1. A reduction of the usual wages in the event of a fall in turnover
Substantial interest holders often carry out work themselves through a company and must at least pay tax on a legally determined appropriate salary, namely the usual wages. Even if the company has less turnover or no turnover. The substantial interest holder may assume a lower usual wage in 2020. If the turnover of a company falls as a result of the corona crisis, the substantial interest holder may reduce the usual wages in the same proportion.
2. A relaxation of the hour criterion
Entrepreneurs who are liable to income tax can, under certain conditions, benefit from various entrepreneurial facilities, such as the self-employed person's allowance, the employee's allowance and the old-age reserve when the hour criterion is met. The hour criterion is met when the entrepreneur spends at least 1225 hours per calendar year on activities for his company. In the period from March 1, 2020 to May 31, 2020, the entrepreneur may assume for the income tax return that the hours criterion has been met and that he has spent at least 24 hours a week with the company, can continue to make certain deductions.
3. An increase in the free space in the work-related costs scheme
Employers can provide allowances and benefits in kind to their employees through the free space, without this being taxed. As of January 1, 2020, the free space is 1.7% for the first € 400,000 of the wage bill per employer. The free space for the first € 400,000 of the wage bill per employer will be increased once and temporarily to 3% for the year 2020.
4. Tax corona reserve
Under current legislation, companies that are subject to corporate income tax may offset a loss against the profit of the previous year. Loss relief can improve the liquidity position of companies. However, such settlement will not take place until the beginning of 2021. Therefore, companies will be able to charge to the profit for 2019 up to the expected loss for the year 2020 related to the corona crisis as a tax corona reserve. The fiscal corona reserve is a maximum of the fiscal profit for 2019 without taking this reserve into account.
5. Postponement of the entry into force of the bill excessive borrowing from the own company.
The planned entry into force of the Bill on Excessive Borrowing with Own Companies will take effect from 2022. The bill makes it possible to tax the DG's debts to its own company that exceed €500,000. The entry into force of this bill is postponed by 1 year.
6. Payment break for mortgage obligations
Lenders may offer their customers who are temporarily unable to meet their payment obligations as a result of the corona crisis the opportunity to take a break for up to six months. During that period, customers will have to pay no or less interest or repayments on their mortgages. These overdue cancellations must still be paid at any time. The retention of the right to the tax deduction of interest and costs for home acquisition debts depends on the recovery of the deferred repayments.
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NAZALI TAX & LEGAL |