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Tax Advice

Tax deferrals for companies in times of Corona

As fiscal liquidity aid, the tax authorities grant tax deferrals to companies suffering from loss of profits and sales as a result of the corona pandemic.

On 19 March 2020, the Federal Mini­s­try of Finance (BMF) pub­lis­hed the fol­lo­wing gui­de­li­nes for the defer­ral of taxes to sup­port com­pa­nies in the corona cri­sis:

  • „Tax­pay­ers who are directly and not incon­s­i­de­r­a­bly affec­ted by the eco­no­mic con­se­qu­en­ces of the coro­na­vi­rus may sub­mit app­li­ca­ti­ons for defer­ral of taxes already due or beco­ming due by 31 Decem­ber 2020. This app­lies to income tax, cor­po­rate income tax and value added tax. The tax offices are requi­red to grant app­li­ca­ti­ons even if the damage cau­sed by the coro­na­vi­rus can­not be pro­ven in detail in terms of value. No high demands are to be made on the con­di­ti­ons/requi­re­ments/ tax defer­ral.
  • As a rule, the tax offices waive defer­ral inte­rest.
  • App­li­ca­ti­ons for defer­ral of taxes due after 31 Decem­ber 2020 must be jus­ti­fied.

Several federal sta­tes have already pro­vi­ded app­li­ca­tion forms. Other­wise, accor­ding to the offi­cial press relea­ses, app­li­ca­ti­ons should be made in wri­ting and hand­led unbu­reau­c­rati­cally. It should be noted that the app­li­ca­tion must also include a descrip­tion of the indi­vi­dual eco­no­mic effects of the coro­na­vi­rus on the com­pany con­cer­ned. Even if the tax aut­ho­ri­ties are instruc­ted not to place high demands on this proof, it is nevert­he­less indi­s­pensa­ble in order to docu­ment the direct and not insig­ni­fi­cant impact of the corona cri­sis.

Note

For with­hol­ding taxes, such as income tax and capi­tal gains tax, a tax defer­ral is in prin­ciple not envi­sa­ged. Accor­ding to reports, the finance mini­s­tries of the federal sta­tes, in coor­di­na­tion with the Federal Mini­s­try of Finance, are wor­king on a gui­de­line for the tre­at­ment of income tax, which is expec­ted to be pub­lis­hed shortly. Howe­ver, it may already be pos­si­ble to obtain a sus­pen­sion of exe­cu­tion.

Also pub­lis­hed on 19 March 2020 were identi­cal dec­rees of the sup­reme tax aut­ho­ri­ties of the federal sta­tes on accom­panying trade tax mea­su­res. App­li­ca­ti­ons for defer­ral of trade tax must be sub­mit­ted to the muni­ci­pa­li­ties res­pon­si­ble for trade tax, and merely to the tax office in cases where the res­pon­si­bi­lity for trade tax does not lie with the muni­ci­pa­li­ties (this app­lies in parti­cu­lar to city sta­tes).

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