Law and regulation of Covid-19 tax relief in Germany

Value Added Tax

  • Extension for VAT payments / acceptance of instalment payments
  • Waiver of interest payments
  • Waiver of late payment fines / temporary suspension of enforcement measures
  • Temporary reduction of the VAT rate from 19 percent to 16 percent and of the reduced VAT rate from currently 7 percent to 5 percent

Corporate Income Tax

  • Waiver of late payment fines / temporary suspension of enforcement measures
  • Reduction of advance payments of corporate income tax / income tax and business tax for 2020
  • Extension for tax payments / acceptance of instalment payments

Social Security Contributions or Payroll Tax

  • Collection measures with respect to payroll taxes may be suspended
  • Suspension of payroll taxes maybe applied for

Other relief measures

  • State Owned Bank (KfW) is to finance gaps
  • Package of measures to mitigate the impact of the coronavirus; Corona Tax Aid Act I and II ("Corona Steuerhilfegesetze")

Additional comments

  • In most of the cases, taxpayers have to provide evidence that they are affected by the current Corona crisis.
  • However, significant simplifications are foreseen with regard to this evidence (e.g., simple statements or special forms).