The Tax Department issued on the 22nd June 2020 a new circular, according to which the special allowances of unemployment, under partial and complete suspension, sick leave, child care and self-employed, again under partial and complete suspension, will not be taxed and thus will not be included in the 2020 individual Tax Return.
As these allowances have only been granted for humanitanian reasons due to the coronavirus pandemic and are treated as financial support, they cannot be considered as part of a person's taxable income.
Furthermore, it is a fact that businesess which applied for partial or complete suspension, must have suffered a decrease in their turnover of more than 25% (compared to last year's same period) and are bound by law (for a specific period of time) that they will not terminate the employment of any of their empoyees. In any case the employees who have been put under these special schemes will bear no responsibility if the above criteria have not been met by the related business.
Additionnaly, these allowances will not be considered as any kind of Government subsidy towards the business and therefore the employers will not include them in their annual Employer's Tax Return T.D.7.