At present, the COVID-19 is raging all over the world, which will seriously impact the safety of human beings and the development of economy and society. While introducing active anti measures, Luxemburg also launched a stronger tax support bill.
The bill to extend the declaration period introduced by Luxembourg includes the following aspects:
Direct tax: for individuals, the deadline for declaration of income tax, municipal business tax and net asset tax is extended from March 31, 2020 to June 30, 2020; for enterprises, the deadline for declaration of income tax, municipal business tax and net asset tax is extended from May 31, 2020 to June 30, 2020.
At present, the tax authorities can extend the declaration period to June 30, but this year, the tax authorities may extend the declaration period of 2019 tax returns to December 31, 2020.
In addition, the deadline for requiring separate taxation of married taxpayers is extended from March 31, 2020 to June 30, 2020. Since 2018, married taxpayers are likely to choose separate taxation; if they want to opt for joint taxation, the same extension applies.
Finally, the deadline for resident taxpayers who receive interest from the payment institutions established by EU and EEC members will also be extended from March 31, 2020 to June 30, 2020 if they apply for a flat tax rate of 20%.
Tax disputes: if there is any objection to the tax assessment, it must normally be submitted within three months. This policy is extended to June 30, 2020 during the epidemic period. This extension also applies to appeals against other decisions.
Limitation of action: the limitation of action is generally 5 years. However, the Act provides that all tax claims due before December 31, 2020 will be extended to December 31, 2020. The same extension applies to the search for tax claims related to taxes, tariffs, other policies, and bilateral and multilateral tax agreements.
Delayed declaration: the deadline for submission of corporate income tax returns will be extended from May 31 to June 30; the deadline for individual income tax returns will be extended to June 30, 2020.
Advance tax: cancel the first quarter and second quarter prepayment of income tax and municipal business tax in 2020.
Deferred tax payment: extend the payment period of enterprise income tax, municipal business tax and net value tax payable after February 29, 2020 by four months, and no overdue interest is required.
Subsidy policy for small and medium-sized enterprises: during the epidemic period, a number of enterprises will receive tax-free financial subsidies, aiming to help enterprises enhance liquidity and tide over the crisis.
Under the incentives, companies with 10-20 employees will receive a one-time tax-free subsidy of 12500 euros (US $13660), companies with less than 10 people will receive 5000 euros, and individual operators will receive a total of 2500 subsidies.
In addition, the tax-free grant will also benefit the field of Journalism: professional journalists who sign indefinite contracts with publishers and are responsible for editing and publishing content will receive a subsidy of 5000 euros per person, with a maximum subsidy of 200000 euros for a single enterprise.
（Resource Document-issuing agency：Jiangsu Provincial Tax Service, State Taxation Administration、Published date：2020-05-26 09:27 Preferential Tax Policies in Luxembourg During The COVID-19 period、Wolters Kluwer Global Daily Tax News Published date：2020-05-25 Luxembourg To Provide COVID-19 Tax-Free Grants To SMEs）
