Governments could consider these potential tax measures as temporary steps to prop up businesses and individuals in the wake of the coronavirus outbreak, which has sharply decreased economic activity around the globe, according to the OECD. The organization published the tax measures on Saturday as part of a larger platform that also included suggestions for how countries' employment policies and health systems could respond to the pandemic.
"Beyond the immediate health policy response, the world needs decisive and ambitious actions to mitigate the economic downturn and protect the most vulnerable," Angel Gurría, the OECD's secretary-general, said in a statement.
From a tax standpoint, the OECD suggested responding to the economic situation in part by giving those affected by COVID-19 extra time to file returns and make payments. In addition, governments could use the tax system to increase support for workers, including by providing broader access to unemployment benefits, the OECD said.
The organization noted that its suggestions — which are from the Forum on Tax Administration and the Center for Tax Policy and Administration — are "intended to assist administrations globally in their consideration of appropriate measures in their own national contexts to help taxpayers during this difficult period."
To help businesses, the OECD suggested waiving or deferring employer social security contributions and payroll-related taxes. These steps could immediately reduce labor costs and therefore help hard-hit sectors that have been part of a shutdown or have suffered a significant economic hit, the organization said.
For employees in health care and other emergency-related sectors, the OECD suggested that governments "reward people for working extra hours and in potentially dangerous conditions" by making income related to overtime exempt from income tax and social security contributions.
As for imports of food, medicine and capital goods, the agency recommended deferring payments related to the value-added tax and customs or excise duties while "avoiding abuse through careful administration."
The OECD also provided more general suggestions, including asking tax administrations to consider holding off on audits during the crisis — other than where fraud is involved — in addition to creating dedicated hotlines and extending the hours of their call centers.
Meanwhile, the OECD said last week that it has suspended in-person meetings for its project to overhaul the international tax system but emphasized it remained committed to finding an agreement by the end of 2020 despite the coronavirus pandemic.
The organization's suggestions in response to the pandemic come as countries around the world have moved to provide tax relief as the deadly coronavirus grinds businesses to a halt. Such measures include steps to adjust income, consumption and corporate tax systems as a way to support companies until the worst passes.
In the U.S., Treasury Secretary Steven Mnuchin announced Friday that the 2019 tax return filing deadline for individuals and businesses will be moved from April 15 to July 15 in light of the coronavirus outbreak.
That same day, the Internal Revenue Service said it was immediately implementing a recently enacted law that provides a dollar-for-dollar tax offset against payroll taxes to businesses with fewer than 500 employees that provide paid leave due to COVID-19.
A spokesman for the OECD declined to comment beyond the suggestions on Sunday.
--Additional reporting by Alex M. Parker, Joshua Rosenberg and Amy Lee Rosen. Editing by Christine Chun.
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