More funding for families and municipalities, relief on electricity prices, and a reduction in VAT.
The coalition committee has agreed on a comprehensive economic and future package with a volume of 130 billion euros. The aim is to safeguard jobs and get the economy moving again.
The package of measures includes, among other things:
- Reduction of VAT: From 1 July to 31 December 2020, the standard VAT rate is to be reduced from 19 percent to 16 percent, and the reduced rate from 7 percent to 5 percent.
- Child bonus for families: Parents will receive a one-off payment of 300 euros per child. For single parents, the tax allowances will be doubled.
- Support for municipalities: The federal government will increase its share of the costs of accommodation for those in need, will compensate municipalities for half of their trade tax shortfalls, and will strengthen local public transport and the healthcare sector.
- Relief on electricity costs: From 2021, the EEG levy is to be reduced through subsidies from the federal budget.
- Future package: Around 50 billion euros will flow into future-oriented areas such as the hydrogen economy, quantum technologies, and artificial intelligence.
Source: www.bundesregierung.de
https://www.bundesregierung.de/breg-de/suche/konjunkturpaket-geschnuert-1757558
Frequently asked questions
Frequently asked questions
What were the VAT rates under the 2020 economic stimulus package?
Under the 2020 economic stimulus package, the standard VAT rate was reduced from 19 percent to 16 percent from 1 July to 31 December 2020. During the same period, the reduced rate was lowered from 7 percent to 5 percent. The aim was to boost consumption and revive the economy following the coronavirus restrictions.
What child bonus did families receive under the 2020 economic stimulus package?
Parents received a one-time child bonus of 300 euros per child. In addition, the tax relief amounts for single parents were doubled to ease the particular burden on these families during the coronavirus crisis.
How were municipalities supported under the 2020 stimulus package?
The federal government increased its share of housing costs for those in need and covered half of the municipalities' trade tax shortfalls. In addition, public transport and the healthcare sector received financial support.
How was the EEG surcharge relieved by the stimulus package?
Starting in 2021, the EEG surcharge (renewable energy levy) was to be reduced through subsidies from the federal budget. This eased electricity costs for both consumers and businesses.
What was the total volume of the German federal government's 2020 economic stimulus package?
The stimulus and future-oriented package had a total volume of 130 billion euros. Of this, around 50 billion euros were allocated to future-oriented sectors such as the hydrogen economy, quantum technologies, and artificial intelligence.