Coronavirus: Refund of VAT Special Advance Payment

In addition to the measures discussed by us on 19 March 2020, the fiscal authorities of some of Germany's federal states have now decided on further relief ‑ particularly for VAT ‑ in order to strengthen the liquidity of companies affected by the coronavirus.

Refund of the VAT Special Advance Payment

The fiscal authorities of the federal states (Länder) listed below have decided that, in order to strengthen the liquidity of companies affected by the coronavirus, upon application the VAT special advance payment for 2020 can be reduced to zero Euros and refunded.

As a rule, the VAT advance payment must be made on the 10th day after the end of the pre-registration period (following month) in accordance with Section 18 (1) German VAT Act (UStG).  However, upon request an extension of up to one month can be granted, provided that a special advance payment is made for the calendar year in question in accordance with Section 46 in conjunction with Section 47 (1) German Value Added Tax Ordinance (UStDV). The special advance payment amounts to on eleventh of the total advance payments for the previous calendar year.

According to 18.4 (4) German VAT Application Decree (UStAE), the fiscal authorities can determine the special advance payment in deviation from Section 47 UStDV, so that the above-mentioned measure is not expected to have any effect on the permanent extension already granted. The Bavarian State Ministry of Finance has also confirmed this.

The above-mentioned measure has so far been adopted by the following federal states (as of 25 March 2020), each with a link to the corresponding press release in German:

• Baden-Wuerttemberg (see Ministerium für Finanzen Baden-Württemberg Pressemitteilung vom 25.03.2020)
• Bavaria (see Bayerisches Staatsministerium der Finanzen Pressemitteilung Nr. 057 vom 23.03.2020)
• Brandenburg (see Ministerium der Finanzen und für Europa, Presseinformation 24.03.2020)
• Hesse (see Hessisches Ministerium der Finanzen Pressestelle 19.03.2020)
• Mecklenburg-Western Pomerania (see Finanzministerium Mecklenburg-Vorpommern Pressemitteilung vom 25.03.2020)
• Lower Saxony (see Landesamt für Steuern Niedersachsen Pressemitteilung vom 13.03.2020; item 8)
• North Rhine-Westphalia (see Antrag auf Steuererleichterung aufgrund der Auswirkungen des Coronavirus)
• Saarland (see Ministerium für Finanzen und Europa Pressemitteilung vom 23.03.2020)
• Saxony (see Sächsisches Staatsministerium der Finanzen Pressemitteilung vom 23.03.2020)

The measures offered by the tax authorities for tax deferrals, tax refunds and reduction of tax advance payments are first possibilities certain to show quick results for a short-term liquidity improvement.

Particularly in view of the currently extremely simplified applications for tax reductions and tax deferrals, every company should nevertheless already now, as a matter of extreme precaution, document the extent to which it is economically burdened by the consequences of the coronavirus.

We will support you with corresponding applications.

For more legal information around the coronavirus, see our Corona Information Centre.

Diljinder Singh Walia, tax advospr at BEITEN BURKHARDT Rechtsanwaltsgesellschaft mbH, Frankfurt