The German Federal Ministry of Finance has issued a letter dated 19 March 2020 relating to deferral and enforcement measures:
VAT is administered by the state tax authorities on behalf of the Federal Government. Thus the aforementioned framework is subject to individual handling at the level of the state tax authorities. As a consequence the application forms to be utilized will differ, e.g. between Bavaria and Hesse.
On top the measures indicated above, state tax authorities have also established support mechanisms and may (partially) refund the special advance payments that have been paid in order to be granted a permanent extensions of the filing deadline for the preliminary VAT returns.
On 3 June 2020 the leaders of the black-red governing coalition have agreed on a so-called economic and crisis management package in response to the consequences of the Corona crisis. This 31-point package provides a cut in VAT rates and an extension of the due date for paying import VAT to the 26th of the following month.
Starting on 1 July 2020, the regular VAT rate shall be reduced from (currently) 19% to 16% and the reduced VAT rate from (currently) 7% to 5%. The measure shall be limited in application until December 31, 2020.
At the present time, there is still no legislative proposal and thus further details are missing.
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