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 the 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 info 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 info 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 determine whether you’re eligible for a specific economic incentive, deferred payment, or filing extension.
In addition to favorable 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 paying 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 does my business have to 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 previous year?
- Are there specific actions I have to 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 income tax payments from the previous year. 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 be 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 dates for business and individual tax returns. In most cases, these extensions have been automatically enacted.
What questions should I ask to make sure 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 info about federal tax-related extensions and grants.
- State: The Tax Foundation, a non-profit think tank, has created a state-by-state tracker of COVID-19 related measures that state governments are enacting.
- 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: 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 informational purposes only.
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