Questions & Answers
Answers to common questions.
Curated from our articles on tax advisory, statutory audit and legal services — alphabetical, filtered by audience or topic.
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What was the additional earnings threshold for early retirees raised to in 2020?
Due to the coronavirus crisis, the annual additional earnings threshold for early retirees was raised to EUR 44,590 until the end of 2020. This was intended to allow early retirees to support systemically relevant sectors without a pension reduction.
As of: March 2020
On what legal basis was the Corona Emergency Program for consulting costs established?
The BMWi (Federal Ministry for Economic Affairs and Energy) had supplemented its existing framework directive on the promotion of entrepreneurial know-how with a Corona module, thereby creating an emergency program. Implementation was handled by the Federal Office for Economic Affairs and Export Control (BAFA) with support from the DIHK coordination office.
As of: March 2020
Until when can Bridging Aid II be applied for, and by whom?
The application deadline runs until 31 January 2021. Applications must be submitted via the portal www.ueberbrueckungshilfe-unternehmen.de by a registered examining third party, i.e. a Steuerberater (German Certified Tax Advisor), Wirtschaftsprüfer (German Statutory Auditor), or sworn auditor. In the final settlement, not only repayments but also additional payments will be possible in future.
As of: November 2020
Until when could applications for Überbrückungshilfe II (Bridging Aid II) be submitted?
The application deadline for the second phase of the Überbrückungshilfe (September to December 2020) ended on 31 December 2020. Applications could be filed from 26 October 2020 onwards.
As of: September 2020
What was the application deadline for the NRW special program Digital Retail 2020?
The application deadline was 15 September 2020. Applications could be submitted to Projektträger Jülich (PtJ).
As of: July 2020
Until when could amendment applications for Bridging Aid I (Überbrückungshilfe I) be submitted?
Amendment applications for Bridging Aid I (covering May to August 2020) could be submitted until 30 November 2020, after the original deadline of 30 October 2020 was extended. For applications that had already been decided, a substantiated amendment application can be filed electronically, for example to add eligible costs. Subsequent payments through the final settlement are not provided for; however, actual fixed costs and revenue declines are confirmed in that process.
As of: November 2020
By when must the Corona emergency aid (Soforthilfe) in NRW be settled?
The settlement of the NRW Soforthilfe 2020 is generally scheduled for spring 2021. For any repayment of funds received in excess, there is time until autumn 2021. The original reporting deadline of 30 November 2020 has been postponed.
As of: November 2020
By when did applications for the first phase of the bridging aid (Überbrückungshilfe) have to be submitted?
Applications for the first phase (funding months June to August 2020) had to be submitted by 9 October 2020 at the latest. Retroactive applications after this date were not possible.
As of: September 2020
Up to what amount can coronavirus bonus payments to employees be made tax-free in 2020?
In 2020, employers can pay their employees subsidies and support of up to EUR 1,500 tax-free, either in cash or as benefits in kind. The condition is that the payment is made in addition to the regular wages already owed. The tax exemption applies to all industries, not only to systemically relevant professions.
As of: May 2020
Up to what amount is the Corona special payment to employees exempt from tax and social security contributions?
Under § 3 No. 11a EStG, employers may grant their employees a Corona special payment of up to €1,500 free of tax and social security contributions. Any amount exceeding this threshold must be taxed as regular wages. The payment can be provided either as a cash benefit or as a benefit in kind.
As of: September 2020
Can a previously promised voluntary special payment be converted into a Corona bonus?
No. If an entitlement to a special payment already existed before 1 March 2020 — for example, through a contractual provision, even if labeled as voluntary — it cannot be converted into a Corona bonus. Such a conversion would constitute a harmful salary conversion. However, genuinely voluntary payments without any entitlement may be replaced by the Corona bonus.
As of: September 2020
Are employees allowed to stay away from work out of fear of infection?
No. Employees may only stay away from work if they are actually unable to work. A mere fear of possible infection at the workplace is not sufficient. Unexcused absence may result in employment law consequences such as a formal warning or termination.
As of: March 2020
Are solo self-employed individuals allowed to claim a flat rate for living expenses?
Yes, solo self-employed individuals, freelancers, and owners of sole proprietorships and partnerships actively working in the business may claim a one-time flat rate of EUR 2,000 for the months of March and April to cover living expenses or a notional entrepreneur's salary. Requirements are: an initial application filed in March or April 2020, no claim for ALG II (unemployment benefit II) for these months, and no use of the emergency programme for artists.
As of: May 2020
For what period does the increased additional earnings limit of EUR 44,590 apply?
The increased additional earnings limit of EUR 44,590 applies on a temporary basis until the end of 2020. Thereafter, the regular limit of EUR 6,300 per year will resume, unless a further statutory extension is enacted.
As of: March 2020
Are there alternatives for subsidized business consulting despite the suspension of the Corona module?
Yes, you can fall back on the regular funding program for promoting entrepreneurial know-how, provided the general requirements are met. This regular module continues to exist independently of the special Corona program and is administered through the BAFA.
As of: March 2020
Does the reduced VAT rate of 7% also apply to beverages in the hospitality sector?
No, the temporary reduction of the VAT rate to 7% applies exclusively to food in the hospitality sector. Beverages remain subject to the standard VAT rate of 19%. Hospitality businesses must therefore record food and beverages separately for VAT purposes.
As of: May 2020
Which law governs the VAT reduction for the restaurant industry?
The legal basis is found in the Corona-Steuerhilfegesetz (Corona Tax Assistance Act), which was adopted by the Federal Cabinet on 6 May 2020. It contains several tax relief measures to address the economic consequences of the coronavirus crisis, including the application of the reduced VAT rate to restaurant and catering services.
As of: May 2020
Can the suspension of the obligation to file for insolvency be extended beyond 30 September 2020?
Yes, a regulatory authorization for the BMJV is planned, allowing the measure to be extended until 31 March 2021 at the latest.
As of: March 2020
Können Empfänger der NRW-Soforthilfe freiwillig schon 2020 abrechnen?
Ja, das Land NRW eröffnet Soforthilfe-Empfängern Ende November per E-Mail die Möglichkeit, noch im laufenden Jahr abzurechnen und gegebenenfalls zu viel erhaltene Mittel zurückzuzahlen. Dies ist insbesondere für jene relevant, die die Rückzahlung steuerlich noch in 2020 geltend machen wollen. Mit einem Klick erhalten sie Zugriff auf die Berechnungshilfe und das Rückmelde-Formular.
As of: November 2020
Can mini-jobbers receive the tax-free Corona bonus without losing their mini-job status?
Yes. Under Section 1 (1) No. 1 of the Sozialversicherungsentgeltverordnung (Social Security Contribution Ordinance), the Corona bonus does not count as remuneration for social security purposes. It can therefore also be paid to marginally employed staff without affecting the EUR 450 threshold or jeopardising their mini-job status.
As of: September 2020
Can personnel costs be deducted when settling the Corona emergency aid?
Yes, personnel costs can be deducted retroactively from income, provided they were necessary to generate this income and were not covered by other benefits such as short-time work compensation (Kurzarbeitergeld). This adjustment was made because many businesses reopened after the easing of restrictions in May and June 2020, which would otherwise have resulted in calculated liquidity surpluses.
As of: August 2020
Can social security contributions be deferred due to coronavirus?
Yes, employers can apply for a deferral of social security contributions (health, unemployment, pension, and long-term care insurance) until June 2020. No deferral interest will be charged. The application should be submitted promptly, as contributions are regularly due on a monthly basis.
As of: March 2020
Can tax prepayments be reduced due to the Corona crisis?
Yes, applications can be filed to reduce or provisionally suspend ongoing prepayments for corporate income tax, trade tax, and personal income tax. These applications can be submitted electronically without complications and are generally processed by the tax authorities quickly and without issues.
As of: March 2020
Can students and pensioners apply for the Corona emergency aid?
Yes, status as a student or pensioner is irrelevant. What matters is that the person was active in the market as a self-employed entrepreneur on 31 December 2019 and is independently carrying out a commercial or professional activity within the meaning of § 2 UStG at the time of application.
As of: March 2020
Can consumer and home construction loans be deferred during the coronavirus crisis?
Yes. Consumer loans and home construction loans with installments due within a defined period can be deferred for up to six months. Payments need not be made during this time but can be settled later. Landlords facing liquidity problems due to rental losses can also temporarily defer their construction loans without paying interest or principal.
As of: March 2020
Does the special VAT prepayment (1/11) still have to be paid?
No, the special VAT prepayment of 1/11 for the permanent filing extension does not currently have to be paid. The one-month filing extension will still be granted. Amounts already paid can be refunded upon informal application to the tax office.
As of: March 2020
Have all BAFA funding programmes for business consulting been discontinued?
No, only the special Corona module has been discontinued. The other BAFA programmes promoting entrepreneurial know-how remain in place and can be used as usual.
As of: June 2020
Should the Corona emergency aid feedback forms still be completed and returned?
No, recipients of the NRW emergency aid should not complete or return the feedback forms for the time being. We recommend waiting for the nationwide clarification on the settlement procedures and consulting your responsible Steuerberater (German Certified Tax Advisor) on a case-by-case basis.
As of: July 2020
Should recipients of the NRW emergency aid already transfer money back now?
No, until the official start of the feedback procedure, refunds to the granting authorities or to the state treasury should be avoided. Repayments should only be made after receiving the request e-mail and via the official feedback form.
As of: November 2020
From which sender address does the email regarding the NRW emergency aid feedback come?
The information on the feedback procedure will be sent at the end of November from the address noreply@soforthilfe-corona.nrw.de. Recipients should wait for this email before taking any action. Anyone who does not wish to settle accounts early does not need to do anything for now.
As of: November 2020
When does a compensation claim arise under § 29 UStG in the event of VAT rate changes?
A compensation claim exists if the service is rendered after 30 June 2020 and the underlying contract was concluded before 1 March 2020 (i.e., more than four months prior to the rate change taking effect). However, a fixed-price agreement or other contractual provision excludes the claim. Both contracting parties may demand compensation for the resulting VAT surcharge or relief.
As of: July 2020
When do employees receive the increased benefit rate of 67 percent?
The increased rate is granted if at least one child eligible under § 32 Abs. 1, 3 to 5 EStG lives in the household and a child allowance is registered on the income tax card. Child allowances are only entered for tax classes I, II, III, and IV. For adult children, the allowance can be applied for at the tax office under certain conditions (e.g., vocational training).
As of: March 2020
When is a company considered an "undertaking in difficulty" and therefore not eligible to apply?
Under Art. 2 No. 18 of Regulation (EU) No. 651/2014, this applies if, in the case of limited liability companies (e.g. GmbH, UG, founded before 31.12.2016), more than half of the share capital has been lost due to accumulated losses; if, in the case of partnerships (KG, OHG), more than half of the equity capital has been lost; if insolvency proceedings are pending or the conditions for such proceedings are met; or if rescue aid has not yet been repaid or restructuring aid is still ongoing. If any of these conditions applied as of 31.12.2019, the subsidy may not be requested.
As of: March 2020
Was business consulting provided by Steuerberater eligible for funding?
Yes. Under the Corona module of the framework guideline promoting entrepreneurial know-how, business consulting provided by Steuerberatern (German Certified Tax Advisors) was explicitly eligible for funding. The prerequisite was that the company had been affected by the Corona pandemic.
As of: March 2020
Why has North Rhine-Westphalia halted the emergency aid reporting procedure?
The NRW state government has identified several problematic accounting requirements and forwarded the relevant points to the federal government. The federal government has asked the states for their comments. Until a uniform federal solution is in place, NRW is pausing the procedure to avoid disadvantages for aid recipients.
As of: July 2020
Why can repaying the emergency aid still in 2020 be tax-advantageous?
The Corona emergency aid (Soforthilfe) constitutes taxable business income. If excess funds are repaid within the same fiscal year, the repayment directly reduces the 2020 profit. For this reason, many recipients wish to settle accounts still in 2020 so that the repayment is recorded in the current assessment period.
As of: November 2020
Why can § 616 BGB exclude the employer's right to reimbursement?
Under § 616 BGB, an employee retains their entitlement to wages if they are prevented from working for a relatively short period through no fault of their own. If this provision applies, an independent employment law claim for continued wage payment exists, meaning there is no loss of earnings within the meaning of § 56 IfSG. In such cases, the employer cannot claim reimbursement from the authority and must bear the wage costs themselves.
As of: November 2020
Why is the obligation to file for insolvency being suspended?
In the current situation, applications for public aid or financing and restructuring negotiations often cannot be completed within the statutory three-week deadline. The suspension prevents companies from having to file for insolvency solely for this reason.
As of: March 2020
Why was the reduced VAT rate for restaurants and food service businesses introduced?
Restaurants, cafés, and similar food service businesses have been hit especially hard by the COVID-19 crisis, in part due to official restrictions on their operations. The reduced VAT rate is intended as a kick-start measure, enabling these businesses to quickly return to operating on their own once restrictions are eased.
As of: May 2020
Why was the application deadline for the first phase extended?
Due to significant processing times and technical difficulties with the online procedure – such as delays in delivering the required PIN – the original deadline of 31 August 2020 was extended to 30 September 2020. Steuerberater associations had strongly advocated for this extension.
As of: September 2020
Why was BAFA's coronavirus consulting subsidy exhausted so quickly?
Demand far exceeded all expectations. At the same time, according to reports by the Süddeutsche Zeitung, there was a significant number of abusive and partly fraudulent applications. This overstretching of the program contributed to the funds being used up prematurely.
As of: June 2020
What does the requirement of not having been in difficulty as of 31 December 2019 mean?
Under the EU definition, a company is considered not to be in difficulty if, as of the reference date of 31 December 2019, its principal bank was not aware of any unsettled payment arrears exceeding 30 days. Only such companies are eligible to apply for KfW Corona assistance. In addition, at the time of application a positive going-concern forecast must exist, assuming a normalization of the situation.
As of: March 2020
What does overcompensation mean in the context of Corona emergency aid, and what are its consequences?
Overcompensation occurs when the applicant has received more in subsidies than the actual loss incurred, i.e. the revenue shortfall caused by the Corona crisis minus any saved costs. The excess amount must be repaid. At the end of the approval period, all recipients are contacted and must document the use of the funds using a standard form.
As of: May 2020
What is Kurzarbeitergeld (short-time work allowance) and how high is the basic benefit?
Kurzarbeitergeld is a benefit provided by the Agentur für Arbeit (Federal Employment Agency) that replaces part of the net wage loss during a temporary reduction in work. Employees without children receive 60 percent, and employees with children 67 percent of the lost net pay. The aim is to ease the burden on employers and to avoid dismissals.
As of: March 2020
What happens to applications already submitted for the BAFA Corona consulting subsidy?
Only applications for which the BAFA has already issued a preliminary approval (Inaussichtstellung) will be granted and paid out. Otherwise, consideration is only possible through a follow-up procedure, provided that an eligible proof of use is submitted and sufficient budget funds are available.
As of: June 2020
What does the Corona Tax Relief Act of 6 May 2020 regulate?
The Corona Tax Relief Act, adopted by the Federal Cabinet on 6 May 2020, comprises several tax relief measures. Key elements include the temporary reduction of the VAT rate for restaurant meals to 7%, along with flanking provisions designed to address the economic impact of the Corona pandemic on businesses and employees.
As of: May 2020
Which expenses are eligible for funding under the Sonderprogramm Digitaler Einzelhandel NRW (Special Programme for Digital Retail NRW)?
Eligible expenses include consulting services for the initial implementation or expansion of digital technologies in retail. In addition, project-related material expenses can also be subsidised.
As of: July 2020
What relief measures were adopted for families and single parents?
A one-time child bonus of €300 is paid for each child eligible for child benefits. The relief amount for single parents is temporarily increased for two years from €1,908 to €4,000. In addition, a bonus system is intended to strengthen the supply of apprenticeship positions at small and medium-sized enterprises.
As of: June 2020
What compensation do parents receive for loss of earnings due to school or daycare closures?
Under the revised Infection Protection Act, affected parents receive 67% of their net income, capped at €2,016 per month and for a maximum of 6 weeks. Eligible are parents of children under 12, provided no emergency care is available, working from home is not reasonable, and overtime has already been used up. No payment is made during school holidays.
As of: March 2020
Which simplified access rules for short-time work benefits (Kurzarbeitergeld) have applied since 16 March 2020?
It is sufficient if 10 percent of the workforce is affected by the loss of work (instead of one third). Social security contributions are fully reimbursed to employers by the Bundesagentur für Arbeit. Temporary agency workers are also eligible, and negative working time balances no longer need to be built up.
As of: March 2020