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Germany: Tax relief measures in response to coronavirus (COVID-19)
Germany: Tax relief measures in response to coronavirus
The Finance Minister and Federal Economics Minister on 13 March 2020 presented a package of measures to address the effects of coronavirus (COVID-19).
The measures also include the following tax relief provisions to enhance liquidity for companies:
- Possibilities for deferring tax payments, reducing advance payments, and relief in the area of enforcement
- Deferrals of tax collection to be facilitated, without the assessment of interest—in particular if the collection would impose a considerable hardship on the taxpayer
- Postponement of the date of tax payments
- Waiver of late payment surcharges until 31 December 2020
The agencies that administer the energy tax and air travel tax as well as value added tax (VAT) were directed to grant appropriate relief measures.
Follow-up measures
Additional measures being discussed include proposals for partial repeal of the solidarity surcharge or improved depreciation schedules, but are not part of the 13 March package of measures. Nevertheless, a coalition committee decided on 8 March 2020 on other tax policy measures to strengthen the economy, such as:
- Increased depreciation for “digital assets”
- An option for corporate income tax for partnerships
- An increase in the reduction factor for the trade tax credit for individuals
- Modification of the controlled foreign corporation (CFC) rules with an adjustment of the low tax rate
KPMG observation
The currently planned tax measures can be implemented through administrative procedures; legislative action is not required. However, coordination with the Länder (Federal states) is necessary and has already been initiated by the Federal Ministry of Finance. Both the package of measures of
13 March 2020 and the coalition decision of 8 March 2020 are available on the website of the Federal Ministry of Finance.
Taxpayers seeking to invoke these relief measures need to submit an application with the responsible tax office.
Read a March 2020 report [PDF 98 KB] prepared by the KPMG member firm in Germany
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