For many experiencing the stress of managing a business day-to-day through this pandemic, it is important to understand that not all relief will be direct payouts or grants, or special access to loans. Germany has demonstrated through the course of the pandemic that they are willing to find ways to support small businesses, freelancers and the self-employed and therefore have adapted the ever-complex tax system to provide relief. Here we detail what this looks like, and what you can expect. No matter if you are expecting restart help or you have applied for digitalisation support, or another form of bridge funding - chances are the government is providing an offer of assistance that will likely apply. And, if you are already wondering what happened heading into 2021, you can read about that on the blog too.
Tax assistance offers for the self-employed, freelancers and companies
The payment period for the tax-free corona allowance for employees has been extended
On June 8, 2021, the "Law to modernize the relief of withholding taxes and the certificate of capital gains tax" of June 2, 2021 included, amond other things, the payment period for tax-free grants and support (already extended to June 30, 2021 with the Annual Tax Act 2020) was extended again to March 31, 2022 . The tax-free total amount (also payable in several installments) of a total of 1,500 EUR does not increase. Only the period for granting the amount is stretched.
Extension of the tax return period and the interest-free waiting period
In view of the exceptional situation caused by the corona pandemic, the declaration deadlines in cases discussed and the interest-free waiting period for the 2019 assessment period have been extended by six months by law of February 15, 2021. In a letter dated April 15, 2021, the Federal Ministry of Finance answered various application questions resulting from this (including the delay surcharge). The extension of the regular 15-month interest-free waiting period for the taxation period 2019 by six months - affects both reimbursement and subsequent payment interest.
The "Law for the Implementation of the Anti-Tax Avoidance Directive" of June 25, 2021 extends the deadlines for tax returns 2020 for advised taxpayers by 3 months to the end of May 2022. Unadvised taxpayers will then have three months more time for their 2020 tax return, i.e. until the end of October 2021. Due to this extension of the deadline for the 2020 tax period, the interest-free waiting period, which is generally 15 months, will also be extended by three months. This applies equally to interest on reimbursement as well as interest on arrears.
Third Corona Tax Assistance Act
The Third Corona Tax Aid Act, published in the Federal Law Gazette on March 17, 2021, initiated tax relief to cope with the corona crisis. For example, the applicable tax loss carryforward for 2020 and 2021 will be doubled to a maximum of 10 million euros (or 20 million euros in the case of joint assessment) as well as the reduced VAT rate (of 7 percent) currently limited to June 30, 2021 for meals in the Gastronomy extended until December 31, 2022.
More on this later, but first, a look at some of the items already in effect.
Trade tax measures to take into account the effects of the corona have been extended
The tax authorities also considered with regard to the trade tax, the impact of Corona pandemic and the measures taken so far in determining the trade tax amounts for the purpose of advance payments has extended until the end of the 2021st When applying for a deferral or waiver of trade tax, however, it should be noted that the municipalities are generally responsible for this.
Reserve for replacement purchases - Temporary extension of reinvestment periods
As of January 13, 2021, the deadlines for replacement or repair in the event of damage if the stated deadlines would otherwise expire in a financial year ending after February 29, 2020 and before January 1, 2021.