The effect of the coronavirus and the state interventions in our daily lives pose unprecedented challenges for companies.

TLI Steuerberater currently advises its clients to safe liquidity. To protect companys regardless of their size, the federal and the state governments have taken numerous measures, from aid programs and credit programs to a Corona shield and tax aid.

Not all the measures adopted by the government are equally sensible or applicable to all companies economically affected by the Corona pandemic. Aid wrongly claimed can be regarded as subsidy fraud or tax evasion.

The TLI Steuerberater recommends that companies wich are economically affected by the coronavirus examine which measures are appropriate for their case in order to be able to successfully survive the crisis.

In this Corona special focus on tax relief for companies, the TLI tax advisors present the most important tax breaks for companies of any legal form to improve their liquidity situation.

Tax breaks for companies

Companies of all sizes affected by the Corona crisis can claim the following tax breaks to improve their liquidity.

1. Interest-free tax deferral

Taxes wich are already fixed, such as vat, business tax, income tax, corporation tax, solidarity surcharge and church tax can be deferred until 31 December 2020 at the most. Therefore a deferral application is required. From the experience of TLI Steuerberater with deferral applications for their clients, they can report that they will be processed more quickly if the application meets the formal requirements set by the financial administration. In addition, the tax authorities waive deferral interest for the duration of the deferral.

2. Reduction and reimbursement of advance tax payments

The quarterly advance payments of business tax, income tax and corporation tax may be reduced on request in a simplified procedure without individual proof. Here, advises Christian Dobner, Managing Partner of TLI Steuerberater also his cleints to comply with the formal requirements for submitting applications. With the next business tax advance payment due on 15 May 2020 and the next income tax or corporation tax prepayment is due as early as 10 June, TLI’s tax advisors recommend that applications be submitted soon, provided that a decline in profits or a liquidity shortage due to the Corona crisis is already foreseeable.

Tip: For the clients of the TLI Steuerberater, who are particularly affected by the current crisis and therefore do not expect any profit for the year 2020, TLI’s tax advisors has requested that the tax advances wich are already made in 2020 be reimbursed. The requests have always been granted. This provides our clients with additional liquidity.

3. Reimbursement of special VAT advance payment

The majority of companies does at the beginning of the year, a special advance payment on the sales tax incurred for the current year. This extends the deadline for the submission of monthly VAT pre-registrations by one month (so-called permanent extension). In order to keep the companies wich are affected by the Corona pandemic liquid, the special VAT advance payment made shall be reduced or reimbursed in full on request. Please note that the application must be submitted electronically and in accordance with the requirements of the respective state government. The requests made by the TLI tax advisors have always enabled the full repayment of the special advance payment for their clients.

4. Extension of the deadline for tax declarations

For all tax declarations, such as the payroll tax declaration or the VAT pre-registrations, which are to be registered up to “10”, a time limit may be granted on request. For registrations due on 10 April (for example, the payroll tax declaration for March 2020 or the VAT pre-registration for February or March 2020), a deadline of 2 months until 10 June 2020 is granted upon request.

5. Enforcement deferral

Payroll taxes and capital gains taxes cannot be deferred. If they are notified and are already due, deferral of enforcement may be granted on request. Enforcement measures shall be waived during that time.

6. Tax returns for 2018

The tax returns for 2018 had to be submitted to the tax authorities by 28 February 2020 at the latest. In principle, it was not possible to extend the time limit for filing tax returns. Delays were virtually inevitable. If it was not possible to file the tax returns for 2018 on time due to the economic damage caused by the Corona crisis or the associated high workload, the extended retroactively until 31 May 2020 at the most, can be requested. The application must be justified conclusively. The Managing Partner of TLI, Christian Dobner, can report in the meantime that to the applications made by them was granted in all cases. Delay surcharges should be remitted at the request of.

7. Tax-free money and material achievements to EUR 1,500.00

Money and material achievements the employers between the 1st of March, 2020 and the 31st of December, 2020 in addition to the regular wage on account of the Corona crisis to her employees pay, are wage-expensive-free up to an amount of EUR 1,500.00 and are free of social security and can be paid in addition to the other customary wage-tax-free bonus payments.

8. Special provision for border commuters

For cross-border commuter who normally commute every day from her residence in another state to the work, can an increased activity in the home office release disadvantageous tax results. Details are set out in the respective double taxation agreements between Germany and the foreign state to which the worker commutes. If a certain number of days are exceeded on which the State of activity is not actually visited, this may lead to a partial change in the right to tax.

On border commuters between Germany and France, additional days in the home office have no tax effect.

On cross-border commuters between Germany and, for example, Austria, Luxembourg or the netherlands, more days in the home office can lead to a change in the tax situation of the person concerned. With these countries, the federal government is seeking agreements to prevent the permanent disadvantages. It was possible to reach an agreement on this matter with Luxembourg on 3 April. This agreement entered into force on 4 April and applies to working days in the period from 11 March 2020 to 30 April 2020.

In the series Corona-Special, TLI Steuerberatungsgesellschaft will continue provide informations about further tax reductions for companies and about the following main topics:

  • Short-time work and social insurance
  • Subsidies
  • Credits
  • Specific support for small enterprises
  • Special support for start-ups

If you have any questions about national or international tax issues, please contact us.

The German federal government and the German state governements passed several aid measures like credit programmes a so-called Corona safety shield and tax aid measures. The passed aid measures are not for every company which is economically affected by the Corona-pandemic equally useful and applicable. We recommend the companies which are economically affected by the Corona-pandemic zu review carefully, which measure makes sense for the specific case to survive the crisis successfully.

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