Tax Relief for Companies and Individuals

Value Added Tax, Tax Return, Tax Deferral, Interest Rate

In order to cushion the economic impacts of the spread of the coronavirus, the Federal Council decided on 20 March 2020, among other things, to provide liquidity aid in tax matters.

Direct Taxes

Several cantons have reacted to the extraordinary situation by extending the deadline for filing tax returns for natural persons. Appenzell Ausserrhoden, Basel-Stadt, St. Gallen, Valais and Zurich have granted an extension until 31 May 2020. Fribourg and Schaffhausen until 30 June 2020. The cantons of Solothurn (extension until 31 July) and Berne (extension until 15 September) are particularly generous. Other cantons are also considering possible extensions.

The provisional tax bill for the current calendar year 2020 is issued based on figures from the previous year. Since the current year will end in a highly uncertain manner, you may request a lower tax bill. In various cantons, late payment interest will also be reduced to 0% (applies also for Direct Federal Tax from 01 March 2020 to 31 December 2020) and/or debt collection will be waived for the time being. This makes it possible to postpone payment of the provisional invoice until the actual tax burden can be estimated more reliably.

In the case of definitive and provisional tax bills from previous years, a request for payment by instalments can be submitted if necessary.

Please note that in most cantons the tax authorities have closed the visitor traffic for the time being. Taxpayers and their legal representatives can contact the tax authorities in writing (by e-mail, post) or by telephone.

Value Added Tax

Businesses shall have the possibility to extend payment terms without being liable to late payment interest. For this reason, the default interest rate for VAT, customs duties, excise taxes and incentive taxes will be reduced from 4.0 to 0.0 percent in the period from 21 March 2020 to 31 December 2020.

According to general practice, the Federal Tax Administration (FTA) grants taxable persons an extension of the filing and payment deadline by three months informally and without any reasons being necessary by submitting a respective online form.

In addition to extending the deadline, it is also possible to apply online for a payment plan (payment agreement with instalments) if the payment causes significant hardship.

We advise to make use of these possibilities to avoid an assessment according to best judgement and fines for failing to submit VAT returns on time or the FTA seeking to enforce its claim (after the current suspension of debt enforcement proceedings effective until 4 April 2020) in the event of temporary payment difficulties. If required, we will be pleased to support you in applying for further extensions of the filing and payment deadlines or requesting a payment plan for outstanding VAT liabilities.

The FTA generally advises to use the e-mail channel first in the event of an overload of the telephone lines, as this type of communication can be handled more quickly. Ruling requests can still be submitted to the FTA, however a response may take longer than the usual 30 days.

 

March 2020 | Authors: Thomas Linder, Christoph Rechsteiner, Fredrik Dekker, Raphael Schilliger

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