On 1 April 2020, the German Ministry of Finance (“MOF”) published a FAQ letter informing tax payers on the tax reliefs available in relation with the ongoing Covid-19 economic downturn (see link). In this FAQ letter, the MOF answers questions in relation to following topics:
- General procedural aspects when requesting tax related support: overview of the reliefs available (deferment of tax payments, non-enforcement of pending tax payments, reduction of advance tax payments, (partial) refund of VAT advance payment) and details regarding the prerequisites (when is a tax payer affected by the current crisis, what tax payers may apply, form of the application, etc.).
- Deferral of tax payments: form of the application, time periods covered by the deferment, what tax payments may be deferred, etc.
- Questions related to the remission of pending tax liabilities, tax audits and payroll taxes.
In order to be entitled to one or more tax reliefs in place, a plausible explanation that the current Covid-19 crisis has significant negative impact on the business should be sufficient according to the MOF (sect. II. no. 2). In particular for obviously affected industries (e.g. catering trade, non-eCommerce retail sector, and others), it is expected that the respective applications should be approved by the competent tax offices with no detailed analysis.
Particularly interesting for VAT practitioners is the remark of the MOF that besides the possibility of the deferment of pending VAT payments free of interest charges (sect. III. no. 6 and 8), the payment made for getting the permanent extension of the filing deadline may be (partially) refunded upon special application (sect. II.1. last bulletpoint and sect. II.3, for further information on the permanent extension of the filing deadline see also VATupdate).
Author: Tim König, M.Sc., Steuerberater
