The Annual Tax Act of 2022 (JStG 2022) is a typical omnibus bill comprising over 100 individual provisions spanning the entire spectrum of tax law. It also includes key initiatives by the “traffic light” coalition aimed at reducing the tax burden on citizens. In doing so, it also responds to court rulings and EU requirements. The law was passed by […]
Background The 2022 Annual Tax Act provides for extensive tax breaks for small photovoltaic systems in order to accelerate the further expansion of this renewable energy source. Previous Taxation Operators of photovoltaic systems have generally generated income from business operations. This involves determining profits using the income-surplus method, which typically entails a significant administrative burden for what is often a […]
Background On May 19, 2022, the Bundestag passed the Fourth Act on the Implementation of Tax Relief Measures to Address the COVID-19 Crisis (“Fourth COVID-19 Tax Relief Act” or “Fourth Corona Tax Relief Act”) to minimize the economic consequences of the ongoing COVID-19-related restrictions and to provide additional investment incentives. Important: The Bundesrat’s approval is required (scheduled for June 10, […]
Background In a letter dated October 29, 2021, the Federal Ministry of Finance introduced a revised simplification rule for small photovoltaic systems (“PV systems”). Under this regulation, the tax authorities will assume, without further review , that the operation is a hobby activity not subject to income tax if the operator declares within a specified period that they wish to […]
Temporary reduction of German VAT in 2020 and its implications on businesses: time to act quickly The German Federal Government agreed on June 3, 2020, to stimulate the German economy by reducing VAT rates from 19% to 16% (standard rate) and from 7% to 5% (reduced rate) in the period from July 1 to December 31, 2020 (see also our blog article). […]
