Tax & Legal

The coronavirus emergency aid (with financial support from the federal government) for the months of April, May, and June 2020 is taxable as business income. According to the decision of the Supreme Tax Court, the original approval notice cannot be amended with retroactive effect if the subsidy had to be repaid later.

Services provided by a fitness studio operator are also subject to VAT if the gym is closed. The continued payment of membership fees as well as the replacement services offered by the gym operator during the corona lockdown is an exchange of services subject to VAT. According to a most recent judgment of the Supreme Tax Court this also applies if the members (as the recipients of the service) do not actually make use of the offered gym services, do not wish to do so or are unable to make use of them.

Ryanair was unsuccessful in its action against state aid from Sweden before the European General Court as the court of first instance. Within a short period of time, the airline had brought actions against 16 different state aid measures, including the Swedish case involving the state support for the local airline SAS and which is currently pending before the European Court of Justice (ECJ). In his Opinion Advocate General Pitruzzella suggests that the ECJ rejects the appeal in its entirety.

The German Federal Ministry of Finance has presented the draft bill for a fourth act implementing tax relief measures to address the Corona crisis (Fourth Corona Tax Relief Act) the following tax measures,inter alia, are envisaged:

Further extension of the procedural tax relief regulations.

Against the background of a fourth Covid 19 wave in Europe, certain measures, due to expire, have been extended.

The Council of the European Union adopted an amendment to the VAT directive introducing a temporary VAT exemption on importations and on certain supplies in response to the COVID-19 pandemic. The ‘buy and donate’ directive will make it easier for the Commission and EU agencies to buy goods and services to distribute them free of charge to member states in the context of the ongoing public health crisis.

Third Corona Tax Relief Act: Following the decisions of the coalition committee on 3 February 2021 further Corona aid for companies is planned.

At a Federal Press Conference on 6 July 2020, the Ministry of Finance in Berlin made the surprise announcement that, following a decision of the Minister of Finance, Germany will not be exercising the option given in the recent EU Directive to extend the reporting deadlines for DAC 6.

The Bundestag has passed the second Corona Tax Assistance Act. The Bundesrat has also given its approval.

The German Federal Cabinet has released the draft bill on the crisis management package aimed at mitigating the economic impact of the COVID 19 pandemic.

Prepared by Fabio Alberto Regoli

Prepared by Alessandro Caridi and Flavia Barone

Prepared by Flavia Barone and Fabrizio Tenuta

Prepared by Alessandro Caridi and Flavia Barone

Prepared by Luca Lavazza

Prepared by Alessandro Caridi and Flavia Barone

In the night of 3-4 June, coalition partners CDU/CSU and SPD agreed on a crisis management package to mitigate the economic impact of the COVID 19 pandemic.

The seizure of a bank account by the tax office, where the account also includes amounts received as Corona emergency aid, is unlawful. This was decided by the Münster Tax Court in a procedure for interim relief on 13 May 2020 (Az. 1 V 1286/20 AO), published in a press release on 19 May 2020.

At its meeting on 6 May 2020, the Federal Cabinet adopted the Corona Tax Assistance Bill, which - with the exception of editorial changes - essentially corresponds to the Federal Ministry of Finance's original formulation.