Important changes resulting from the Third Coronavirus Tax-Related Assistance Act
Tax loss carry-back
The Second Coronavirus Tax-Related Assistance Act had already provided for an increase in the tax loss carry-backs for 2020 and 2021 from €1 m or €2 m (in the case of a joint assessment for spouses) to €5 m or €10 m. Now, as a result of the Third Coronavirus Tax-Related Assistance Act, it will even be possible to carry back an amount of up to €10 m or, in the case of a joint assessment for spouses, €20 m to 2019 and offset it there against positive income. This provision will also apply analogously for corporations that will likewise be able to claim the increased loss carry-back of €10 m. According to the current status, the previous legal text relating to tax loss carry-backs will have to be applied again from 2022.
If the tax return for 2019 has not yet been submitted or if the tax assessment notice is not yet final and unappealable then a first-time or amended request can be made for the provisional loss carry-back to be taken into consideration. In the case of tax assessment notices for 2019 that are final and unappealable, it is now possible, within one month following the publication of the Third Coronavirus Tax-Related Assistance Act – thus, until 17.4.2021 – to make a request for the provisional loss carry-back for 2020 to be taken into consideration or to request that the loss carry-back be widened accordingly. The tax assessment notice for 2019 may be altered in this respect.
Lawmakers have also extended the provision on the provisional loss carry-back. It will thus be possible to take a provisional loss carry-back from 2021 into consideration in the tax assessment for 2020. The requirement for this is that the prepayments for 2021 had been reduced to €0.
VAT on restaurant and catering services
The reduced VAT rate of 7% applicable for restaurant and catering services that are provided will be extended beyond the limit of 30.6.2021 until 31.12.2022. As previously, this does not apply to the sale of drinks.
Coronavirus benefit payments
After the one-off child benefit payments that were already made in 2020, there will be another such benefit payment. There will be a one-off payment in the amount of €150 for each child who is eligible for child benefit in May 2021, probably in the month of May in 2021. The one-off payment will be made automatically – there will be no need to apply for it. Moreover, it will not count towards social welfare benefits and will not reduce maintenance payments.
Bridging Assistance III
Advance payments will continue to be made within the scope of Bridging Assistance III. The level of payments will be determined in accordance with the so-called eligible fixed costs. Moreover, there will be direct support for building measures to implement hygiene strategies as well as investments in digitalisation and the re-start assistance for the solo self-employed will be enhanced.