Unpredictable political and economic developments such as the current Corona Virus Crisis can have a significant impact on the global economy. In order to support the whole economy as well as singular businesses German federal and state governments have issued a lot of different support-programmes as well as tax relief for companies. Our experts are happy to advise you on the individual national and local programmes and possibilities. Please contact your usual contact persons or our impact team.
Below you will find a continuously updated list of current tax topics and services in English.
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.
The Federal Ministry of Finance (BMF) published a second, revised version of the draft letter on the temporary reduction of German VAT rates on 23 June 2020. As its most important change, the draft contains a simplification rule that gives entrepreneurs an extra month of time to change their processes for B2B transactions.
In an unexpected statement, German chancellor Angela Merkel and several high ranking cabinet members have announced late Wednesday evening (3 June 2020) to introduce a temporary reduction of the German VAT rates from 19% to 16% (regular VAT rate) and from 7% to 5% (reduced rate), respectively. The reduced VAT rates are scheduled to come into effect on 1 July 2020 and remain in force until 31 December 2020.
As a result of the decline in demand on the world market caused by the Corona Virus Crisis, aggravating production and sales processes as well as labor law challenges, many multinational enterprises (MNEs) suffer significant reductions in profits, or even more, suffer losses. The current coronavirus pandemic trigger enormous challenges for the global economy and requires rethinking of existing structures and, in some cases, also (temporarily) redesigning existing transfer pricing models.