or whose employers are temporarily unable to ensure work are entitled to reimbursement of salaries and exemption from social security contributions.
- Employees receiving salaries from companies with a revenue decrease of at least 20% compared to 2019 are exempt from pension and disability contributions (subject to further qualifications).
- Tax subsidy of ZAR 500/month for the next four months for private sector employees earning less than ZAR 6,500/month.
- Deferral of payment deadline of tax not exceeding EUR 30,000 from March 13, 2020 to May 30, 2020.
- Filing deadline extended to June 15, 2020.
- Filing deadline for impacted individuals extended to June 30, 2020.
- Filing deadline extended to August 31, 2020.
- Health insurance premium deduction increased from THB 15,000 to THB 25,000.
- An exceptional temporary contribution will be levied on employment income received for April 2020. The contribution is equal to 1 day of salary income, and is to be withheld by the employer.
- Statutory Sick Pay (SSP) is expanded for eligible individuals diagnosed with COVID-19, or those that are unable to work due to self-isolation.
- HMRC will reimburse 80% of furloughed workers wage costs, up to £2,500 per month. Employers can choose to cover the remaining wage gap.
- Universal credit standard allowance increased by £1,000 per year, and the minimum income floor is suspended.
- Off-payroll working rules, designed to address non-compliance in pay and employment taxes of contractors, are delayed 12 months to April 6, 2021.
- U.S. Tax Update: State Income Tax Responses to COVID-19
- United States Income Tax Responses to COVID-19
- What is the impact of U.S. tax stimulus payments to Global Mobility? [includes Stimulus Calculator]
- Introduction of a new tax called ‘Sanitary Emergency COVID-19 Tax’, levied on income derived from personal services rendered to the state, departmental governments, state entities and decentralized services during April and May 2020 (and possible extension of additional 3 months).
- Payment deadline for the 2019 personal income tax return is extended to December 31, 2020.
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A changing world amidst the spread of COVID-19
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