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COVID-19: Restricting Relief to Taxpayers – A Matter of (Tax) Justice Gone Wrong?

Blogpost on COVID-19 and taxation by Jur. Dr. Yvette Lind, Assistant Professor in Tax Law at Copenhagen Business School.

At present, states have begun to focus on how to not only financially survive the pandemic but also how to financially recover from it over time. A broad variety of relief packages and bailouts have been introduced, and with this the notion of justice becomes more and more sought for.

Who should receive relief? How should financial suffering be measured and what losses are to be counted for? Are some more deserving of relief than others?

Interestingly enough, states seem to (intentionally or unintentionally) have taken this as an opportunity to reaffirm their own political agenda and take on societal justice as it becomes apparent that already existing rifts between the poor and the affluent are reinforced in times where the direct opposite is desperately sought for.

Declared Income Matters

Initially, financial relief covering employee’s loss of income is problematic as most states calculate this relief on the individual´s declared income.[1] Those who work cash-in-hand alternatively have unreported employments, which would be the case of many immigrants or refugees due to the hardship of societies to satisfactory integrate these into domestic labor markets, are excluded from such relief.

In the United States,[2] debate arose when it became apparent that some students and adult dependants were excluded from the Corona stimulus payments. The same applied to immigrants as many of them were not included in the Unites State´s coronavirus relief bill. Societal groups that are particularly vulnerable during the crisis are as a result left out of critical support.

Further, Denmark (quickly followed by Poland, France and Italy) recently announced, as the first state in the world, that it would not bailout companies registered in offshore tax havens nor companies who pay out dividends or who buy back their own stock during the ongoing crisis (2020-2021).[3] This move should not come as a complete surprise considering the efforts to combat tax avoidance and tax evasion that have taken place at both international- and EU level over the past years.[4]

State Resources to Everyone?

One could argue that companies not paying taxes in said state should not qualify for financial relief stemming from state resources. Additionally, one may argue that companies who can afford buying back their own shares or paying out dividends are not in need of the same financial support as smaller enterprises. On the other hand, it may also be argued that this results in an inequal treatment of companies and that it is not up to states to pass on moral judgements or to force companies back to these state’s tax jurisdictions, especially in times of need.

Although, we should also ask ourselves if states can afford to bail out such companies as the survival of financial systems will be put to the ultimate test during this crisis.

The example of states being willing to exclude so called tax exiles was clearly illustrated through the case of Richard Branson and Virgin airlines.[5] Branson publicly pleaded to the British Government for financial relief, to the extent that he offered to place his luxury island resort as collateral for a state loan. This action faced harsh criticism as Branson is seeking financial aid from a state, he himself has chosen to leave and, as a result, have not paid taxes to.

To summarize, these examples tells us that states base, explicitly and inexplicitly, their relief measures on the notion of taxpaying. Possibly as a matter of justice but also possibly as a survival mechanism in order to incentivise future tax compliance and the generation of well-needed tax revenues. Companies registered in offshore tax havens are denied financial aid based on them not contributing to state resources through tax payments, and the same could also be argued when students, employees who have not declared an income (due to cash-in hand payments or unreported employments) and immigrants are denied financial relief.

However, despite the basis for both cases being the same this does not result in a coherent take on justice. The public opinion at present time may consider it to be just that companies who avoid taxation are left out of state aid, yet could the same be argued about vulnerable groups such as students, unreported workers, and immigrants?

Best regards,

Jur. Dr. Yvette Lind, Assistant Professor in Tax Law at Copenhagen Business School.

This is a series of updates regarding the Coronavirus from Human Rights Experts – read more here

[1] OECD Centre for Tax Policy and Administration, “Tax and Fiscal Policy in Response to the Coronavirus Crisis: Strengthening Confidence and Resilience, 18 April 2020.

[2] The U.S. Families First Coronavirus Response Act, Public Law 116–127 18 March 2020. https://www.congress.gov/116/plaws/publ127/PLAW-116publ127.pdf

[3] Oliver Batchelor, ”Enighed i Folketinget: Forlænger og udvider hjælpepakker med ekstra 100 milliarder”, 18 April 2020, https://www.dr.dk/nyheder/politik/enighed-i-folketinget-forlaenger-og-udvider-hjaelpepakker-med-ekstra-100-milliarder

[4] More information on the OEDCs BEPS (Base Erosion and Profit Shifting) project is accessible at: https://www.oecd.org/tax/beps/beps-actions/ and

More information on the EUs Ani Tax Avoidance Package is accessible at:


[5] Rupert Neate, “Branson to mortgage Caribbean island as he seeks Virgin bailout, 20 April 2020,


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