At present, the COVID-19 is raging all over the world, which will seriously impact the safety of human beings and the development of economy and society. While introducing active anti measures, Germany also launched a stronger tax support bill.
Tax free program: from April 3 to the end of 2020, protective masks and disinfectants donated to hospitals, medical institutions and sanatoriums will not be subject to VAT. This exemption applies if taxpayers use their staff for medical purposes without compensation and donate medical equipment to emergency medical services, medical social workers, nursing homes or police stations and fire brigades. In addition, according to the German customs authority's decree, more importers will be exempted from customs duties on imports of humanitarian aid under certain conditions.
In addition, the Ministry of Finance announced that the federal cabinet has decided that, in addition to normal wages, cash or in kind bonuses paid to employees as a result of the covid-19 pandemic will be exempted from tax and social security payments between March 1, 2020 and December 31, 2020.
Adjustment of prepaid tax: until December 31, 2020, once it is clear that the income of the company, self-employed and self-employed is lower than that of the COVID-19 period, the tax authorities should reduce the advance tax rapidly and directly. Taxpayers can also request adjustment of their income tax advance and corporate tax advance by submitting an application to their respective tax authorities. This policy also applies to trade tax advances.
Some states will also offer refunds of special VAT advances. Entrepreneurs usually have to submit a preliminary VAT return to their local tax office ten days before the calendar month. Now entrepreneurs can apply for a one-year delay in filing a declaration. This special prepayment refund policy is effective for a long time, and the amount is 1 / 11 of the total value-added tax prepayment payable in the previous year.
VAT rate adjustment: the federal cabinet has decided to apply the reduced tax rate to the food and beverage supply of restaurants and bars from 1 July 2020. The tax relief for such services will initially apply for one year until June 30, 2021.
Generally speaking, if food and drink are supplied in restaurants and bars in Germany, VAT must be paid at the standard VAT rate of 19%. The tax rate on food and drinks for takeaway can be reduced to 7%. The reduced 7% VAT rate will be applied to the first category temporarily.
Suspension measures: by the end of 2020, income tax, corporate tax and value-added tax will no longer be enforced. During this period, the late fee payable according to the law will also be exempted. The General Administration of customs, which is also responsible for import value-added tax, energy tax and aviation tax, will give the same relief. This exemption also applies to insurance taxes and VAT administered by the federal central tax office.
Enhance and accelerate the development and production of products directly related to covid-19: since the outbreak of COVID-19, the demand for disinfectants has increased dramatically. The federal Treasury has taken a step that now allows pharmacies to use alcohol duty-free to produce disinfectants.
These products include vaccines, medical products such as hospitals and medical equipment (including ventilators), and protective clothing and equipment. Public support will take the form of direct grants, repayment of advances and tax incentives, as well as guarantees to cover losses, or as an independent aid measure.
Extended deadline: provides that an employer may request an extension of two months for the filing of monthly or quarterly (if applicable) payroll withholding tax returns, provided that the employer or the financial officer can prove that he is not at fault in the matter of failing to file such a statement in a timely manner.
Deferred tax payment: if not able to pay the taxes due in 2020 due to the economic impact caused by the COVID-19, it may apply to the respective tax authorities to postpone the payment of taxes before December 31, 2020.
The application for tax deferment will not be subject to strict approval conditions. Enterprises only need to state that their business is directly affected by the COVID-19, and it is not necessary to record the amount of economic losses in detail. The measure applies to income tax, corporate tax and value added tax.
（Resource Document-issuing agency：Jiangsu Provincial Tax Service, State Taxation Administration、Published date：2020-05-13 10:27 Preferential Tax Policies in Germany During The COVID-19 period、Wolters Kluwer Global Daily Tax News Published date：2020-04-26 Germany Providing COVID-19 Tax Help For Companies）
