Jennifer Shearer and Alexander Ludwig Reiter of the EY International Tax & Transaction Services group help PE funds and portfolio companies understand and manage the tax implications of recent coronavirus stimulus packages. Visit ey.com to read our latest private equity perspectives. COVID-19 stimulus legislation in the US and Europe is designed to ease the strain on businesses with particular focus on small and medium sized companies, keep people employed, increase liquidity and provide access to much-needed capital. Loan programs, cash tax defer programs, tax incentives and compensation for reduced working hours are all being deployed. Key focus areas for private equity are as follows: Immediate: focus on liquidity and establishing task forces to triage needs across the portfolio. Short-term: use a coordinated approach to evaluate need and eligibility for assistance. There is a lot of detail and nuance to consider when evaluating these programs, as loans have restrictions and some PE complexes may not qualify depending on how they are structured. Differences in policy adoption across US states and between European countries also adds complexities. Medium term: take time to understand the fund and portfolio structure in order to determine which measures can be taken without inflicting damage. Debt buybacks present an attractive opportunity but come with important tax considerations. Longer term: broken supply chains at the portfolio level will need to be fixed. Global sourcing structures will be re-evaluated. The “just-in-time” inventory management strategy will also be re-examined as company seek to protect themselves against future global disruptions. Digitization will drive improvements in sourcing practices and multi-channel distribution. Lastly, a focus on improving “corporate hygiene” by investing in cybersecurity and technology that enables remote ways of working will remain top-of-mind.