Measures being proposed in a draft legislation are intended to provide certain tax relief measures and enhanced liquidity in response to the coronavirus (COVID-19) pandemic.
The draft law includes two measures specifically concerning value added tax (VAT) relief:
In addition, a new § 27 (22a) UStG would allow flexibility in light of the COVID-19 implications and specifically would concern the timing of the transition rule application, given that a small number of “legal entities under public law” submitted a declaration before 2016 and have already carried out the necessary adjustment for 1 January 2021; these entities could begin with the application of § 2b UStG by making a corresponding “retraction” in 2020. In contrast, other “legal entities under public law” would be granted up to two more years for the adjustment period.
Read a May 2020 report [PDF 307 KB] prepared by the KPMG member firm in Germany.
Other recent VAT developments that may affect businesses in Germany include the following items:
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