Questions & Answers
Answers to common questions.
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What flexibility exists regarding the cash-basis principle in emergency aid (Soforthilfe) settlement?
For revenues within the funding period, companies may choose to use the date of service delivery instead of the date of payment receipt. This particularly benefits sectors such as skilled trades or trade fair construction, which operate with invoices and payment terms and would otherwise be disadvantaged by delayed incoming payments.
As of: August 2020
What are the consequences of false statements in the application for Corona emergency aid?
False statements leading to an unjustified receipt of emergency aid qualify as subsidy fraud. In addition to repayment of the funds, criminal prosecution may follow. In the application form, the applicant expressly affirms that all information has been provided truthfully and to the best of their knowledge.
As of: May 2020
What deadlines apply to the reporting and repayment of the Corona emergency aid?
The reporting deadline has been uniformly extended to 30 November 2020. Any repayments to the account specified in the notice from the competent Bezirksregierung (district government) must be made by 31 March 2021 at the latest.
As of: August 2020
What deadlines were originally set for the reporting and repayment of the NRW emergency aid?
Originally, the report was to be submitted to the state government via the digital form by 30 September 2020. The self-determined repayment amount would then have been due by 31 December 2020. These deadlines have become obsolete due to the suspension of the procedure.
As of: July 2020
What are the terms of the KfW quick loan for solo self-employed individuals and small businesses?
The KfW quick loan is also available to solo self-employed individuals and companies with up to 10 employees. Through the principal bank, up to EUR 300,000 can be applied for, depending on 2019 revenue. The federal government assumes the full risk and releases the principal banks from liability.
As of: November 2020
What obligations and deadlines apply to the employer when filing a reimbursement claim?
The employer must continue to pay wages to employees affected by the official measure for up to six weeks and can then claim reimbursement of these amounts from the competent authority. The reimbursement application must be submitted within 12 months. The deadline begins at the end of the prohibited activity, the quarantine, or the facility closure.
As of: November 2020
What are the risks of paying a Corona bonus to a controlling shareholder-managing director?
The tax office examines whether the payment is at arm's length or motivated by the shareholder relationship. If a shareholder-related motivation is assumed, a hidden profit distribution arises, which increases the GmbH's taxable income and must be taxed as investment income at the shareholder level. Payment is only advisable if a non-shareholding managing director would receive a comparable bonus.
As of: September 2020
What special rules apply to retail and the travel, events and cultural sectors?
In retail, losses in value on unsellable or seasonal goods (e.g. clothing, fruit, vegetables) qualify as eligible fixed costs, and depreciation on assets can be claimed at 50%. In the events and cultural sectors, internal and external cancellation costs from March to December 2020 are eligible, supplemented by special payments for cancelled events.
As of: March 2021
Which taxes can be deferred during the Corona crisis?
Deferral applications are possible for VAT, corporate income tax, trade tax, and personal income tax. The application process is straightforward, and VAT is also taken into account.
As of: March 2020
What revenue loss is required for Bridging Aid III (Überbrückungshilfe III)?
Eligible applicants are companies with a revenue decline of at least 30% compared to the corresponding reference month in 2019. The additional requirements of Bridging Aid II regarding time periods and degree of impact no longer apply. Access has therefore been significantly simplified compared to the previous regulation.
As of: March 2021
What revenue losses are required for Überbrückungshilfe II (Bridging Aid II)?
Eligible businesses must demonstrate either a revenue decline of at least 50% in two consecutive months between April and August 2020 compared to the same months in the prior year, or an average revenue decline of at least 30% across April to August 2020 compared to the prior-year period. Reimbursement covers 40 to 90 percent of fixed costs on a sliding scale based on the revenue decline, capped at EUR 50,000 per month.
As of: November 2020
Which VAT reduction was decided in the economic stimulus package of 03/06/2020?
From 01/07/2020 to 31/12/2020, the standard VAT rate will be reduced from 19% to 16%, and the reduced rate from 7% to 5%. The reduction is temporary and forms part of the stimulus package aimed at strengthening domestic demand.
As of: June 2020
Which documents must be submitted if the 2019 annual financial statements are not yet available?
If the 2019 annual financial statements are not yet available, the 2018 statements together with a business analysis (BWA) as of 31 December 2019 will suffice. For loan amounts up to EUR 3 million, KfW waives the submission of documents entirely and does not carry out its own risk assessment.
As of: March 2020
What is the requirement for the tax exemption of the 1,500 EUR Corona special payment?
The special payment must be granted in addition to the wages already owed. Converting previously agreed salary or wage components into a tax-free Corona allowance is not permitted. The benefit may be provided as a cash payment or as a benefit in kind.
As of: May 2020
What requirements apply to the suspension of the obligation to file for insolvency?
The grounds for insolvency must result from the effects of the COVID-19 pandemic. In addition, there must be well-founded prospects of restructuring, based either on an application for public aid or on serious financing or restructuring negotiations.
As of: March 2020
What requirements apply under the BAFA consulting subsidy supplementary admission procedure?
Under the supplementary admission procedure (Nachrückverfahren), an eligible proof of use must be submitted. In addition, it is explicitly required that BAFA has sufficient budgetary funds available to grant the approval.
As of: June 2020
What conditions must be met to qualify for the Corona emergency aid?
A significant financial bottleneck caused by the Corona crisis must exist. This is assumed if more than half of the orders have been lost since March 1, revenues have been more than halved compared to the same month of the previous year, official restrictions massively limit the ability to generate revenue, or the funds available are insufficient to cover short-term liabilities. The bottleneck must not have existed prior to March 1, 2020.
As of: March 2020
What requirements must be met for the Corona bonus to be tax-free?
The payment must be made between 01/03/2020 and 31/12/2020 and must be granted in addition to wages already owed, meaning it cannot result from a salary conversion. It must also be paid to mitigate the additional burdens caused by the Corona crisis. A written agreement is strongly recommended.
As of: September 2020
Which new depreciation and investment rules apply for 2020 and 2021?
Movable fixed assets may be depreciated on a declining-balance basis in 2020 and 2021 — with a factor of 2.5 compared to the current straight-line depreciation and a maximum of 25% p.a. In addition, the funding rate of the tax-based research allowance is granted retroactively as of 01/01/2020 and, limited until 12/31/2025, on an assessment base of up to EUR 4 million per company.
As of: June 2020
What period does Überbrückungshilfe III cover and by when can it be applied for?
Überbrückungshilfe III covers the funding period from November 2020 to June 2021. Applications can be submitted between 10/02/2021 and 31/08/2021 through a reviewing third party (e.g. Steuerberater (German Certified Tax Advisor)). No additional funding is available for months in which November or December assistance has already been received.
As of: March 2021
What period does Überbrückungshilfe II (Bridging Aid II) cover?
The second phase of the Überbrückungshilfe covers the funding months September through December 2020. It is aimed at small and medium-sized enterprises, self-employed individuals, and non-profit organizations that have suffered revenue losses due to the coronavirus crisis.
As of: September 2020
What protection against termination applies to tenants with rent arrears due to Corona?
Tenants who are unable to pay their rent between 01.04. and 30.06.2020 due to Corona enjoy special protection. Landlords may not terminate their leases on the basis of these rent arrears until 30.09.2022. However, the rent remains owed and must be paid in arrears at a later date.
As of: March 2020
Which VAT rate applies to advance payments when the service is performed at a later date?
The decisive VAT rate is always the one applicable at the time the service is rendered, not when the advance payment is made. If advance payments were invoiced at 19% before 01.07.2020 but the service was performed between 01.07. and 31.12.2020, the reduced rate of 16% applies retroactively. The advance invoices do not need to be corrected; the adjustment is made in the final invoice.
As of: July 2020
Which VAT rate applies to annual passes, subscriptions and membership fees (e.g. gym)?
Annual passes and subscriptions are treated as a single supply that is only deemed performed at the end of the term; they are not split into monthly partial supplies. The decisive VAT rate is the one in force at the end of the supply period. A gym subscription paid in February 2020 is therefore subject to the 19% rate again at the end of January 2021.
As of: July 2020
Which VAT rate applies to continuous services such as rental agreements during the transition period?
Continuous services are generally deemed performed at the end of the agreed service period, i.e. at month-end for monthly rents. If the service is rendered before 01.07.2020, the rates of 19% or 7% apply; for later performance (until 31.12.2020), 16% or 5% apply. Contracts that serve as invoices (containing all mandatory details) must be amended by an addendum reflecting the changed tax rate.
As of: July 2020
Which VAT rate applies to food in the hospitality sector from 1 July 2020?
For food served in the hospitality sector, the VAT rate is reduced from the standard rate of 19% to the reduced rate of 7%. This provision applies from 1 July 2020 and is part of the Corona Tax Relief Act, adopted by the Federal Cabinet on 6 May 2020.
As of: May 2020
Who is affected by the increased additional earnings limit for pensions?
This affects recipients of an early old-age pension, meaning those who retired before reaching the regular retirement age. For regular old-age pensioners who have reached the standard retirement age, no additional earnings limit applied in any case.
As of: March 2020
Who is entitled to compensation for loss of earnings under Section 56 IfSG?
Eligible persons include carriers, suspected infectious or contagious individuals, and other carriers of pathogens who are subject to a work ban or quarantine. Parents who must care for their child due to an official closure of schools or daycare centers and are therefore unable to work are also entitled to compensation. In each case, an actual loss of earnings resulting from the official measure is required.
As of: November 2020
Who is eligible to apply for the bridging assistance (Überbrückungshilfe)?
Small and medium-sized enterprises, self-employed individuals, and non-profit organizations affected economically by the coronavirus pandemic are eligible to apply. The program is a joint initiative of the federal and state governments designed to cushion revenue losses.
As of: September 2020
Who is eligible to apply for the November Assistance (Novemberhilfe)?
Eligible applicants include all businesses, companies, self-employed individuals, associations, and institutions that were required to cease operations under the closure ordinances of 28 October 2020 (directly affected parties). Indirectly affected parties are also eligible if they can demonstrate that they regularly generate 80% of their revenue with directly affected businesses, as are affiliated companies under the same conditions. Accommodation providers and event venues are classified as directly affected.
As of: November 2020
Who is eligible to apply for the extraordinary November aid?
Eligible applicants include companies, businesses, self-employed individuals, associations, and institutions directly affected by the closure orders from 02.11.2020 onwards, including hotels. Indirectly affected are companies that demonstrably generate at least 80% of their revenue on a regular basis with directly affected companies. Affiliated companies are eligible if more than 80% of the group's total revenue is attributable to affected parts.
As of: November 2020
Who is eligible to apply for the Bridging Aid (June–August 2020)?
Eligible applicants are businesses whose revenues declined by at least 60% in April and May 2020 compared to April and May 2019 due to the coronavirus pandemic, and whose revenue losses continue at a level of at least 50% during the months June to August 2020. For businesses founded after April 2019, November and December 2019 serve as the reference period. The aid applies across all sectors but gives particular consideration to severely affected industries such as restaurants, hotels, travel agencies, showmen, and event logistics.
As of: June 2020
Who is eligible to apply for Bridging Aid II?
Eligible applicants are small and medium-sized enterprises, solo self-employed individuals, and freelancers with revenue declines of at least 50% in two consecutive months between April and August 2020 compared to the same months of the previous year, or with an average revenue decline of at least 30% across these months compared to the prior-year period. The previous threshold of a 60% revenue decline has been lowered.
As of: November 2020
Who can apply for the KfW Quick Loan (Programme 078)?
The KfW Quick Loan is available to companies with at least ten employees that have run into economic difficulties due to the coronavirus crisis. Funds may be used for investments and ongoing operating costs. Applications must be submitted exclusively through the company's principal bank or savings bank and have been accepted since 15 April 2020. The KfW assumes 100% of the credit risk on behalf of the principal bank.
As of: March 2020
Who is eligible for funding under the NRW special programme for digitalisation in retail?
Brick-and-mortar retail businesses in North Rhine-Westphalia are eligible. The aim of the NRW state government's project call is to strengthen economic resilience in the retail sector and to support stationary retail through innovative and digital measures.
As of: July 2020
Are investments in hygiene measures and digitalization subsidized?
Yes. Structural measures and renovations to comply with hygiene requirements are subsidized with up to 20,000 euros per month. Digitalization investments, such as setting up an online shop or costs for online sales platforms, are funded on a one-time basis with up to 20,000 euros and can be claimed retroactively from March 2020.
As of: March 2021
Are enforcement measures and late payment surcharges suspended during the coronavirus crisis?
Yes, the tax authorities are currently refraining from enforcement measures. In addition, late payment surcharges are being waived to provide relief for affected businesses and taxpayers.
As of: March 2020
How can employees in tax class V or VI obtain the increased short-time work allowance (Kurzarbeitergeld)?
In tax classes V and VI, no child allowance is normally entered on the tax card. The increased rate of 67% can still be granted if the child is verified by a certificate from the Agentur für Arbeit (Federal Employment Agency). Either the employer or the employee may file an informal application, attaching, for example, an extract of the spouse's tax card (for class V) or the employee's additional tax card (for class VI). A payment incorrectly settled at 60% cannot be corrected retroactively.
As of: March 2020
How much is Kurzarbeitergeld (short-time work allowance) and what role do children play?
Kurzarbeitergeld generally amounts to around 60% of the lost net pay. If at least one child eligible for tax consideration within the meaning of § 32 Abs. 1, 3 to 5 EStG lives in the household, Kurzarbeitergeld increases to around 67%. As a rule, a registered child allowance (Kinderfreibetrag) on the income tax card is required.
As of: March 2020
What is the VAT rate on food in the hospitality sector from 1 July 2020?
From 1 July 2020 to 30 June 2021, VAT on food served in the hospitality sector is temporarily reduced to the lower rate of 7%. The measure was introduced by the Corona-Steuerhilfegesetz (Corona Tax Assistance Act) of 6 May 2020 and is intended to provide economic relief to restaurants, cafés and similar businesses following the crisis. Beverages are not covered by this rule.
As of: May 2020
How much is the Corona emergency aid based on number of employees?
Solo self-employed individuals and micro-enterprises with up to 5 employees (full-time equivalents) receive a one-time payment of €9,000 for three months. For up to 10 employees, the subsidy is €15,000. NRW additionally supplements the federal funding with €25,000 for companies with 10 to 50 employees.
As of: March 2020
What is the amount of compensation under § 56 IfSG?
For occupational bans or quarantine measures under § 56 Abs. 1 IfSG, the full loss of earnings is reimbursed initially; from the seventh week onward, the benefit is reduced to the level of sick pay under § 47 Abs. 1 SGB V. In the case of school or daycare closures, compensation amounts to 67% of net income, capped at €2,016 per month, and is paid for up to 10 weeks per working parent (up to 20 weeks for single parents).
As of: November 2020
How is the fixed cost reimbursement structured under Überbrückungshilfe III?
Reimbursement is tiered according to the decline in revenue: up to 90% of eligible fixed costs for a revenue drop of more than 70%, up to 60% for a decline between 50% and 70%, and up to 40% for a decline of more than 30%. This tiered structure mirrors the approach used under Überbrückungshilfe II.
As of: March 2021
How much is the November Aid (Novemberhilfe) and how is it calculated?
The Novemberhilfe amounts to 75% of the November 2019 revenue, prorated by day for the duration of the lockdown. Solo self-employed individuals may alternatively use their average monthly revenue from 2019. For businesses founded after October 31, 2019, the monthly revenue from October 2020 or the average monthly revenue since founding may be applied.
As of: November 2020
How much funding is available under the NRW program for digital retail?
The funding rate is 90% of eligible expenses. The maximum grant is capped at EUR 12,000.
As of: July 2020
What is the regular additional earnings limit for early old-age pensions?
Recipients of an early old-age pension may regularly earn up to EUR 6,300 per year in addition without any reduction of their statutory pension. If this threshold is exceeded, the excess amount is partially offset against the pension.
As of: March 2020
What share of the credit risk does KfW assume under the Corona aid programme for SMEs?
For small and medium-sized enterprises (SMEs), KfW assumes 90% of the credit risk; for larger companies and in syndicated financing, 80%. This is backed by a federal government guarantee. The remaining 10% or 20% is borne by the applicant's house bank, which is intended to facilitate lending.
As of: March 2020
How much is the bridging aid (Überbrückungshilfe) and what evidence is required?
For a revenue decline of at least 50%, up to 50% of fixed operating costs are reimbursed; for declines exceeding 70%, up to 80%. The maximum reimbursement is €150,000 over three months; for companies with up to 5 employees generally max. €9,000, and up to 10 employees €15,000. Revenue declines and fixed operating costs must be reviewed and confirmed by a Steuerberater (German Certified Tax Advisor) or Wirtschaftsprüfer (German Statutory Auditor); overpayments must be refunded.
As of: June 2020
What are the maximum funding amount and advance payments?
The monthly maximum funding amount has been raised from 50,000 euros to 1.5 million euros. Advance payments can be up to 100,000 euros per funding month and are granted equally to all eligible companies.
As of: March 2021
How high are the fixed-cost subsidies under Überbrückungshilfe II (Bridging Assistance II)?
Up to EUR 50,000 per month is reimbursed, staggered by revenue decline: 90% of fixed costs for a revenue decline of more than 70%, 60% for a decline between 50% and 70%, and 40% for a decline of more than 30%. The flat-rate allowance for personnel costs has been increased from 10% to 20% of eligible costs. The former caps for micro-enterprises with up to 5 or 10 employees have been abolished.
As of: November 2020