Corona: Important information for companies

Due to the increasing intensification of the corona pandemic and the associated restrictions on the general economic life as well as school closures, companies are facing increasingly serious challenges, the full extent of which cannot yet be foreseen.

As an immediate measure, the German Federal Ministry of Finance, in cooperation with the German Federal Ministry of Economics, has decided on or is planning extensive immediate measures which are in particular intended to effectively counteract the economic effects.

These measures essentially comprise three important areas:

1. Making the short-time-working allowance more flexibles

  • Simplified conditions in applying for short-time-working allowance by lowering the minimum quota of employees affected by the measure to 10% (previously one third)
  • Partial or complete waiver of building up negative working time balances
  • Short-time-working allowance also for temporary employees
  • Full reimbursement of social security contributions by the German Federal Employment Agency

2. Tax related measures increasing liquidity for companies

  • Tax authorities shall be enabled to facilitate granting of deferrals of tax debts. Overall, companies shall benefit from the possibility of tax deferrals in the billions. The German Federal Ministry of Finance has initiated the necessary coordination with the German Federal States on this issue.
  • The tax authorities will largely waive enforcement measures and late payment penalties until the end of 2020 if companies are directly affected by the corona virus situation.
  • Simplification of the possibility of reducing tax prepayments
  • In the case of taxes administered by the customs administration (e.g. energy tax and air transport tax), the German Directorate General of Customs is said to have been instructed to accommodate taxpayers in an unbureaucratic manner. The same applies to the German Federal Tax Office, which is responsible for insurance tax and VAT and should proceed accordingly.

3. Unlimited emergency liquidity assistance, government loans

  • Billion-euro protection shield for businesses and companies through extensive liquidity and loan programs by the KfW (Business and start-up loans and other special programs) and other guarantee banks.
  • New “unlimited-volume” measures are being planned.

The terms and conditions for publicly funded loans to entities are being eased.

This specifically affects the following programmes:

  • KfW corporate loans for existing entities
  • ERP loans for founding start-ups in the first five years
  • KfW loans for expansion for larger entities
  • Guaranteed loans by guarantee banks

For KfW loans, the assumption of risk has been increased to up to 80% and the revenue thresholds for larger entities have been increased in orderthat entities can more easily gain access in obtaining such loans.

In the area of guaranteed loans the maximum amount of guarantees has been doubled to 2.5 million euros. The maximum loan amounts have been increased from 35% to 50% of the volume of an entity’s funds. The criteria for independent disbursement by an entity’s bank have been eased (up to 250 thousand euros within three days) in order to simplify access to guaranteed loans.

Such government loans and guaranteed loans are to be applied for through an entity’s ownbank. Your bank can advise you on the application process and provide you with detailed information on specific government loans and the conditions for obtaining guarantees.

4. European cooperation

  • Further assistance programmes are being developed and agreed upon at the European level.

Should the economic effects caused by the coronavirus trigger a crisis for your entity, e.g. looming insolvency, you can click on the following button in order to gain a first overview of the duties of management and the actions to be taken that specifically relate to such circumstances.

Please do not hesitate to contact us with any questions you may have concerning the issues described in the points above. We are available at any time.

Contact

Tax liquidity aid and short-time working allowance

Phone: +49 69 170000-931
Email: oliver.sieg[at]rsm.de

Liquidity assistance and insolvency

Phone: +49 2151 509-103
Email: markus.mehring[at]rsm.de

Phone: +49 2151 509-228
Email: matthias.beckschaefer[at]rsm.de