Economic Stimulus Package: Tax Measures
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Economic Stimulus Package: Tax Measures
On 3 June the time had come: The Coalition Committee published the so-called economic stimulus package in order to fight the effects of the coronavirus. The 15-page paper contained as many as 57 measures. What is essential? What has been expanded? What is new? We have summarised the most important facts:
- Lowering the normal VAT rate from 19% to 16% and the reduced VAT rate from 7% to 5% on goods and services from 1 July 2020 to 31 December 2020
- Extending the deadline for import VAT to the 26th of the subsequent month (expected liquidity effect of approximately 5 billion euros)
- Extended utilisation of loss carrybacks for tax purposes for the 2020 and 2021 financial years
- to a maximum of 5 million euros for separate assessments (until now maximum 1 million euros)
- or 10 million euros for joint assessments (until now 2 million euros)
- Introducing a mechanism for taking 2020 losses into account for the 2019 tax return (e.g. setting up a corona tax provision)
- Introducing the declining depreciation method with a 2.5 multiplier in comparison with the currently applicable method and a maximum of 25% per year for movable fixed assets for the 2020 and 2021 tax years (Expected effect approximately 6 billion euros)
- Modernising corporate income tax law among others
- Introducing an option model for partnerships for optimising the duty to pay corporate income tax
- Increasing the weighting factor for trade tax for partnerships by increasing the base tax amount at a basic tax rate of 4% (until now 3.8%)
- Any further measures have not yet been announced
- Retroactive increase in the rate of the tax allowance for research as of 1 January 2020 and limited to 31 December 2025 on an assessment basis of up to 4 million euros per company (up to now 2 million euros)
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