COVID-19 – Companies, tax measures to free up cash flow!

March 26, 2020

The whole economy is going to be permanently impacted by the health crisis that we are currently experiencing. In order to handle this unprecedented situation, the government has put in place a genuine support plan for companies. In addition to the relief measures for social security charges, a simplified procedure for partial unemployment or even the widespread arrangements for bank-based corporate financing guaranteed by the State, exceptional tax measures may allow you to give a boost to your cash flow!

Which tax measures can be implemented to generate cash flow?

  • Deferral of tax due dates

The tax due dates for March may be deferred for 3 months without justification and without penalty (companies may block the SEPA direct debits at their bank or request a refund, without justification, if the transfer has already taken place).

Depending on the length of the crisis, these measures may be extended to subsequent due dates but, at this stage, the authorized deferral of payments only applies to March. In any event, thereafter, a payment schedule may be contemplated and negotiated with the Tax authorities.

  • Requests for discretionary relief

When deferred payment is not sufficient given the company’s difficulties, it is possible to obtain rebates on taxes, penalties or late-payment on outstanding tax debts by producing tangible evidence of the company’s financial situation.

Deferral, rebates, for which taxes?
(CIT, payroll tax, CFE, property tax, CVAE, TASCOM, tax on offices, local tax on signs and outdoor advertising, household waste removal tax).

NB: these exceptional measures do not apply to taxes that companies collect from third parties: VAT, excise duties, and withholding taxes remain payable on their normal due dates.

  • The anticipated mobilization of tax credits

The Tax authorities have received instructions to speed up the repayment of credits payable to companies.

Companies entitled to one or more tax credits refundable in 2020 may claim as of now, without waiting for the lodging of the tax return in May, the refund of the available credit (after set off against the CIT payable for 2019, where applicable).

This arrangement applies to all tax credits refundable in 2020, notably CICE and CIR/CII and those regarding certain sectors in difficulty (for example tax credit for production expenses for cinematic work, tax credit production expenses for audiovisual works, tax for production expenses for foreign films and audiovisual works, tax credit in favor of live musical or variety show companies, tax credit for production expenses for phonographic works, tax credit for the creation of video games).

Refunds of VAT credits are also included.

In order to mitigate the significant repercussions of this difficult period on everyone’s business activity, we are available to examine, without delay, the measures which might enable your company to free up cash flow to deal with the crisis.

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