Tax relief for partners: what governments are doing and what questions to ask
Has your country implemented emergency measures to benefit the hospitality, travel and tourism industries?
Governments around the world have been implementing emergency tax relief measures to help individuals and businesses deal with the impact of Coronavirus (COVID-19). Whether you run a large hotel or rent out a single bedroom, it can pay to know your options.
A valuable free resource
The EY Tax COVID-19 Response Tracker gathers tax-relief information from 120+ countries. Download the PDF overview to learn what type of relief measures are happening right now in your country:
- Personal, VAT and business tax freezes and exemptions
- Economic measures being enacted to help businesses recover
- Links to official government resources and programs
- Contact information to help you apply for emergency aid
This resource is being continually expanded and updated, so it may be beneficial to check back and download the most up-to-date version of this document on a regular basis.
Questions to ask your financial adviser
Does a specific tax measure apply to your situation? We’ve collected questions under three broad categories that you may want to ask your local tax consultant or adviser to help determine whether you are eligible for a specific economic incentive, deferred payment or filing extension.
In addition to favourable loans and direct payments to individual citizens, many governments are providing tax incentives to encourage businesses to retain their employees. One specific measure worth considering is a tax credit available in many countries for wages paid to employees. These credits or grants generally require a business to continue to pay employees despite their inability to work.
What questions should I ask when evaluating an economic incentive?
- Does my business fit into any of the specific industries covered?
- What are the specific terms and conditions of a government-backed loan?
- What specific elements or qualifying factors must my business meet to claim an employee wage tax credit?
- Do any of the modified tax rules result in reduced taxable income for my business in a prior year?
- Are there specific actions I must take now to claim a financial benefit on a future tax return?
Some countries are permitting businesses and individuals to temporarily defer tax payments to help them maintain a positive cash flow. This may include the deferral of estimated tax payments or prior-year income tax payments. Large corporations, in particular, may be able to benefit from deferred payroll or employment-related tax payments.
What important questions should I ask about deferred payments?
- What specific payments can I defer?
- When will a deferred payment become due?
- Can I spread a deferred payment across multiple periods - weeks, months or years?
- Will there be any interest, penalty or surcharge associated with a deferred payment?
Many countries have extended their existing filing due dates for business and individual tax returns. In most cases, these extensions have been automatically enacted.
What questions should I ask to ensure an extension applies to me?
- Do I need to file any type of extension form?
- Does the extension also automatically extend my payment requirement? (See ‘deferred payments’ above)
- Do I need to attach specific documentation when filing my return?
- Does the extension change the method of filing my return (e.g., paper or electronic filing)?
Resources for US-based businesses
Stay informed about tax-related changes in the United States by following updates on the federal, state and local levels:
- Federal: The Internal Revenue Service provides official information about federal tax-related extensions and grants.
- State: The Tax Foundation, a nonprofit think tank, has created a state-by-state tracker of COVID-19 related measures that are being enacted by state governments.
- Local: Consult your local municipality or county to learn about any local tax-related relief programs. One particularly important detail to consider: Some counties and municipalities may not provide deferred payments for property taxes.
- Free newsletter: If you would like to receive regular updates about the rapidly changing tax situation in the US, consider subscribing to the free EY Tax Alert email service.
This article is not intended to be tax advice. Booking.com does not endorse any of the services listed here and provides these resources for information purposes only.
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