Update: Equity measures pursuant to the flood disaster - BMF circular letter dated 28 October 2021

The German Federal Ministry of Finance (BMF) is extending the equity measures it implemented in response to the challenges posed by the flood disaster in July 2021. The BMF will continue to provide VAT relief to entrepreneurs helping those harmed by the flooding.

In its letter dated July 23, 2021, the BMF took various steps to reduce red tape in the aid provided to flood victims - also with regard to VAT - until October 31, 2021. Thus, an exception would be made regarding these transactions governed by Sec. 15a of the German VAT Code: any gratuitous transfers of value would not be taxed, and an input VAT deduction could be claimed if, for example, living space was provided to flood victims free of charge or if the company provided its staff or goods free of charge. More details are provided in our article on this subject. In a letter dated October 28, 2021, the BMF extended these equity measures until December 31, 2021.

(Dated: 18 November 2021)