On 13 March 2020, the German government announced extensive measures to overcome the current crisis. These are essentially aid programmes to obtain loans from KfW and tax policy instruments.
"As few companies as possible should suffer financial hardship as a result of the epidemic and as few jobs as possible should be lost.
In order to preserve jobs, the short-time working scheme will be adjusted by the beginning of April. Affected companies can have wage costs and social security contributions paid by the Federal Employment Agency, temporary workers will be included in future and only 10% of employees need to be affected by short-time working for the regulations to apply.
We will set up a protective shield worth billions for businesses and companies. The volume of these measures will not be limited. For small and medium-sized enterprises in particular, this will alleviate financial hardship through no fault of their own. Companies will be given access to loans and guarantees from the state via their house banks. KfW Bank."
With regard to the taxation procedure, the following measures are envisaged and should be examined immediately by the companies concerned:
- Facilitation of tax deferrals
- Waiver of late payment penalties and enforcement measures for those directly affected by the crisis
- Easier adjustment of tax prepayments
In terms of both lending and tax relief, it is quickly recognisable that the German government is initially concerned with measures to secure liquidity and that there are no plans to directly reduce the effective tax burden - as already demanded by certain sectors.
It remains to be seen whether the corresponding administrative instructions will actually provide unbureaucratic "first aid" and it is therefore advisable to prepare corresponding applications etc. professionally now.
Your TAXGATE team will support you in implementing the announced tax policy measures and will work closely with external service providers if KfW funds are to be requested.
