Update as of 24 June 2020
For all individuals or firms who have been economically affected by the corona crisis in Germany the following applies nationwide:
Taxpayers who can show that they have been affected by the corona pandemic can submit applications for deferral of taxes due or becoming due until 31 December 2020. The deferral is generally granted without interest. The same applies to deferrals for taxes becoming due after 31 December 2020.
Applications can also be filed to adjust the advance payments for income tax and corporate income tax in 2020 and 2021. It is now also possible to get a refund of advance payments for 2019 if a tax loss carry-backward from 2020 is shown to be likely. In addition, the tax loss carry-backward will be quintupled for the years 2020 and 2021 to EUR 5 million. It should already be possible to use the loss carry-backward from 2020 as part of the tax return for 2019.
Enforcement measures for outstanding tax payments can be abandoned until 31 December 2020. Penalties for late payments incurred as of 19 March 2020 will to be waived until 31 De-cember 2020.
Tax deduction amounts (wage witholding tax, withholding tax on interest and dividends) cannot be deferred, only their enforcement can be postponed.
Prepayment adjustments and payment deferrals are also claimable for trade tax.
The deadline for wage withholding tax declarations can be extended on application if the delay is caused by the corona pandemic.
In almost all federal states there is now the possibility to reclaim the special VAT advance payment for the permanent deadline extension. The deadline extension remains active despite of the refund.
A temporary reduction in VAT rates from 1 July to 31 December 2020 for the regular tax rate from 19% to 16% and for the reduced tax rate from 7% to 5% is planned (subject to approval of parliament).
Upon request, social security contributions for the months of March to May can be deferred without interest or any security deposit until the end of July 2020.
There is also a simplified verification of donations and a favorable tax treatment of aid measures.
Emergency aid is available in all federal states to support small and medium-sized companies with up to 50 employees. Depending on the size of the company, non-repayable emergency aid to secure economic existence and to bridge current liquidity shortages is granted on request. The pay-ments range between EUR 9,000 and EUR 30,000 and are further limited to the amount of liquidity shortage caused directly by the corona pandemic or a corresponding drop in sales.
A wide range of further (repayable) liquidity support (loans and guarantees) can be applied for via the local bank to German state-owned devel-opment bank KfW. This support is available to firms of all sizes.
Workers who have to reduce their working ours due to the corona crisis receive short-time working benefits for up to 21 months. The benefit amounts to 60 % (67 % for workers with dependent children) of the net wage and will now be increased up to 80 % (or 87 % respectively) after the 7th month.
If you have any questions regarding this or any of the other initiatives offered to those affected by the current disruption, please contact Rainer Lamm at Rainer.Lamm@dffk.de.