In order to help businesses deal with some of the economic consequences of the Covid-19 outbreak, governments have taken economic and fiscal measures to help companies manage their cash flow. And for some businesses these measures may be the difference between staying afloat or closing down.
We aim to update this as frequently as possible when these measures evolve as the information comes in.
Value Added Tax
- Postponement of VAT payments for the next 3 months, for companies with annual sales amounting less than USD 11,5 million, enabling payments in 12 monthly installments with no penalty interests nor fines.
Corporate Income Tax
- Payment of income tax refunds will be done in April 2020 (instead of May 2020).
- Postponement of monthly income tax advance payments for 3 months.
- All company's expenses to face the health contingency will be accepted as a deductible tax expense.
- Postponement until July 2020 of the annual corporate income tax payment for small/medium size companies (ie., annual sales not exceeding USD 2,5 million).The submission of the annual income statement must still be done in April 2020.
- Extension of deadlines to submit auxiliary income tax statements.
Social Security Contributions or Payroll Tax
- Employees that must remain in their homes and can not do home office work, will (i) mantain their employment; and (ii) social security obligations must still be paid by the company. However, the salary may be temporarily suspensed, while - in turn -the employee will receive funds from the unemployment insurance.
Other relief measures
- Transitory reduction of stamp tax to 0% ratevfor all loans granted during the next 6 months.
- Postponement of real property tax installment originally due in April 2020. This measure is meant to benefit small companies and low-income individuals.
- Flexibility to pay overdue taxes in installments to be agreed with National Treasury. This measure is focused in small companies and low-income individuals.