This is new in tax law 2021
As every year, the tax authorities have planned various innovations for 2021, many of which have already come into force on January 1 of this year. Find out more about the changes in tax law, some of which should also be of particular interest to companies.
General changes in tax law for 2021
Basic tax-free allowance rises to EUR 9,744/EUR 19,488:
The basic tax-free allowance will be raised in 2021. Income below 9,744 EUR single/ 19,488 EUR married persons remain tax-free.
Elimination of the solidarity surcharge for a large proportion of taxpayers:
Most taxpayers do not have to pay any or only a pro-rata SOLI. Only top earners will continue to have to pay the full surcharge of 5.5%.
Higher lump sums and other benefits for special groups of people:
- Disabled people receive a double lump sum and a newly introduced travel allowance of EUR 900.
- The care allowance will also increase to EUR 1,800 in care levels 4 and 5, EUR 600 for care level 2 for the first time and EUR 1,100 for care level 3.
- The volunteer allowance will increase to 840 EUR, while 3,000 EUR will remain tax-free for trainers.
- Child benefit and tax-free allowance will increase – there will be 15 EUR more per month for children.
The child allowance increases to EUR 2,730 per parent.
EUR 9,744 per year can now be claimed as an extraordinary burden for maintenance payments to family members.
The originally limited increased relief amount for single parents of EUR 4,008 continues to apply and increases by EUR 240 for each child.
What will change for employees
Package for home office
The HOME OFFICE LUMP SUM for employees is particularly interesting here. Since the requirements for the tax claim of a home office were previously very strict, many employees could not claim any costs here. This changes with the HOME OFFICE LUMP SUM of EUR 5 per day in the home office – with a maximum of EUR 600 per year. However, the lump sum cannot be claimed in addition to the employee’s lump sum of EUR 1,000. If you cannot exhaust the lump sum here, you will not receive an additional allowance via the HOME OFFICE LUMP SUM.
Commuter allowance
The commuter allowance will increase to EUR 0.35 in 2021 from the 21st kilometre. Low-income earners with an income below the basic allowance can claim the mobility bonus upon application. It amounts to around 14% of the increased commuter allowance and can be applied for within 4 years of the end of a calendar year.
Minimum wage
The minimum wage will rise to EUR 9.50 on 1 January 2021 and is expected to increase further to EUR 9.60 on 1 July 2021.
Innovations for companies and the self-employed
General regulations
Employers should check the working hours of mini-jobbers with a view to the minimum wage increase in order not to exceed the EUR 450 limit.
In § 8.4 of the Income Tax Act, the additional wage was enshrined in law as a requirement for tax exemptions due to voluntary employee benefits. In order to apply the 44-euro exemption limit for non-cash benefits, for example, no wages may be converted, but there must be an additional voluntary benefit from the employer.
In the case of investment deductions, the deduction amount has been increased to up to 50 percent of the expected acquisition or production costs. In addition, it is new that longer rental of the assets will be permitted. The business asset caps have been abolished. An increased profit limit of EUR 200,000 now applies uniformly to all types of income.
VAT law
In the case of final tax assessments, retroactive invoice correction is no longer possible under VAT law. If an invoice is not recognized due to formal deficiencies, it will be expensive. The non-recognition has a particular effect on the amount of interest on arrears, which is calculated after the 15th month after the end of the calendar year in which the invoice was first presented to the recipient of the service.
If VAT revenue is at risk, the validity of VAT identification numbers may be limited in the future. In this case, for example, a VAT exemption for intra-Community supplies to a specific VAT identification number could be omitted.
Intra-Community mail order business is now to be reformed by mid-2021 – postponed due to the Corona crisis. Then only a cumulative threshold of 10,000 euros will apply as a limit for all deliveries to other member states and certain other services. Supply chain fictions are intended to ensure, among other things, that operators of electronic marketplaces are considered suppliers and thus VAT debtors in sales by marketplace online retailers from third country territories to consumers within the EU.
Changes to deadlines, evidence and the statute of limitations
The simplified proof of donation – bank statement is sufficient – now applies to amounts up to 300 EUR per donation
In particularly serious cases, tax evasion does not become statute-barred until 15 years.
Since tax advisors are burdened with many additional tasks due to the Corona crisis, the Federal Ministry of Finance has set an extension of the submission deadline for 2019 tax returns prepared by tax advisors until 31.03.2021. In this regard, the Federal Ministry of Finance announced on Twitter on 18.12.2020 that this deadline is to be extended even further until 31.08.2021. The amendment, which has already been agreed upon by the relevant decision-makers, is to be regulated in the next tax law.
What’s new for landlords
For landlords, the 66% upper limit for the comparability of rent is lowered to 50% when renting to family members. Landlords who apply at least 50% of the local comparative rent when renting to relatives can fully benefit from the deduction of income-related expenses. However, for rents between 50 and 66%, the tax authorities also require a positive income forecast.
Image source: Pixabay, Photographer: Free-Photos
The blog posts and articles are written by ICS adminservice employees to the best of their knowledge and belief, but do not claim to be correct or complete. ICS adminservice assumes no liability for this content. Individual expert advice cannot be replaced by the content.
Author
Claudia Herrmann
Marketing Consultant
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