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:
Information of KfW liquidity program:
contact: Arell Buchta
Eureos Gmbh - tax, legal, audit, advisory