Global COVID-19 Individual Income Tax Responses

Country-by-country Individual Income Tax Responses

Albania

  • A one-time payment of ALL 40,000 is available to certain eligible employees, depending on: (1) the type of sector and entity they are employed in, and (2) earning less than ALL 2,000,000 in 2019.

Algeria

  • Effective June 1, 2020, the exemption from personal income tax is raised from monthly income of DZD 10,000 to DZD 30,000

Angola

  • Private sector employers are required to pay the employee their salary plus the social security contribution (3% of the employee’s salary) in April, May and June 2020.

Argentina

  • An ’emergency family income’ one-time payment in the amount of ARS 10,000 for qualified unemployed and low-income workers.
  • Temporary income tax exemption from March to September 2020 on qualifying special, hazard, or overtime pay for defined frontline workers.
  • Filing deadline extended to between July 24 – 28, depending on taxpayer identification number.

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.
  • EUR 19 billion stimulus packages has been agreed upon which would include a reduction in individual tax rates and a one-time child bonus of EUR 360 per eligible child. The package will now undergo the legislative process to become law.
  • The final version of the stimulus package to be approved includes a provision to extend the top marginal rate of 55% on income exceeding EUR 1 million, which was previously set to expire after 2020, to 2025.

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.

Brazil

  • Individuals suffering financial impact may apply for negotiated tax reductions and installment plans for debts.

Cameroon

  • Donations to COVID-19 charities are fully tax deductible.

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:
    1. Have stopped working due to COVID-19, and not have access to paid leave or other income support
    2. Be sick, quarantined, or taking care of someone who is sick with COVID-19
    3. Be a working parent who must stay home without pay to care for children
    4. Be employed, but not being paid because of an employer directive
    5. Be a wage earner or self-employed individual who would not otherwise be eligible for Employment Insurance
    6. 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.
  • Up to CAD 500 can be reimbursed tax-free for telework equipment for employees working from home
  • Comprehensive support of nearly CAD 9 billion has been announced for post-secondary students and recent graduates in the form of cash benefits, grants, job creations/placements, training opportunities, and financial support.
  • Canada has issued guidance and agency positions regarding COVID-10 income tax issues on tax residency, permanent establishment, cross-border employment, and waiver requests.

Cape Verde

  • Filing deadline extension to July 31, 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.
  • The effective tax rate for qualifying individuals in the Hainan Free Trade Port will be capped at 15%.

Colombia

  • 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.
  • The Colombian Tax Administration clarified that the period of stay in Colombia for individuals unable to leave the country due to travel restrictions will be taken into account for purposes of the 183-day tax residency criterion.

Costa Rica

  • There is a proposal submitted for discussion and approval of a temporary increase in the top marginal rate from 25% to 30% to help combat the effects of the pandemic.

Cyprus

  • Effective March 1, 2019, Cyprus implemented a General Health System (GHS). The employee rate of contribution is 2.65% up to a maximum contribution of EUR 4,770. The employee General Health System (GHS) rate of contribution is temporarily reduced from 2.65% to 1.7% for a 3-month period: either March – May, or April – June, depending on employer implementation.
  • Filing deadline for salaried persons is extended to October 31, 2020.

Czechia

  • Deadline extension to August 18, 2020, with no interest or penalties assessed.
  • Pending presidential approval, an amendment has been passed to waive social security contributions for qualifying employers for the months of June, July, and August,

Denmark

  • Filing deadline extended to September 1, 2020.

Dominican Republic 

  • Filing deadline extended to July 29, 2020.

El Salvador

  • Filing deadline extended to June 30, 2020.

Estonia

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

Finland

  • The government has published a report detailing the plan to navigate the country out of the economic crisis. Among the measures, it is noted that tax increases will be targeted to wealthy and elderly taxpayers, as well as real estate.

France

  • 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.
  • The government intends to exempt small and medium companies in the wine sector from social security contributions.
  • France and Switzerland have signed an agreement with respect to frontier workers currently teleworking as a result of the pandemic. The agreement states that for purposes of applying the France/Switzerland income tax treaty, days spent working from home due to COVID-19 are deemed to be spent in the country where the worker would have normally carried out the work. The agreement is applicable from March 14 to May 31, 2020, with an automatic extension until the end of the following calendar month when travel restrictions are lifted, or the agreement is jointly terminated.

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.
  • A EUR 130 billion economic stimulus package has been announced. Among the measures impacting individuals are:
    • a payment of a one-time child bonus of EUR 300 per child eligible to the monthly child benefit.
    • a temporary increase in the single parents allowance from EUR 1,908 to EUR 4,000 for tax.
    • a guarantee that the combined social security contributions by employees and employers will not exceed 40% in the years 2020 and 2021.

Guatemala

  • Congress is currently analyzing an extraordinary tax contribution that would increase the top marginal rate from 7% to 10%.
  • Taxpayers can request interest-free payment plans for tax liabilities.

Guernsey

  • Employees working from home due to the COVID-19 pandemic are allowed to deduct additional expenses incurred on light and heat energy for an amount of GBP 3 per week.

Honduras

  • Granted an 8.5% credit for 2019 income tax for certain low and middle class taxpayers that filed their 2019 tax return by April 30, 2020.

Hong Kong

  • Payment deadline for salaries tax and personal assessment are automatically extended by three months.
  • The Inland Revenue Department has announced an exemption of tax for Anti-epidemic Fund assistance provided to individuals for the year of assessment 2019/2020.

Hungary

  • Temporary abolition of payroll taxes and social insurance contributions for taxpayers in defined affected sectors (hospitality, transportation, entertainment, etc.).

Iceland

  • 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.

Indonesia

  • Approved contributions to COVID-19 charities from March 1 – September 30, 2020 are fully tax deductible.

Isle of Man

  • Employers are able to reimburse up to GBP 8 per week tax-free for household expenses incurred by employees working from home

India

  • The filing deadline has been further extended to November 30, 2020 (previously extended to June 30, 2020.)
  • There is an optional reduction in both the employer and employee Provident Fund (EPF) contribution rate from 12% to 10% for the three month period of May, June and July 2020. This applies to all eligible employees, including international workers (IWs), however the reduction may not be allowed under existing employee contracts without consent.

Indonesia

  • Filing deadline extended to April 30, 2020.

Ireland

  • A Temporary Wage Subsidy Scheme has been announced, with employers refunded up to 85% of qualifying employee wages.

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.

Japan

  • Filing deadline extended to April 16, 2020.

Jordan

  • Filing deadline extension to June 30, 2020, with no interest or penalties assessed.

Kazakhstan

  • Allowances provided to healthcare employees working in pandemic activities are exempt from income tax and social security contributions.

Kenya

  • The Tax Laws Act 2020 was enacted on April 25, 2020 intended to relieve taxpayers of the effect of the COVID-19 pandemic. Annual resident personal relief has been increased from KES 16,896 to KES 28,800. The individual income tax rates for individuals have been revised, with the top marginal rate reduced from 30% to 25%.

Laos

  • 3-month (April, May, June 2020) exemption of income tax on salaries for individuals earning less than LAK 5,000,000 per month.

Luxembourg

  • Suspension of days limitation for Belgian, French, and German teleworkers to avoid taxation by country of residence.

Malaysia

  • A temporary reduction in the employee provident fund contribution for the period 1 April 2020 until 31 December 2020 – from 11% to 7%. Employees have a choice, however, to maintain contributions at 11%.
  • Employees who received benefits-in-kind in the form of technology from the employer for the purpose of working from home will be entitled to an income tax exemption of up to MYR 5,000.
  • Individuals with childcare expenses are entitled to a personal relief of MYR 3,000.
  • A special income tax relief of MYR 1,000 is available to individuals for expenses incurred for domestic tourism for years of assessment 2020 and 2021.

Malta

  • 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.
  • EUR 100 vouchers are to be given to Malta residents over the age of 16, eligible to be used at hotels, restaurants, shops, and bars.
  • Filing deadline extended to July 31, 2020.

Montenegro

  • 90-day payment deferral of individual income tax and social security contributions due in March, April, and May 2020.

Morocco

  • Effective March 23, the payment of social security is suspended.
  • A tax-free assistance allowance (up to MAD 2,000) will be granted to employees enrolled with the Caisse Nationale de Sécurité Sociale (CNSS)
  • A 3-month delay in payment of mortgage and consumer loans

Namibia

  • A one-time emergency income grant of NAD 750 to eligible Namibian citizens between the ages of 18 and 60.
  • Filing deadline extended to September 30, 2020.

Netherlands

  • 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.
  • Under the work-related expenses scheme, an employer may provide a tax-free payment of up to 1.7% of total salary (up to EUR 400,000). The percentage has been increased to 3%.
  • Mortgage payments may be suspended for up to 6 months, with the suspension beginning no later than July 1, 2020. Repayment plan requirements must be met in order for mortgage interest to continue to be deductible for owner-occupied dwellings.

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.
  • For the period of March 17 – September 17, 2020, up to NZD 15 per week may be provided tax-free to employees as a general work from home allowance.
  • Practical adjustments have been made to the requirements for reducing, suspending, or withdrawing contributions from KiwiSaver.

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.
  • Taxpayers may file a request to defer payment of tax liabilities in installments until September 30, 2020.

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.
  • Income tax exemption of assistance payments granted by employers, and special distributions from retirement accounts.
  • An additional 3% tax credit is provided to individuals with income below $100,000
  • Exemption from individual income tax (up to $4,000) for:
    1. Special payments for assistance by employers to employees who have not worked during the lock down period
    2. Special distributions from retirement plans and retirement accounts

Romania

  • 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.

San Marino

  • For tax year 2020, resident individuals may deduct up to EUR 300 for bar, restaurant, and entertainment expenses, and up to EUR 200 for sports activities and personal services.
  • The filing deadline is extended to August 31, 2020, and tax due on the tax return exceeding EUR 300 may be paid in three equal installments by August 31, September 30, and October 31.

Singapore

  • 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.

Senegal

  • Contributions to the COVID-19 Response Fund are fully tax deductible.

Slovenia

  • 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).

South Africa

  • Tax subsidy of ZAR 500/month for the next four months for private sector employees earning less than ZAR 6,500/month.
  • The finance minister announced a plan to increase tax revenue by R40 billion over the next four years. Details of the first round of tax hikes will be announced in February 2021.

Spain

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

Sri Lanka

  • The filing deadline has been extended to May 31, 2020.

Suriname

  • Filing deadline extended to June 15, 2020.

Switzerland

  • France and Switzerland have signed an agreement with respect to frontier workers currently teleworking as a result of the pandemic. The agreement states that for purposes of applying the France/Switzerland income tax treaty, days spent working from home due to COVID-19 are deemed to be spent in the country where the worker would have normally carried out the work. The agreement is applicable from March 14 to May 31, 2020, with an automatic extension until the end of the following calendar month when travel restrictions are lifted, or the agreement is jointly terminated. .

Taiwan

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

Thailand

  • Filing deadline extended to August 31, 2020.
  • Retroactive to January 1, 2020, the health insurance premium deduction has been increased from THB 15,000 to THB 25,000.
  • In an effort to increase confidence in the Thai capital market, the Ministry of Finance has announced an initiative to provide personal tax relief up to THB 200,000 for individuals who invest in a Super Savings Fund from April 1 – June 30, 2020. In order to qualify the fund must have invested at least 65% of its net assets in shares listed on the Stock Exchange of Thailand and the individual must hold the investment for at least 10 years (except for disability or death).
  • The government will grant a tax exemption to certain healthcare and other frontline workers who receive special compensation from the Ministry of Public Health.
  • In an effort to promote social distancing, Thailand has mandated online filing and payment of taxes, with limited exceptions, and all fees for electronic payments are waived through December 31, 2020.

Tunisia 

  • 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.

Ukraine 

  • Additional bonus or hardship payments (up to 3 times the monthly minimum salary) to medical staff between May 1 – June 30, 2020 are exempt from income tax.
  • Unemployment benefits received after April 2, 2020 are exempt from income tax and the military levy

United Kingdom

  • 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.
  • Reimbursed home office equipment and expenditures to enable home working due to COVID-19 are exempt from income tax and national insurance contributions.

United States:

  • The IRS has issued Revenue Procedure 2020-20, which notes that travel restrictions due to COVID-19 may have affected the travel plans of foreign individuals who are present in the United States and intended to leave but were unable to do so. Therefore, the IRS is providing the relief (under qualifying circumstances) in the form of up to 60 consecutive calendar days of US presence will not be counted for purposes of:
    1. The US residence test (i.e. the substantial presence test) of IRC section 7701(b)(3); and
    2. Determining eligibility for the exception under the Dependent Personal Services article of many US income tax treaties for non-residents who are physically present in the United States for not more than 183 days in any twelve-month period that begins or ends in the relevant taxable year.
  • Relief is already provided in both of the above areas for medical conditions. Revenue Procedure 2020-20 establishes an exception for travel restrictions due to COVID-19, referred to as the COVID-19 Medical Condition Travel Exception, and the requirements to claim the exemption.
  • The IRS has updated the list of countries for which qualified individuals can exclude a limited amount of foreign earned income from US taxation and claim an exclusion or deduction for certain foreign housing costs, known as the US Foreign Earned Income Exclusion. The Exclusion under IRC §911 applies if either the foreign residence test or the physical presence test is met for specified periods of time. These time requirements can be waived under section 911(d)(4) of the due to adverse conditions such as war, civil unrest, or similar conditions, that prevented the normal conduct of business.
    • Revenue Procedure 2020-27 notes that COVID-19 is an adverse condition that prevents the normal conduct of business in 2019 and 2020 as follows:
      1. In the People’s Republic of China, excluding the Special Administrative Regions of Hong Kong and Macau (China), as of 1 December 2019; and
      2. globally, effective as of 1 February 2020.
  • The period covered by Revenue Procedure 2020-27 will end on 15 July 2020 (unless further extended). An individual who left China after 1 December 2019, or another foreign country after 1 February 2020, and on or before 15 July 2020, would be treated as a qualified individual with respect to the period during which that individual was present in, or was a bona fide resident of, that foreign country if the individual establishes a reasonable expectation that he or she would have met the requirements of IRC section 911(d)(1) but for COVID-19.
  • The Internal Revenue Service has published a factsheet regarding economic impact payments.
  • Lawmakers are discussing proposals that would provide tax credits of $4,000 per adult and $500 per child for vacations within the U.S. from December 31, 2019 to January 1, 2022, to help stimulate local economies and industries.
  • The US Treasury Department and Internal Revenue Service confirmed that there will be no further payment extension past July 15, 2020. Taxpayers may file for a filing extension to October 15, 2020, but interest and penalties will apply for any payments made after July 15.

Uruguay

  • 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).

Uzbekistan

  • The amount of tax-free benefits that can be provided by the employer is increased from 4.22 to 7.5 times the monthly minimum salary.

Vietnam

  • Payment deadline for the 2019 personal income tax return is extended to December 31, 2020.


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