close
Share with your friends

Germany

Government and institution measures in response to COVID-19.

Government and institution measures in response to COVID-19.

Return to homepage  |  Last updated: 27 May, 2020

General Information

Overall, responses have focused on:

  1. Tax-related liquidity assistance
  2. Protective shield
  3. More flexible compensation benefits

Tax measures – Direct and Indirect

(e.g. payment deferrals, rate reductions…)

Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.

Employment-related measures

(e.g. state compensation schemes, training…)

Act to Improve the Regulation on Short-Time Working

  • The law passed on the temporary crisis-related improvement of the regulations for short-time working compensation on March 13, 2020 and the following statutory-decrees of the Federal Government, which are limited in time until the end of 2021, facilitate access to short-time working compensation, relieve companies from social security contributions and also enable temporary workers to access short-time working compensation. 
  • Before the change in law, at least one third of the employees had to be affected by the loss of working hours in order to qualify for the relief of short-time work compensation. Now it is sufficient that only ten percent of a company's employees are affected by a loss of 10% of their working hours.
  • Short-time working compensation can be paid up to 12 months.
  • Negative working time balances do not need to be offset to avoid short-time working.
  • For the first time, short-time working compensation can also be paid to temporary workers.
  • It is not necessary anymore to first use up paid holidays.

Refund of Social Security Contributions

  • Employers are to receive full reimbursement of social security contributions. However, this only applies to companies that fall within the scope of the Act of short-time working.

Reduced hours (Kurzarbeitergeld)

  • Companies may receive reduced hour compensation when at least 10% of their are affected by a working hour-shortage (i.e.: don’t have any more work to do) of at least 10%. Previously, 1/3 of the employees had to be affected by shorter working hours in order for the company to get reduced hour compensation.
  • Waiver of negative working hours: Employees mustn’t offset negative working hour balances anymore. Previously, negative working hour balances had to be compensated in order to be eligible for reduced hours compensation
  • It is not necessary anymore to first use up paid holidays.
  • For the fist time reduced hours compensation benefit will also be available to temporary/agency workers.
  • Complete reimbursement of social security contributions by the Federal Labor Office.
  • Increasing number of Reduced hours compensation claims: Approx. 751,000 new claims (10.1 million employees) as of 30.04.2020. Comparison: Around 2,000 claims in February 2020
  • Just under 1/3 of all companies with at least one employee subject to social insurance contributions have applied for short-time working.

Retrospective Effectiveness

  • These facilitations will take effect ex post facto from 01 March 2020 and will be paid retroactively
  • Companies that have already registered for reduced hours compensation before 31.12.2019 can receive compensation for a maximum of 21 months instead of the usual maximum of 12 months (withdrawal at the most until 31.12.2020)

Processing time & acceleration measures of the Federal Labor Office

  • 2-staged process:
    • Payment by the employer, up to now, usually possible max. 15 days after application (as of 23.03.20). Federal Labor Office expects Corona to extend the processing time
    • Afterwards, the reimbursement should happen „asap“
  • Staff training and -increase to accelerate the processes:
    • Staff increase in the reduced hours department from 800 to 8,000
    • Phone-operating staff increase from 4,000 to 18,000

As of 1 April 2020, it can be assumed that the processing of applications will take a very long time, companies will be forced to temporarily finance the reduced hours compensation and the social security contributions in the meantime. This should be taken into account when applying for KfW financing.

Law on the Prevention and Control of Infectious Disease

  • In the event of illness or a justified suspicion of illness, whereby the employee is quarantined, the employer is obliged under the Continued Remuneration Act to continue to pay the employee his regular salary for up to six weeks. At the beginning of the seventh week, sickness benefit at the regular rate of approximately 70% of the net salary is paid by the health insurance company.
  • Even in the case of an illness or the justified suspicion of an illness which falls within the scope of application of the Law on Prevention and Control of Infectious Disease, this general regulation remains in force. However, the employer will be reimbursed the wages paid in the first six weeks by the competent authority on application. In the seventh week, the sickness insurance fund pays the wage, which may in turn request reimbursement from the competent authority.
  • In contrast to the continued remuneration, self-employed workers and freelancers are also entitled to compensation. According to the Law on Prevention and Control of Infectious Disease they can apply to the competent authority for financial reimbursement in the amount of their loss of earnings.
  • Due to the Covid-19 crisis the German government has reduced the threshold for the minimum number  of employees who have to work short-time from 30% to 10%

Start-ups:

  • Facilitate access to short-time working compensation: State pays for 60% (no kids) or 67% (with kids) of the percentage of work the employee is not working.
  • Relieve companies from social security contributions
  • Enable temporary workers to access short-time working compensation

Economic stimulus measures

(e.g. loans, moratorium on debt repayments…)

Draft bill of the German Government as of 24th March 2020 (19/18110)

Regulations to protect domestic and commercial tenants

  • Tenant
    • A lease contract cannot be terminated by the landlord if the tenant is in default with its monthly rent payments in the period from 1 April 2020 until 30 June 2020 due to the effects of the COVID-19-Pandemic.
    • The tenant shall compensate the rent arrears until 30 June 2022 at the latest. In the event of a dispute, the tenant must substantiate that the non-payment was based on the effects of the COVID-19-Pandemic.
    • The modifications are applicable for domestic and commercial tenants.
  • Landlord
    • The termination rights of the landlords are restricted. A lease may not be terminated on the grounds that the tenant is in default with its monthly rent payments in the period from 1 April 2020 until 30 June 2020 if the non-payment was due to the effects of the COVID-19-Pandemic (the said period may be prolonged in the future till 30 September 2020 or even further).
    • A deviation of this regulation to the disadvantage of the tenant is excluded. Landlords must accept non-payments of the rent for up to 24 months, which can be interpreted as a legally enforced deferral of the rent. The obligation of the tenant to pay rent is not suspended. Interest on the arrears and damages caused by delay are to be compensated. The termination right revives, if the tenant does not compensate the rent arrears until 30 June 2022. Terminations of the lease because of other breaches of the lease agreement are still possible. Further, the landlord can utilize the rent security during the lease term if and to the extent the landlord’s payment claim against the tenant is undisputed.

Suspension of the obligation to file for insolvency

  • The obligation to file for insolvency is suspended retroactively from 1 March 2020 until 30 September 2020 for companies which are suffering economic difficulties or have become illiquid because of the COVID-19-Pandemic (the suspension will not apply in cases in which the insolvency is not due to the Pandemic) provided that there are viable prospects for a future recovery from the illiquidity. Incentives are also to be put in place to help affected companies to operate economically again and to uphold their business relations. For a three-month transition period, the rights of creditors to request the opening of insolvency procedures are to be restricted.
  • If necessary, the Federal Ministry of Justice is entitled to extend the suspension of the obligation to file for insolvency until 31 March 2021 at the latest
  • If companies take advantage of the suspension of the obligation to file for insolvency, there are strict requirements regarding those companies’ documentation:
    • A liquidity status that demonstrates solvency as of 31.12.2019 or later must be prepared.
    • Maturity statistics for vendors, debtors, other liabilities etc. as of the above reporting date to support the liquidity status must be prepared (Caution: this can usually not be created afterwards).
    • Evidence must be shown that the financing problems result from the Corona-pandemic.
  • The management bears the burden of proof that these conditions are met, but proof is facilitated by a legal presumption that applies if the company was not insolvent as of 31 December 2019.

Restriction of the admissibility of third-party applications to open insolvency proceedings

  • For creditor insolvency applications filed between 28 March 2020 and 28 June 2020, the insolvency must already have existed on 1 March 2020.

A protective shield worth billions for businesses

  • The German government will protect businesses with new measures to provide liquidity, the volume of which is unlimited. Most of the Corona aids are active. 
  • Existing liquidity assistance programs will be expanded to make it easier for companies to access cheap loans. This can mobilise a large volume of liquidity-enhancing loans from commercial banks. To this end, established instruments complementing loans offered by private banks will be extended and made available to a greater number of companies, a.o. via the state-owned development bank KfW (“Kreditanstalt für Wiederaufbau”):
  • Conditions for the KfW-Unternehmerkredit (business loan for existing companies) and the ERP-Gründerkredit-Universell (start-up loan for companies that are less than 5 years old) will be loosened by raising the level of risk assumptions (indemnity) for operating loans and extending these instruments to large enterprises with no limit regarding turnover a turnover of up to €2 billion (previously, the limit was €500 million). Higher risk assumptions of up to 80% for large enterprises and up to 90% for SMEs up to a turnover of €50 million or 250 employees. will increase banks’ willingness to extend credit. Individual credits are limited to a volume of €1 billion and restricted to investments or purchases of operating material within Germany.
  • In the case of the “KfW Loan for Growth”, the program aimed at larger companies, the current turnover threshold of €2 billion will be abolished raised to €5 billion. In the future, these loans will take the form of syndicated loans and will not be restricted to projects in one particular field (in the past, only innovation and digitalisation projects were eligible). Risk assumption will be increased to up to 80%. This will improve larger companies’ access to syndicated loans. The minimum credit volume in this case is €25 million or equal to 50% of total debt (interest-bearing liabilities).
  • For guarantee banks (Bürgschaftsbanken), the guarantee limit for small enterprises will be doubled to €2.5 million. The Federation will increase its risk share in guarantee banks by 10% to make it easier to shoulder risks, which are difficult to assess in times of crisis. The upper limit of 35% of operating resources in guarantee banks’ total exposure will be increased to 50%. To accelerate liquidity provision, the Federation is giving guarantee banks the freedom to make guarantee decisions up to €250,000 independently and within a period of three days.
  • The large guarantee program (parallel guarantees from the Federation (“Bund”) and the regions (“Länder”), which was previously limited to companies in structurally weak regions, will be opened to companies of other regions as well (provisionally limited until 31 December 2020) . In this program, the Federation covers operating loans and investments with a surety requirement upwards of €50 million and a guarantee rate of up to 90%.

Economic Stabilisation Fund by the Federation (“Bund”)

  • €100 billion for direct recapitalisation measures to ensure the solvency of companies (in particular the acquisition of shares or dormant holdings, subscription to profit-sharing rights or subordinated bonds)
    • Precondition: At least two of the following criteria must have been fulfilled as of 1 January 2020:
      • Balance sheet total > €43 million
      • Turnover > €50 million
      • More than 249 employees (yearly average)
  • €400 billion for guarantees that help companies to counteract liquidity bottlenecks refinance themselves on the capital market
  • €100 billion to refinance the KfW (Kreditanstalt für Wiederaufbau) in the implementation of the special programmes assigned to it

Protective shield for supplier credits

  • Joint protective shield amounting to € 30 billion from the Federal Government and credit insurers to secure supplier credits of German companies
  • Assumption of guarantees for indemnification payments by the credit insurers of up to € 30 billion by the Federal Government in 2020
  • Substantial participation of credit insurers; federal government receives 65% of premium income in 2020.
  • Credit insurers bear losses of up to € 500 million and assume the default risks that exceed the Federal Government guarantee

Suspension of the obligation to file for insolvency

  • Companies that are severely affected by the corona-crisis are excepted from the obligation to file for insolvency until September 30th 2020 under the following conditions:
  • A company’s insolvency must be caused by the Corona-pandemic.
  • Prior to the suspension of the obligation to file for insolvency, there was no ground for insolvency.
  • There is justifiable prospect for rehabilitation if financial support will be granted
  • Furthermore, there are strict requirements regarding companies’ documentation:
  • Preparation of a liquidity status that demonstrates solvency as of 31.12.2019 or later.
  • Preparation of maturity statistics for vendors, debtors, other liabilities etc. as of the above reporting date to support the liquidity status (Caution: this can usually not be created afterwards).
  • Evidence that the financing problems result from the Corona-pandemic.

Consumer loan agreements

  • For consumer loan agreements entered into before 15 March 2020, claims for repayment, amortisation and interest which are due between 1 April and 30 June 2020 are postponed by 3 months from their due date if and to the extent the consumer suffers a decline of income due to the COVID-19 pandemic, making fulfilment of the relevant obligation unbearable for the debtor, specifically in cases where the debtor’s means for living are endangered.
  • Creditors’ termination rights on the basis of non-payment or deterioration of credit or a deterioration of the realisable value of any collateral granted for such loan are excluded until 30 June 2020. The creditor has to offer to the consumer to negotiate a potential agreement and conceivable measures of support. If the parties don’t agree for the time period after 30 June the term of the agreement will be extended by 3 months.
  • Please note: in exceptional cases if the postponement of the payment or the exclusion of the termination right are unbearable for the creditor, the relief for the debtor shall not apply.

Other regulations

  • In the fields of cooperative law, company law, the law governing associations, foundations and the private ownership of apartments, as well as transformation law, provisions are to be eased. The aim is to enable the respective bodies to take necessary decisions and act in spite of ongoing restrictions on assembly. It is to be made easier to hold meetings using telecommunications. For a limited period, for instance, the annual general meetings of Aktiengesellschaften (public limited companies) may be held as virtual events without shareholders being present. For GmbH (private companies) it is to be easier to make decisions using written procedures. The proposed changes to the law governing the private ownership of apartments is to make it possible to dispense with annual meetings of owners for the meantime.

Kreditanstalt für Wiederaufbau (KfW)

  • The German Federal Government has adopted a package of measures to help companies cope with the coronavirus crisis. The role of the state-owned development bank KfW in this crisis is to facilitate the short-term supply of liquidity to companies.

KfW Entrepreneur Loan

  • Companies on the market for longer than 5 years
  • Assumption of risk (liability waivers) of up to 80% for the on-lending financing partners (usually the regular banks) for large enterprises and up to 90% for the on-lending financing partners for SMEs up to a turnover of €50 million a balance sheet sum of up to €43 million  or 250 employees.
  • Restricted to working capital loans with a volume of lending of up to EUR 1 billion. (volume > € 25 million: max. the higher of 50 % of the total debt or 30 % of the balance sheet total of the group)
  • Max. term of 10 years (credit volume > T€ 800) / 6 years (credit volume < T€ 800)
  • Grace period of up to 2 years
  • Granting of liability waiver to large companies, regardless of the volume of their annual turnover (previously: EUR 500 million).

ERP Start-Up Loan – Universal

  • Young companies on the market for less than 5 years
  • Assumption of risk of up to 80% for the on-lending financing partners (usually the regular banks) for large enterprises and up to 90% for the on-lending financing partners for SMEs up to a turnover of €50 million or 250 employees.
  • Restricted to working capital loans up to EUR 1 billion (volume > € 25 million: max. the higher of 50 % of the total debt or 30 % of the balance sheet total of the group)
  • Max. term of 10 years (credit volume > T€ 800) / 6 years (credit volume < T€ 800)
  • Grace period of up to 2 years
  • Granting of liability waiver to large companies, regardless of the volume of their annual turnover (previously: EUR 500 million).

“VR Smart” flexible promotional loan

  • KfW-eligible entrepreneur loan, volume from T€ 5 to max. T€ 100 (max. 25% of the firms 2019 revenue)
  • Interest rate: dependent on creditworthiness, min. 1.00% p.a., term: up to 10 years (redemption-free for up to 2 years), 100% unscheduled repayment possible
  • No provision of collateral necessary
  • Requirements: Company based in Germany and at least 3 years on the market

KfW Special Programme 2020

  • Syndicated financing with a minimum of €25 million and a maximum of the greater of 50% of the company’s total debt or 30% of the company’s balance sheet total.
  • KfW participates in syndicated financing for investments and working capital of medium-sized and large enterprises. KfW assumes up to 80% of the total risk.
  • No profit and dividend distributions during the credit term (except normal market remuneration)
  • Planned adaptions by the Federal Government’s “Corona-cabinet”:
    • Credit term extension from up to 5 to up to 6 years, possibly up to 10 years
    • Deletion of the requirement of a positive prognosis for continuation in the KfW information sheet; instead, companies must have demonstrated orderly economic conditions as of 31.12.2019 (positive continuation is presumed)

Interest rates range from 1.0% to 1.46% with a 90% guarantee, 2.0% to 2.12% with an 80% guarantee. Dividends and profit distributions are not permitted during the term of the loan

KfW fast track loan for the mid-sized companies

  • The KfW (Kreditanstalt für Wiederaufbau) offers a fast track loan for the companies with more than 10 employees.
  • Mid-sized companies can apply for the new KfW fast track loan for investments and running costs as of 15 April 2020
  • This loan is 100% secured by the German Federal Government guarantee. That is the reason why the chances of getting an approval for this loan is rather high.

Characteristics

  • Development loan for acquisitions and running costs
  • For mid-sized companies with 11-249 employees, that exist on the market at least since January 2019
  • Cumulation with other KfW loans or instruments of the Economic Stabilisation Fund is not permitted (exception: grants awarded under the emergency aid programmes of the Federal Government and the Federal States, with a cumulative ceiling of €800.000)
  • Max. loan amount is set at up to 25% of the firm’s revenue in 2019:
    • For companies with up to 50 employees – max. €500.000 per business group
    • For companies with more than 50 employees – max. €800.000 per business group
  • Interest rate is oriented to the capital market development and is to be set by the house bank
  • 10 years term
  • 100% risk assumption by the KfW
  • No risk assessment by your bank
  • No provision of collateral necessary

Precondition

  • The applicant generated a profit: on average over the past 3 years (or over a shorter period in the case of younger companies)
  • No profit and dividend distributions during the credit term (except normal market remuneration)

BMZ funding program develoPPP.de

  • The Federal Ministry of Economic Cooperation and Development (Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung, BMZ) offers funding for the projects that significantly mitigate the negative effects of the COVID-19 in developing and emerging countries.

Eligibility

  • German and European companies or companies in emerging and developing countries with a long-term commitment in these countries
  • Min. turnover €400.000
  • Two operating business years
  • Registered in the EU or in the country from the OECD DAC list

Funding

  • Up to €200.000 (in exceptional cases a higher funding amount is possible).

Federal Emergency aid

  • € 50 billion emergency aid from the Federal government
  • For micro-enterprises (up to 10 employees), the Federal government provides up to T€15 as a taxable subsidy via the Federal States
  • The Federal States have supplemented this emergency aid for companies with more than 10 employees with amounts of up to T€ 60 in different ways

Direct recapitalisation

  • The Federation (“Bund”) established an economic stabilisation fund containing €100 billion for direct recapitalisation measures to ensure the solvency of companies (in particular the acquisition of shares or dormant holdings, subscription to profit-sharing rights or subordinated bonds), €400 billion for guarantees that help companies to counteract liquidity bottlenecks and to refinance themselves on the capital market, and €100 billion to refinance the KfW (Kreditanstalt für Wiederaufbau) in the implementation of the special programs assigned to it
  • Within the scope of the fund the Federal Government provides measures with a budgetary impact of € 453 billion and guarantees of € 820 billion
  • For guarantee banks (Bürgschaftsbanken), the guarantee limit for small enterprises will be doubled to €2.5 million. The Federation will increase its risk share in guarantee banks by 10% to make it easier to shoulder risks, which are difficult to assess in times of crisis. The upper limit of 35% of operating resources in guarantee banks’ total exposure will be  increased to 50%. To accelerate liquidity provision, the Federation is giving guarantee banks the freedom to make guarantee decisions up to €250,000 independently and within a period of three days.

Emergency aid for cultural centres in rural areas

  • Federal Government provides up to €1.5 million for cultural centers in cities / communities with up to 20,000 inhabitants
  • Sociocultural centers etc. can apply for aids worth up to T€ 25 for modernization and construction
  • The funds are part of the Federal program “Rural development of the Federal Ministry for Food and Agriculture.

Approved loans / emergency aid as of 17.04.2020 (13,231 loans applied for)

  • 1.6 million applications for emergency aid for small businesses and the self-employed to date, amounting to € 9 billion
  • 12,992 loan applications with a total volume of € 8.5 billion approved by KfW

Processing time KfW for loans up to € 10 million

  • Processing time is "immediate" for loans up to € 3 million and for loans up to € 10 million in Fast Track proceedings
  • Since the house banks enter all the necessary information for the above loans into the KfW portal, the approval is fully automated when all the necessary data is entered completely
  • The house banks then receive KfW's refinancing commitment immediately
  • Well over 95% of the loans applied for are thus approved immediately due to the automation of the decision at the time of application

KfW Fast Track loan

  • If a fast loan is applied for, the maximum loan amount for all affiliated companies (participation from the Group's point of view > 50%) is limited to T€ 800
  • If the quick loan is not sufficient, it can be repaid early without paying early repayment penalties and a KfW Entrepreneur Loan can be applied for instead

Main sources of information

Loan application in the Group

  • In principle, each individual company in a group can apply for KfW Entrepreneur Loans / ERP Start-up Loans / Consortium Financing or Fast Loans from the Special Program 2020
  • In the case of applications by individual companies in a group, the size of the group, i.e. SME or large company, is always relevant for the amount of the indemnity (SME = 90%, large company = 80%)
  • In the case of SABs within a group of companies, due to the prohibition of profit transfer, the parent company must always assume liability for the company applying for the loan

Financing of foreign subsidiaries of German parent companies

  • Only German parent companies and all domestic subsidiaries can be financed with the KfW Entrepreneur Loan/ERP Start-up Loan
  • In context of the KfW special program 2020, both domestic and foreign subsidiaries of German parent companies can be financed

Financing of domestic subsidiaries of foreign parent companies

  • German subsidiaries of foreign parent companies can be financed with the KfW special program 2020
  • The application can be made by both the foreign parent company and the German subsidiary
  • When assessing company size/SME, the entire group and not only the German subsidiary must be considered

Start-ups:

  • A €2 billion support plan for start-ups and SMEs was launched on 1 April. The federal government is thus supplementing existing support programmes with a package of measures that is specifically tailored to the needs of start-ups. .
  • 3 key points which will be gradually implemented : i) Institutional venture capital investors (e.g. KfW Capital) will obtain additional short-term public funds that can be used for financing rounds in co-investments with private investors.(ii) Fund of funds investors and the European Investment Fund (EIF) should in future be able to take over shares of failing fund investors with additional public funds. (iii) Venture capital and other forms of financing as a substitute for equity should be facilitated for young start-ups without venture capital investors among the shareholders and for small SMEs. Parallel to the implementation of this package of measures, the federal government has also adopted the creation of the Future Fund for Start-ups, which should help them to emerge from the crisis in the medium term.
  • KfW Entrepreneur Loan Assumption of risk (liability waivers) of up to 90% for the on-lending financing partners (usually the regular banks) for working capital loans with a volume of lending of up to EUR 200 million
  • Economic security fund with 600bn volume (100bn equity, 400bn loans, 100bn hybrid-tools) for all companies and startups with an post mones valuation above 50m in a financing round since January 2017
  • Direct subsidies
  • SMEs get small subsidies up to EUR 15k for operating expenses
  • Equity/VC tools": 2bn matching fund, matching VC-investments with a 70:30 key (70 state, 30 private) as equity or convertible loans
  • 600bn security fund (contains an equity component)

Customs Measures

Duty relief

  • Free deliveries (donations) to institutions responsible for the medical care of the Covid-19 risk groups (e.g. hospitals and old people's homes) are exempt from import duties. EU-Code C26 to be stated on customs declaration.
  • Regarding the importation of items for disaster victims of the COVID-19 pandemic crisis, e.g. medical, surgical and laboratory equipment for emergency treatments, Customs has implemented a fast track to accelerate the importation. The importers should use a special code in the customs declaration called 9DFA “Einfuhr von medizinischen Hilfsgütern aufgrund der Corona-Situation“

Customs clearance

  • Customs declarations can be submitted in advance (before the goods are presented to the customs authorities) through ATLAS IT-Service in order to ensure a faster clearance.
  • Possibility to apply for a suspension of enforcement measures.

Payment facilities

  • Possibility to defer the payment of taxes collected by the customs authorities (e.g. import VAT, energy tax and air traffic tax). (Effective - until 31. December 2020)
  • Possibility to adjust the prepayment of taxes. (Effective - until 31. December 2020)
  • Postponed deadline for the submission of annual quota notification on greenhouse gas until 15th of June 2020

Other measures and sources

Law on the Prevention and Control of Infectious Disease

  • In the event of illness or a justified suspicion of illness, whereby the employee is quarantined, the employer is obliged under the Continued Remuneration Act to continue to pay the employee his regular salary for up to six weeks. At the beginning of the seventh week, sickness benefit at the regular rate of approximately70% of the net salary wage is paid by the health insurance company – up to.
  • Even in the case of an illness or the justified suspicion of an illness which falls within the scope of application of the Law on Prevention and Control of Infectious Disease, this general regulation remains in force. However, the employer will be reimbursed the wages paid in the first six weeks by the competent authority on application. In the seventh week, the sickness insurance fund pays the wage, which may in turn request reimbursement from the competent authority.
  • In contrast to the continued remuneration, self-employed workers and freelancers are also entitled to compensation. According to the Law on Prevention and Control of Infectious Disease they can apply to the competent authority for financial reimbursement in the amount of their loss of earnings

Temporary Border Controls

  • Controls at the internal borders with Austria, Switzerland, France, Luxembourg and Denmark have again been carried out temporarily by the Federal Police since 16 March 2020. This is done on the basis of the Schengen Border Code.
  • However, the cross-border movement of goods and the entry of commuters remains possible. German citizens and people with residence permits in Germany may also continue to enter the country.

Year-end audits during the Corona pandemic

  • The German Institute of Auditors (IDW) comments on questions regarding the year-end audit in times of the Corona crisis with technical advice
  • The Corona crisis must only be mentioned in the annual financial statements if the company is affected
  • In the assessment of the going concern, an audit opinion is generally possible if the assumptions regarding the effects of the Corona crisis on the company can be reconciled with available forecasts of the Federal Government, the German Council of Economic Experts etc. In addition, any necessary applications for loans/further liquidity assistance in the context of the corona crisis must be submitted with the liquidity planning.

Financial support from the federal government for consultancy services

  • SMEs based in Germany can apply for financial support from the federal government for consultancy services. This also applies if the SME is a distressed company
  • Maximum consultancy value = € 4,000, maximum grant = € 3,200 (several applications may be submitted until the maximum amount is exhausted)
  • Consulting companies that generate more than 50% of their turnover with consulting services are eligible
  • The promotion of entrepreneurial know-how can be particularly relevant for mandates with numerous chain stores

Measures to ease the lockdown

  • APRIL 20 Deconfinement begins. Smaller shops, bookstores and car dealerships reopen, with social distancing measures in place. Outdoor exercise allowed, only permitted in groups of two maximum. Private visits and personal travel remain banned. Face masks will be mandatory in public in most states. As of the end of the last week of April, Germany had carried out 467,00 tests and the government says it has capacity to carry out up to 900,000 tests per week. Those who test positive self-isolate for 14 days, or if seriously ill are taken straight to hospital under stringent protective measures. MAY 3 All restaurants and bars to remain closed until at least this date. MAY 4 Schools start reopening with exam year students. Pupils attend classes in groups on alternating days or weeks. Hairdressers reopen. Places of worship in Brandenburg and Bavaria open, but remain closed elsewhere.
  • 14 June: strict global travel warning to limit the spread of the coronavirus and prevent German tourists once again becoming stranded oversea "until further notice," but at least until June 14.
  • END AUGUST Festivals and fairs may be allowed from this date. 

Main sources of information

Main sources of information

Contact us

Tax: Claus Jochimsen – cjochimsen@kpmg.com
Restructuring: Florian Rieser – frieser@kpmg.com
Legal: Mathias Oberndörfer – moberndoerfer@kpmg-law.com