The German Federal Ministry of Finance (BMF) is extending the existing tax equity measures in their temporal scope due to the effects of the coronavirus.

Selected contents of the BMF letter dated March 18, 2021 are presented below:

  • Deferral of taxes
    • Taxpayers who are directly and not insignificantly negatively affected by the pandemic can apply for a deferral of taxes due up to this date by 30 June 2021, stating their circumstances. The deferral will be granted until 30.9.2021 at the latest. A deferral may not be granted for taxes payable by third parties, this applies in particular to payroll tax.
    • Beyond 30.9.2021, an installment agreement may be granted until 31.12.2021. Fortunately, the tax authorities shall not impose strict requirements when verifying the conditions. A refusal shall not be made because the taxpayer cannot prove exactly the damages he has suffered. Furthermore, it is encouraging that the charging of deferral interest can be waived. It is to be hoped that the tax authorities will also be generous in this respect.
  • The tax authorities are now temporarily waiving enforcement measures in a simplified procedure. In case of taxpayers who are demonstrably directly and not insignificantly negatively affected by the pandemic, enforcement measures are to be waived until September 30, 2021 for taxes due by June 30, 2021. Late payment surcharges between Jan. 1, 2021 and Sept. 30, 2021 will be incurred, but are generally to be waived. If payment in installments has been agreed by 12/31/2021, late payment surcharges may be waived until 12/31/2021. There may also be a general ruling on this from the tax authorities. This will hopefully provide for a general waiver of late payment surcharges in corresponding cases.

Source: Haufe, BMF Letter dated March 18, 2021 (in German language)

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