The impact of the global pandemic on every aspect of our lives, mindsets, and mental health is probably as severe, dangerous, and long-lasting as on the global market and economy. Lockdowns and movement restrictions affected some industries more than others, but the fact is the whole world is feeling the financial consequences. The depth of such sudden cutoffs in economic activities, combined with an interruption in the supply chains is yet to show us the new reality. Especially having in mind the COVID-19 crisis is still not over. But the processes and legal activities are not stopped, so let’s see what this means in terms of taxation.
Diving into the unknown
The situation with COVID-19 was unprecedented and possible solutions and instructions have been created on the go. Governments all over the world have experienced the same or similar issues – businesses closing, people losing their jobs and financial stability. At the same time, everyone needed more products than usual, regarding disease prevention equipment such as face masks, gloves, and sanitation products. The approaches were different, but it seems no one has yet found a viable solution for their citizens. In many countries, governments provided temporary relief for loan and mortgage rates during the crisis, which was certainly a smart move.
But the thing is, with the globalization level and interconnectedness of economies with the rise of e-commerce, the solution needs to be on a global level as well. Taxation budgets have played possibly the most important role ever, as the money was used for obtaining medical equipment and other necessities for the most endangered groups of people. Isolation brought another tax-related issue, which was working from home or in another place of residence. So what about the deadlines and total sums, especially for people who found themselves locked in another country? For both corporate and individual tax laws, there is a great example coming from Ireland, where the presence is disregarded if it is a direct result from traveling restrictions.
Find the right information
The most important thing for business owners, as well as for individuals is to combat the sea of misinformation and find the official ones. It is highly recommended to personally visit the institution where you usually submit taxes, and ask about your options, of course with all the safety and distance measures. Try to be as specific as possible, and inquire about tax reliefs and government grants to apply for. As a regular tax-payer, you may be entitled to aids, especially if you have a business in the most affected industry branches, such as entertainment and hospitality.
Many countries have extended a deadline for both tax payments and filing income tax, so find out the exact date and if there are any conditions. The altered structural organization can influence the format of your tax depreciation report and many other necessary documents, so bear that in mind. A new dynamic is going to be created, so you need to stay on top of changes by staying well-informed and taking on to every opportunity you can.
Deductions and aids
When it comes to trying to get back on your feet, whether as an individual or a company, you’ll need both guidance we’ve mentioned, along with some kind of financial aid. Grants from the government can be awarded for the recovery of jobs and for operational losses. Furthermore, various targeted credits and tax incentives have been announced or enforced in various countries. When talking about budget spending on health prevention and other sanitary measures, there will be deductions on those as well.
Different standards and criteria will be imposed, or have already been depending on the country’s economic state and the number of people infected with COVID-19. Some relief measures must have been announced, but it will be an extremely different case in the US and Sweden, for example. Many acts are still only proposals, so we are again emphasizing the importance of staying informed!
It seems that the world has not yet fully recovered from the Wall Street crisis when the pandemic crushed the economy once again. Both present and future are full of uncertainties and it is stressful. In times like these, we must unite and combat the common enemy in cooperation, it is the only solution. Bear in mind that most developing countries are relying on tax-payers money in terms of health and education institutions. The challenges we are collectively facing are demanding everyone doing the best they can in order for global trade to recover as soon as possible.