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Germany Extends Coronavirus Aid, Tax Relief for Businesses

Posted on Dec. 14, 2020

Facing rising virus cases and a new national lockdown, the German Ministry of Finance has announced that the government will expand and extend coronavirus aid for companies, entrepreneurs, and hard-hit tourism and travel industries.

The aid that was available in November to companies, businesses, the self-employed, associations, and institutions that were affected by temporary closures — which have been extended to January 10, 2021 — will be extended to December for the duration of the closures, the MOF said in a December 11 release. Liquidity assistance will be extended until the end of June 2021.

Companies that have had 80 percent of sales affected by temporary lockdowns in October, November, and December are eligible to apply for December aid of up to 75 percent of sales or €1 million, according to the release.

The new measures also extend the deadline for filing 2019 tax returns to March 31, 2021, and extend deferral options. According to the release, taxpayers who are directly negatively affected by the coronavirus crisis may apply to their tax office for a tax filing deadline deferral of June 30, 2021.

Additional tax deferrals up to December 31, 2021, may be granted if taxpayers sign an installment payment agreement. Deferral interest will not be charged in these cases, the release says.

Liquidity assistance (bridging aid) is available to companies, the self-employed, and freelancers hard hit by pandemic mitigation measures. The government has increased the maximum amount of funding per month to €200,000, up from €50,000.

“Restart aid” is available for self-employed people and freelancers working in artistic and cultural sectors, says the release. These workers are eligible for a one-time, flat-rate taxable subsidy of up to €5,000 from now until the end of June 2021.

“This means that self-employed people who are otherwise unable to claim any fixed costs under Bridging Aid III but still had to accept a significant drop in sales can receive 25 percent of the sales for the corresponding pre-crisis period in 2019,” the release says.

Loans from the German state-owned development bank KfW will also be available for companies with up to 10 employees. Depending on a company’s 2019 turnover, it could receive a loan of up to €300,000, according to the release.

Germany has taken many steps to increase aid to businesses and entrepreneurs during the coronavirus crisis, such as increasing tax incentives, cutting VAT, and providing corporate tax relief.

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