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German Cabinet Proposes Tax Help Package for Easing Lockdown

May 6, 2020, 3:10 PM

German communes and companies would get additional support under a draft coronavirus tax relief measure approved by the government on Tuesday.

The Parliament is expected to consider the draft measure in the coming weeks.

  • Municipalities would be given two more years, until Dec. 31 2022, to comply with the country’s new sales tax laws, according to the measure.
  • Provisions in the conversion tax law would be simplified. For example, when a company legally changes its form the retroactive tax period would be extended from eight to 12 months.
  • Short-term work benefit subsidies provided to help compensate for lost wages from March to December 2020 will be tax exempt up to 80% of the difference between the target remuneration and the actual remuneration.
  • Value-added tax on food served by restaurants and catering services would be reduced to 7% from 19% after June 30 and before July 1, 2021.

Check out Bloomberg Tax’s country-by-country roadmaps covering direct and indirect tax developments.

To contact the reporter on this story: Barbara Tasch in Zurich at correspondents@bloomberglaw.com

To contact the editors responsible for this story: Meg Shreve at mshreve@bloombergtax.com; Vandana Mathur at vmathur@bloombergtax.com