COVID-19 Tax Credit & Deferral

The Tax Credit and Tax Deferral Employment Retention Programme has been expanded to include all qualifying VAT registered businesses with a turnover in excess of 100k and hotels to provide payroll support, and encourage employee retention. (special conditions may apply)

ELIGIBILITY REQUIREMENTS:

To be eligible, enterprises would be required to:

  • Be a current business license holder and VAT registrant
  • Be in good standing in VAT or BL payments as at June 2020 (not including BL due for current 2020 cycle)
  • Commit to retaining 80 percent of staff levels as at February 2020 levels, though to October, 2020;
  • Make application for concession and provide evidence of February 2020 employment levels and payroll
  • Commit to utilization of the tax grant solely for purposes of payroll requirements. This is to cover non-executive pay only, and no bonuses or payments to directors, proprietors or similar job title level.

This concession is NOT available to businesses in the following sectors:

  • Food stores and food wholesalers
  • Pharmacies and related wholesalers
  • Gaming Houses
  • Banks and Financial Entities
  • Insurance Companies
  • Regulated Telecommunications Sector

PROVIDE PAYROLL COST:

This will determine the amount for Approved Tax Relief (ATR) for the months June, July & August 2020, the qualifying period (QP). To accomplish this the taxpayer must provide:

  • A copy of their non- management payrolls for the month of February, 2020.
  • A copy of banking information in support of their payroll cost.
  • A copy of NIB returns for that month.
  • A payroll register showing the breakdown by employee categories.
  • A declaration that they will retain 80% of the workforce through to 31st October, 2020. (Declaration included with the application form)

The relief provisions will apply as follows:

 PHASE II APPROVED TAX RELIEF (ATR)

NO. OF ELIGIBLE NON-EXECUTIVE STAFF MAXIMUM CREDIT THAT WILL BE ALLOWED MAXIMUM DEFERRAL THAT WILL BE ALLOWED

MAXIMUM

3 MONTH VALUE

 1 to 25 $150,000 $150,000 $300,000
26 to 300 $300,000 $300,000 $600,000
301 to 600 $600,000 $600,000 $1,200,000
600 to 1500 $1,500,000 $1,500.000 $3,000,000
1501 and over (assuming a max of 2500 employees) $2,500,000 $2,500,000 $5,000,000

 

QUALIFYING BUSINESSES WILL BE ALLOWED TO:

  • Apply the tax credit as a non- reimbursable credit (NTC) to outstanding taxes.
  • Apply the tax deferral approved to any unpaid taxes or taxes in excess of the NTC.
  • Apply the full amount of the NTC firstly to any outstanding Business License Fees where applicable and the remaining portion to any unpaid VAT balances,
  • Pay the deferred tax over a twelve month period in equal installments starting January, 2021 free of interest or fees.
  • Where there are no Business License Fees outstanding, the full amount of the NTC will be applied to the VAT outstanding balance.
  • Use any unapplied remaining balance of the NTC, to offset any future VAT liability that may materialize in the qualifying period cumulatively.
  • All NTC allowed must be utilized against outstanding taxes arising through to 31st December, 2020.
  • Unused credits will no longer be available after 31st December, 2020

BUSINESS CONTINUITY:

  • The taxpayer will conduct business in the usual manner and withhold VAT payable (output VAT less Input VAT) to the limit of the available NTC.
  • Taxpayers will be required to upload with their filing in the usual manner schedules and copies of all Input and Output VAT supporting documents.
  • In rare cases a taxpayer might find themselves in a receivable position the amount so available will be utilized against future tax liability but will not be available as a cash refund.

DEPARTMENT OF INLAND REVENUE

  • Will acknowledge receipt of application within 24 hours
  • Will advise of approval of application and the value of any ATR within 48 hours of receipt of the relevant payroll cost and supporting documentation.
  • Will reverse finance charges arising during the program and deferral periods.

CLICK HERE TO APPLY  (http://atlas.revenue.gov.bs)

Click here to download a PDF version of the Guide