Although global, the response of different countries, in terms of labour or fiscal measures, to the Coronavirus crisis is differing in each of the markets. Regarding the German-case, fast-acting emergency measures are being implemented in response to the economic development caused by the corona virus. This is being done in close coordination with the countries and with European and international partners.
For employees and companies affected by the consequences of the Covid-19, a protective shield will be erected, based on four pillars:
1- Making reduced working hours more flexible
- Reduction of the quorum of employees affected by absenteeism in the company to up to 10%.
- Partial or complete waiver of building up negative working time balances
- Short-time allowance also for temporary employees
- Full reimbursement of social security contributions by the Federal Employment Agency (BA)
2- Fiscal liquidity support for companies
The possibilities for deferral of tax payments, reduction of advance payments and enforcement will be improved. In particular, freelancers and small businesses should contact their tax office.
In the case of taxes administered by the customs administration (e.g. energy tax and air transport tax), the General Customs Directorate has been instructed to accommodate taxpayers. The same applies to the Federal Central Tax Office, which is responsible for insurance tax and value added tax and will proceed accordingly.
3- Billion-euro aid programmes for businesses and companies
First of all, the existing liquidity support programmes will be considerably expanded to facilitate companies’ access to cheap credit. Companies should contact their local bank and jointly submit applications to the KfW (Kreditanstalt für Wiederaufbau). Information is available on the KfW website and from all banks and savings banks.
And how is export business supported? With export credit guarantees the Federal Government provides flexible, effective and comprehensive support to industry. This is flanked by a KfW programme for refinancing export transactions. If there is any additional demand for export cover and refinancing, the authorisation framework can be increased very quickly.
4- Strengthening European cohesion
At the European level, Federal Finance Minister Scholz and Federal Economics Minister Altmaier advocate a coordinated and determined approach. In close cooperation with its European partners, the Federal Government will dovetail its corona measures at European level.
The Federal Government welcomes the European Commission’s idea of a “Corona Response Initiative” with a volume of 25 billion euro. It also welcomes the announcement by European banking supervision that it will make use of existing leeway so that banks can continue to provide reliable liquidity to the economy, as well as the measures announced yesterday by the European Central Bank to provide liquidity to banks.
The Coronavirus crisis is presenting important challenges for all companies and in this context information is essential. At Auxadi we are experts in providing value added services in accounting, tax compliance and international payroll management. If you need more information, please do not hesitate to contact us.