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EU VAT Measures in Response to Coronavirus

Denise Hatem
March 23, 2020

Countries worldwide are introducing indirect tax measures intended to mitigate the economic consequences of the coronavirus pandemic. Prospective measures by EU Member States include:  

Austria

Austria has announced that taxpayers can seek elimination of default interest and penalties for late submissions resulting from coronavirus. 

Belgium

Belgium has announced that businesses encountering financial difficulties can apply for a payment plan, exemption from default interest, or remission of fines. Requests must be submitted by 30 June 2020.

Czech Republic

The Czech government has approved a tax package containing various VAT measures. Late filing of control statements is to be handled as follows: a CZK 1,000 fine (triggered when the report is submitted late but before a notice is issued) is automatically waived, provided the fine was incurred between 1 March 2020 and 31 July 2020. Other penalties will be waived at the taxpayer’s request if reasons are coronavirus related. The fee for filing an application for VAT deferral is waived until 31 July 2020.

Cyprus

As part of its Coronavirus Impact Support Program, Cyprus is reducing its standard VAT rate from 19% to 17% between 1 Apri1 2020 and 31 May 2020, and the reduced VAT rate from 9% to 7% between 1 April 2020 and 15 July 2020. VAT filing and payment obligations for businesses with turnover under EUR 1 million are also suspended until the end of April 2020.

Denmark

The Danish parliament passed a bill to extend VAT payment deadlines. For companies paying VAT monthly, the deadline is extended by 30 days for March, April and May 2020. For companies paying VAT quarterly, the first two quarters are combined, to be filed by 1 September. For companies paying VAT half-yearly, the first and second half of the year are combined, to be filed by 1 March 2021. 

Germany

Germany has announced that it will implement tax policy measures facilitating payment deferral and relaxing collections and late payment penalties.

Greece

Greece issued a decree extending the deadline for VAT payment and suspending collection of VAT debts for affected businesses.

Italy

An Italian decree provides that VAT filings are not due until 30 June 2020, with no fines, for entities that have a fiscal domicile or legal or operative address in Italy. Taxpayers in certain industry sectors will also have their March 2020 VAT payments suspended by two months.

Netherlands

Netherlands has announced VAT payment deferral by written request to the tax authority explaining how coronavirus contributed. Following receipt, recovery measures will cease and fines for failure to timely file are waived.  

Poland

Poland has announced a “shield package” to include deferral of the new JPK_V7M (monthly) and JPK_V7K (quarterly) for large businesses from 1 April to 1 July 2020. Tax offices will also consider granting relief to include deferred payment and payment by instalments.     

Portugal

Portugal has published regulations allowing second calendar quarter payments to be made in either three or six-monthly instalments.

Slovak Republic

The Slovak Republic has proposed extending its deadline for VAT payment.

Romania

Romania has announced a new VAT refund mechanism from 1 April 2020 and a filing extension from 25 March 2020 to 25 April 2020.

Spain

Spain has announced it will issue a regulation extending filing deadlines.

Sweden

Sweden has announced possible deferral of VAT payment where the taxpayer shows “it has been forced to use the money to pay for something it could not have anticipated to mitigate the consequences of coronavirus.”  

Sovos Global VAT Solutions

Sovos continues to closely monitor all global VAT developments, including those introduced in response to coronavirus.

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Author

Denise Hatem

Denise Hatem is a Regulatory Counsel at Sovos specializing in international taxation, with a focus on value added tax systems in the European Union. Denise received her B.A. from the University of Connecticut and her J.D. from Notre Dame Law School. She is a member of the Massachusetts Bar.
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