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UPDATE: Corona-Crisis | Fiscal measures

22 July 2020

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. It is even more difficult to assess what short, medium and longterm
consequences the current situation will have for the economy. The Corona crisis brings about a daily need for action for companies and their management.

Legislation has launched far-reaching packages of measures for companies to possibly mitigate the corona crisis. Most recently, the „Zweite Corona Steuerhilfegesetz“ („Second Corona Tax Assistance Act“) passed the law-making process: the central point is the temporary reduction of VAT rates; however, advantageous changes for the loss carry-back to 2019, for depreciations or regarding the deadlines for reinvestment, etc came into force. The Corona Tax Assistance Act, which was previously passed by the Bundestag and Bundesrat, already provides particularly for the application of the reduced VAT rate for restaurant and catering services provided in the gastronomy.

In addition, 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 continue to exist: With corresponding decrees, federal and state governments as well as the fiscal authorities introduced relief right at the beginning of the crisis through extended deferral and limited enforcement measures and considerably simplified the adjustment of advance payments for income, corporation and trade tax. A reduction and refund of special VAT prepayments is also possible throughout Germany.

With our detailed presentation we would like to give you an overview and necessary explanations of the individual measures.