Further tax measures planned through the Fourth Corona Tax Assistance Act

4 years ago

In February, the draft of a Fourth Corona Tax Assistance Act was passed. This is intended to implement some tax reliefs that are very interesting for companies.

The Corona pandemic is still ongoing and many companies are struggling with the economic consequences. The Federal Cabinet has therefore launched the “Draft of a Fourth Act for the Implementation of Tax Aid Measures to Cope with the Corona Crisis” (Fourth Corona Tax Assistance Act). The Bundestag and Bundesrat still have to decide on this. But what is planned?

Tax measures 4th Corona Tax Assistance Act

Companies are to continue to be relieved by a whole package of tax measures. Here is an overview of the most important key points:

The investment deadlines for tax reinvestments pursuant to Section 6b and investment deductions pursuant to Section 7g of the Income Tax Act are to be extended by a further year. Read also: Extended reinvestment period for reserves
Corona bonus payments to employees working in certain facilities – in particular hospitals – in recognition of special achievements during the Corona crisis are to remain tax-free up to 3,000 euros and are not to be credited in the basic provision for jobseekers according to the Second Book of the Social Code (SGB II).
Tax-free subsidies for short-time work allowance are to be tax-subsidised until the end of June 2022.
Declining depreciation is to be possible for another year: Companies can also choose this depreciation option for movable fixed assets that are purchased or produced in 2022.
The extended loss offsetting is to be extended until the end of 2023.
A more generous period (+ six months) is to be granted for the submission of 2020 tax returns in advised cases. This can significantly relieve both companies and tax consultants. The return deadlines for 2021 and 2022 are also to be extended (here also for taxpayers who have not been advised), but not quite as generously.
The home office allowance is to be applied until 31 December 2022.

Check design options

With the current plans, there are again some new design possibilities for companies. Especially in the case of depreciation, for example, it can be very interesting to be able to choose between straight-line or degressive depreciation. However, the legislation on the Corona pandemic also shows that companies are required to always be up to date, especially in accounting. Strategic decisions can bring considerable tax but also liquidity advantages in terms of results.

Legislative procedure is still ongoing

The legislative process has not yet been completed. The Bundestag and Bundesrat still have to approve the plans of the Federal Cabinet. It is quite possible that there will still be changes in some points. This makes technical know-how in accounting all the more important here. Those who react quickly and early to current developments can, for example, also make investment decisions in such a way that the tax burden is reduced accordingly.

As a specialized partner for accounting services, we will of course stay tuned and keep you up to date.

Image source: Pixabay Photographer: Tumisu

Author

Sylvia Meier
Guest Author

Sylvia Meier is a certified financial economist (FH) and has worked at the tax office, in consulting (Big Four firm), and for a specialized publisher. Today, as a freelance consultant, she supports companies and can demonstrate numerous publications, particularly on the topics of taxes, controlling, accounting, and finance.

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