Proof of the Corona Bonus

In an FAQ on the subject of Corona, the German Federal Ministry of Finance answers, among many other questions, how employers must prove that a Corona special payment is tax-free.

The German Federal Ministry of Finance provides a question-and-answer catalog on numerous tax topics relating to Corona on its website, which is updated on an ongoing basis. This also deals with the Corona bonus of up to 1,500 euros, which employers can pay their employees tax-free in the period from March 1, 2020 to March 31, 2022. In it, the Ministry explains that for the tax exemption to apply, it must be evident from the contractual agreements between employer and employee or other agreements and declarations that it is intended to be the tax-free Corona Bonus and that the conditions applicable to it are met.

The tax-exempt benefits must be recorded in the payroll account. The connection of the allowances and benefits with the Corona crisis may result from contractual agreements between the employer and the employee, collective bargaining agreements, a company agreement or declarations by the employer. Declarations by the employer are, for example, recognized as individual pay slips or transfer receipts in which the Corona special payments are shown as such.