The Impact of the Coronavirus Pandemic Crisis on the VAT Framework

Article by: Korina Yiallourou – First published on KluwerTaxBlog

In these unprecedented times of the Coronavirus pandemic, governments all around the world are striving to sustain their health systems while managing, as far as possible, the economic damages caused by the pandemic crisis. One of the most compelling economic objectives of every government during this crisis is to keep businesses in operation while preserving, at the same time, employment levels.

Such a new economic reality has forced most countries to deploy unprecedented support packages for businesses. Although the implementation of those support packages was a necessary step for the survival of many businesses, one cannot oversee the potential adverse effects that will arise from their enactment, which may have manifold effects also on the VAT framework.

That being said, this contribution focuses on the VAT implications arising from the decision of governments to defer VAT payments as well as to introduce financial assistance measures based on a business’ decline in turnover.

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