Businesses will receive tax-related assistance in order to boost their liquidity during the coronavirus pandemic. In coordination with the highest revenue authorities of the German Länder, the Federal Ministry of Finance has adopted a circular specifying tax relief measures to support affected taxpayers.
Tax payment deferrals: If, as a result of the economic effects caused by the coronavirus pandemic, businesses cannot afford to pay taxes that are due in 2020, they can apply for temporary, interest-free deferrals of these payments. Businesses can file applications with their respective tax offices until 31 December 2020.
The approval of deferrals will not be subject to strict conditions. Businesses will be required to explain that they are directly affected, but they will not have to document in detail the amount of economic damage. This will support taxpayers’ liquidity, because the timing of tax payments will be delayed. This measure applies to income tax, corporation tax and VAT.
Adjustments to tax prepayments: In addition, companies, self-employed persons and freelancers can request adjustments to the amount of their income tax prepayments and corporation tax prepayments. The same applies to the base tax amount used to determine trade tax prepayments. They can do this by filing an application with their respective tax office. As soon as it becomes clear that a taxpayer’s income in the current year will be lower than expected prior to the coronavirus pandemic, tax prepayments will be reduced in a swift and straightforward manner. This will boost their liquidity.
Suspension of enforcement measures: Measures to enforce the payment of overdue taxes will be waived through the end of 2020. Late-payment penalties that fall due under the law during this period will be waived as well. This applies to income tax, corporation tax and VAT.
The customs administration, which administers import VAT, energy duty and aviation tax, will grant the same relief. This relief also applies to insurance tax and to VAT administered by the Federal Central Tax Office.
Facilitation of disinfectant production: The demand for disinfectants has surged dramatically since the outbreak of the coronavirus epidemic. The Federal Ministry of Finance has adopted a measure that now permits pharmacies to use alcohol tax-free for the purpose of producing disinfectants.
These tax-related assistance measures form part of a multibillion-euro protective shield for Germany.
Multibillion-euro protective shield for Germany
Finance Ministry circulars (in German only)
Customs: Information on the effects of the coronavirus crisis (in German only)
Further information on assistance being provided in connection with customs and excise duties is provided by the customs administration.