Further aid measures in the Corona crisis

The German government has adopted further aid measures in tax and social legislation for those affected by the Corona crisis.

Politicians are constantly responding to the Corona crisis with new measures to cushion the economic impact on citizens and businesses. In the last issue, we already presented the emergency measures for businesses adopted in March. In April and May, the German government and representatives of the grand coalition agreed on further measures to safeguard the economic existence of businesses and employees.

• Loss Offset: In order to secure their liquidity, companies and landlords are allowed to offset expected losses for 2020 against advance tax payments made for 2019. The offset applies to a maximum of 15 % of the profit from 2019. In addition, a maximum of 1 million euros (in the case of married couples, a maximum of 2 million euros) can be offset. This excludes trade tax, in order not to further burden the finances of municipalities. The Federal Ministry of Finance has already regulated the details, about which the article "Subsequent reduction of advance payments for 2019" provides information.

  

• Sales tax: Until now, the full VAT rate of 19 % applies to meals consumed on site in the catering industry. For a limited period of one year, the reduced rate of 7 % will generally apply to meals from July 1, 2020, regardless of whether they are consumed on site, picked up or delivered.

• Short-time allowance: From May 1 until the end of the year, employees on short-time work will be allowed to earn more. Short-time allowance will also be increased for a limited period until the end of the year if the employee loses at least 50 % of working time and the short-time work lasts longer than three months. From the fourth month, 70 % of the lost wages (77 % for parents) will now be paid, and from the seventh month the employment agency will pay 80 % of the lost wages (87 % for parents). In the first three months, the Federal Employment Agency continues to pay only 60 % of lost wages, and 67 % for parents, regardless of the extent of the loss of work.

• Unemployment benefits: Because hardly any new jobs can be found at present, the period of entitlement to unemployment benefit I is to be extended by three months. The extension will apply to those whose entitlement would end between May 1 and December 31, 2020.

• Parental allowance: Parents who experience a loss of income as a result of the Corona measures should not be at a disadvantage when it comes to parental allowance. The periods of reduced income therefore do not reduce the parental allowance, nor do they have a negative impact on the amount of parental allowance in the case of another child. In addition, parents who work in system-relevant occupations can defer their parental allowance months. If they are unable to take their parental allowance months between March 1 and December 31, 2020 due to the Corona crisis, they can still take them until June 2021.