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UPDATE: Corona-Crisis | Fiscal measures

26 January 2021

Katrin Driesch , Senior Manager,
Tax & Legal Policy Department,

The impact of the Corona crisis on society and public life in Germany remains enormous. Nobody can foresee what is yet to come, even after almost a whole year has passed since the pandemic began. It is still difficult to assess which short, medium and long-term consequences the current situation will have for the economy. The Corona crisis brings about a daily need for action for the self-employed and companies and/or their management.

On 31 December 2020, the temporary reduction in VAT rates, one of the largest measures in the “Zweite Corona Steuerhilfegesetz” (“Second Corona Tax Assistance Act”), expired. However, Legislature has already launched other far-reaching packages of measures for businesses to help mitigate the Corona crisis.

As a result of amendments to the law or corresponding resolutions, many of the facilitations already adopted for short-time work allowances, claims to subsidies and support programmes to improve liquidity (e.g. KfW loans), extended deadlines for the obligation to file for insolvency, civil and company law regulations and state compensation obligations as well as, in particular, many tax law measures to ease the burden on affected companies were extended into 2021. The facilitations granted since the beginning of the crisis in the form of extended deferral and limited enforcement measures, adjustment of advance payments for income tax, corporate income tax and trade tax continue to be considerably simplified. Reductions and refunds of special advance VAT payments also continue to be possible throughout Germany. At the same time, to the best of our knowledge, there are currently no plans to introduce any further major tax measures in addition to the Annual Tax Act 2020 (JStG 2020), even if the pandemic persists.

With our detailed presentation, we would like to give you an overview and provide needed explanations of the individual measures. At the same time, however, we would like to draw your attention to ongoing developments that repeatedly lead to changes in the legal and tax framework. The overview can therefore only represent a - nonetheless helpful - snapshot.

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