GERMANY: Overdue VAT payments and import VAT relief measures

While Germany is currently in the midst of the corona virus pandemic it has adopted the largest assistance package in history in order to combat the Covid19. As a result, all businesses affected by the pandemic that had their income decreased in 2020 due to covid can now opt in for a tax deferral by the end of December. The approval of these deferrals will not be subject to strict conditions as the German authorities are looking to increase the liquidity of these companies.

The customs administration, which administers import VAT, energy duty and aviation tax, will grant the same relief. This relief also applies to insurance tax and to VAT administered by the Federal Central Tax Office.

All measures designed to enforce late payments and late payment penalties will be waived by the government for this period. Income tax, corporation tax as well as VAT tax are included in this relief.

At the same time pharmacies have been allowed to use alcohol tax-free, in order to create disinfectant products such as hand gels which have seen their demand skyrocket in 2020.



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