Among the many business impacts brought on by the COVID-19 pandemic and resulting economic unrest are a slew of legislative changes and recommendations. Here are some important updates to know about if you have employees, and thus payroll, in Germany.
Extensions for compliance filings
Currently, there are no changes to deadlines for compliance filings in Germany.
Extensions for tax payment deadlines
Companies in Germany may defer payments for corporate tax, income tax, trade tax and VAT, as well as adjust tax prepayments without enforcement, fees or penalties through December 31. The deferral does not apply to wage withholding tax or capital gains tax. If a company needs to defer tax payment, they should contact the applicable tax office(s) as soon as possible. Tax authorities in some states have published deferral forms on their websites.
Special considerations or recommendations — as an employer or for employees — to keep in mind
Employers can reduce costs by registering for short-time work, or Kurzarbeit, which allows companies to send their workers home or significantly reduce their hours without having to lay them off because wages will be compensated by the German social security system. The requirements for short-time compensation have been relaxed, retroactively from March 1, through December 31.
Programs or initiatives to help offset financial impacts
The state-owned KfW development bank is offering various types of loans to help companies improve liquidity and cover ongoing business costs. These loans may be applied for at the companies’ principal banks. Additionally, economically healthy companies may apply for bank guarantees for operating loans. Interested parties may submit an inquiry here.
Programs for employees with children
An update to the German Infection Protection Act, applicable through December 31, provides that parents will receive compensation if they suffer a loss of earnings because they have to stay home and care for their children, ages 12 and under, because schools and childcare facilities are closed. They will be compensated 67% of the loss of earnings for six weeks, up to a maximum of 2,016 euros per month.
Although this information is correct and up-to-date as of the 8th of April 2020, changes are happening frequently. Please seek professional advice as you work through payroll and HR challenges in Germany.
This post first appeared on Safeguard Global’s website here. Safeguard Global are an exhibitor on the HRTech247 Payroll floor. You can visit their HRTech247 exhibition stand here.
The information provided on or through this website is for informational purposes only and does not constitute legal advice. Please note that HRTech247 and Safeguard Global expressly disclaim any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.
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