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)