As part of the relief measures introduced in response to the coronavirus pandemic (Corvit-19, SARS-CoV-2), tax relief is an essential component. Here is an overview of the current measures:
Tax deferral: (tax office)
Tax claims that are already due and will become due in the future can be deferred until December 31, 2020. The prerequisite for this is an application to the relevant tax office, explaining the personal effects of the coronavirus pandemic and the financial circumstances. Particularly with regard to the latter point, the requirements and decisions of the tax offices still vary greatly. In some cases, the tax office requires a genuine emergency to be demonstrated and expects the available assets to be used first. The deferral should (but does not have to) be interest-free.
Deferment is not possible for wage tax (if wages have been paid) or for withheld sales tax in the deduction procedure.
The special payment for current advance VAT payments already paid in February in the event of a permanent extension will be reimbursed upon request. In some federal states, no further proof of particular impact from the coronavirus pandemic is required for this.
Tax deferral: (trade tax)
Each municipality/city is responsible for this and can decide on applications for deferral itself. The city of Koblenz, for example, is very generous with (provisional) deferrals if an affectedness by the Corona crisis is demonstrated. The city of Mayen has issued a similar guideline to the city treasury.
The tax offices remain (primarily) responsible for reducing advance payments for trade tax, so that corresponding applications must be submitted to them, but they should also be processed quickly and favorably.
Advance tax payments:
Advance tax payments for 2020 will be reduced or (as the case may be) suspended altogether upon request. These requests must be justified. However, the examination should also be carried out generously and sympathetically here.
Enforcement:
Enforcement measures by the tax offices are to be suspended until December 31, 2020 if the taxpayer is directly and significantly affected by the coronavirus pandemic. Any resulting late payment penalties must (mandatorily!) be waived. Here, too, it is advisable to notify the tax office of the circumstances immediately.
Social security contributions:
These are still due and must be paid. The National Association of Statutory Health Insurance Funds has called on the health insurance funds to be more generous when considering a deferral request if it can be shown that the person is significantly affected by the coronavirus pandemic and that this has created a financial emergency. However, other aid from the aid packages that have been set up must be used and exhausted as a matter of priority, since the contributions are needed to finance the health service and thus directly benefit the fight against Corvit-19. However, the health insurance funds should also waive late payment surcharges, reminder fees and enforcement measures for the contribution months of March and April 2020. Such additional claims should be waived upon request if the company is particularly affected by the coronavirus pandemic.
An application for deferral or remission must be submitted to each health insurance fund to which contributions are due.
Please refer to the special information on short-time working compensation.
Deadline extensions:
Tax advisors are to receive an extension for outstanding annual tax returns, retroactively from March 1, until May 31, 2020. This also applies to those declarations that should have been submitted by February 28, 2020. However, an application for an extension must be submitted. Late payment penalties will not be imposed. Any default interest already set will be canceled upon request.
Administrative processing:
The tax offices have been instructed to process applications for reductions in advance payments, deferrals, extensions and waivers of late payment surcharges and enforcement measures as a matter of priority and as quickly as possible. Applications can be submitted by fax, electronically or by post. Visits are to be limited as far as possible.
The tax offices have suspended or interrupted all external and company audits and will not start any further ones in the near future.
Other liquidity assistance:
Companies should review their organizational processes to exploit possible liquidity reserves. The irrecoverability of debts leads to a correction of the value added tax and thus to a refund. Input tax can be claimed earlier through earlier invoice verification or receipt. Higher input tax refunds should be coordinated with the tax office at an early stage.
The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.