One
of the four corner points of the support package of German Government for
businesses comprises of tax related liquidity support measures. Concrete
businesses which expect an income reduction related to Coronavirus crisis for
the current year can apply for a reduction of tax prepayments e.g. income and
corporate income tax. It is also possible that such businesses can defer tax
payments if a tax payment in time is going to lead to undue hardship. The local
tax authorities are instructed not to apply strict valuation standards on the
applications and act fast and economically. Strict enforcement measures (such
as arrestment of bank accounts and penalties for late payments) shall be
suspended until December 31, 2020).

The
same concessions to tax payers should be made by the customs administration and
the Federal Central Tax Office, responsible for various other taxes beside
income taxes such as custom duties, energy tax, insurance tax and aviation tax.

Beside
tax related liquidity support the Coronavirus support package consists of other
supporting measures. One which is already adopted is the benefit for reduced
hours on March 13, 2020. The biggest part of the support package consists of in
general unlimited liquidity assistance programs provided by German Development
Bank KfW to ensure a quick and unbureaucratic access to loans. Last not least,
the German government is in close discussion and coworking with all European
partners to coordinate measures against the Coronavirus outbreak across Europe.
All businesses in Germany are requested to assess how their business models are
affected by Coronavirus and if they meet the requirements for support measures
of German government. Tax measures such as decrease of tax prepayments or defer
of tax prepayments must be proactively applied with the tax authorities.

For
information on the government response package:

https://www.bundesfinanzministerium.de/Content/DE/Pressemitteilungen/Finanzpolitik/2020/03/2020-03-13-download-en.pdf?__blob=publicationFile&v=2

Information
of KfW liquidity program:

https://www.kfw.de/KfW-Konzern/Newsroom/Aktuelles/KfW-Corona-Hilfe-Unternehmen.html

contact: Arell Buchta