Tax measures to mitigate the economic impact of the Coronavirus crisis

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The Federal Government and the Federal States have launched a package of economic measures to support companies in the Coronavirus crisis. These include making it easier to grant deferrals, facilitating the adjustment of advance payments and temporarily waiving enforcement measures or default surcharges. In the following, we provide you with an overview of the details of these measures.

DEFERRAL OF TAX PAYMENTS

In the context of facilitating the granting of deferrals of tax payments that are already due or becoming due, applications for deferrals are possible for the following types of tax:

• Corporate tax
• Income tax
• Trade tax
• VAT/VAT prepayments

An application for deferral can be made until 31.12.2020, and tax deferments are as a rule interest-free. The deferral does not apply to wage tax and capital gains tax.

In the application it must be shown that the taxpayer is directly and significantly affected by the consequences of the coronavirus crisis. Detailed financial information and numerical data is not required. The examination of the applications by the tax offices should be unbureaucratic. The tax authorities will examine each application in an unbureaucratic manner.

Deferral of VAT prepayments should also be possible in the case of taxation according to monies received (actual taxation).

REDUCTION OF ADVANCE TAX PAYMENTS FOR 2020

Simplified applications for reductions in income and corporate tax or the trade tax base amount for the purposes of advance payments for 2020 can be submitted to the competent tax office until 31 December 2020.

The application must show that the taxpayer is directly and significantly affected by the coronavirus crisis. Applications are not to be rejected because the taxpayer is not able to prove the value of the damage incurred in detail.

Depending on the individual federal state, applications must be submitted on forms issued by the respective federal state or informally.
The cities or municipalities are bound by the trade tax base amounts determined by the tax office for the purpose of advance payments, and they will adjust the advance payments of trade tax accordingly.

In some federal states, applications for a (pro-rata) refund of the special advance payment of VAT for 2020 can already be submitted. Refunds should be possible at least to the extent that the turnover expected for 2020 falls short of the actual turnover in 2019.

RETROSPECTIVE ADJUSTMENT OF ADVANCE PAYMENTS FOR 2019

An adjustment of advance payments made for 2019 or the deferral of outstanding payments for 2019 due to an expected loss-carry-back from 2020 should be possible on request. The tax authorities of Lower Saxony have already commented on this. It should be noted that under the current legal situation, loss-carry-back is only possible for corporate tax and income tax, and that it is limited in amount.

ONE LAST COMMENT ON OUR OWN BEHALF:

For questions and assistance with applications, your personal contact persons at FIDES will continue to be available to you. We guarantee our availabilitiy via email or by telephone. In any case you will be connected via our respective head offices in our locations.