Vestager, addressing the economic response to the pandemic at a news conference in Brussels, said countries don't need to seek prior approval from the European Commission to offer relief from value-added tax and corporation tax payments.
"There are many ways that governments can help without needing state aid approval," the official said at the event, which was livestreamed. "They can give all businesses throughout the economy a breathing space to help them cope, providing wage subsidies, suspending corporate tax payments or the payment of VAT."
The European Union usually has strict rules governing state aid, which can take the form of cash remittances or preferential tax treatment from a government to a business that isn't available to others in the industry.
Commission President Ursula von der Leyen, who also spoke at the conference, said that EU member countries "should feel comfortable to take any measures they need" to support their economies and that the commission would provide "maximum flexibility" on the application of state aid and fiscal rules.
A number of EU countries have already announced tax holidays for companies adversely affected by coronavirus, also known as COVID-19. Italy, which has been hit hardest, was the first to do so at the beginning of March, announcing tax credits for companies that report a 25% drop in revenue, as well as a series of tax cuts. The country has also closed its tax administration until further notice, suspending collection of VAT and other tax payments for businesses.
The largest economy, Germany, has also introduced temporary tax measures including the lowering of VAT rates. France has suspended collection of tax payments for March.
Vestager said that the EU's state aid rules can be flexible in exceptional circumstances. The exceptions built into the treaty law of the bloc allow for actions that would otherwise violate the rules to remedy serious crises in individual countries or in the union as a whole economy.
The legal framework will be based on the one used for government support in 2008 during the global financial crisis, according to Vestager.
Citing the commission's quick approval of compensation offered to companies by the Danish government, the competition commissioner said the commission would work "just as fast with any other member state that wants to introduce schemes that compensate businesses for the damages which the COVID-19 outbreak causes."
--Editing by Robert Rudinger.
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