To cope with the consequences of the COVID-19 pandemic, the legislator has now launched the Second Corona Tax Assistance Act (Steuerhilfegesetz). In the following, the measures of the Corona Tax Assistance Acts that will support taxpayers’ liquidity and innovations in the field of corporate taxation (restructuring and international tax law) are explained.
In times of the COVID-19 pandemic, short-time work is an important instrument to alleviate the negative economic consequences for all concerned. The parties to the employment contract may make provision for the introduction and organization of short-time work in the contracts concluded between them. Against this background, all companies are recommended to check their sample employment contracts to see whether they contain sufficient provisions.
With the law to mitigate the consequences of the COVID-19 pandemic in civil, insolvency and criminal procedure law of 27 March 2020, the legislator reacted to the corona crisis and temporarily suspended or modified a number of substantial regulations in insolvency and company law.
The regulations for company law enacted as Art. 2 under the bulky title “Act on Measures in Corporate, Cooperative, Association, Foundation, and Home Ownership Law to Combat the Effects of the COVID-19 Pandemic” (“COVID-19 Act”) are aimed in particular at keeping companies with a larger circle of shareholders capable of acting irrespective of existing restrictions on the possibilities of assembly. Section 1 of the COVID-19 Act therefore provides for substantial simplifications for the holding of general meetings in stock corporations (AG), partnerships limited by shares (KGaA) and European companies (SE).
On 20 April 2020, the commission of experts appointed by the Federal Ministry of Justice and Consumer Protection presented the so-called Maurach draft for the modernization of the law on partnerships. The draft provides in particular for the introduction of a public register for civil law partnerships, the codification of a right of non-decision in partnership law and the opening up of partnerships to members of liberal professions. Partners in partnerships should keep an eye on further efforts in the legislative process to identify the resulting need for adjustment and implement it in good time.
In a recent decision, the Federal Court of Finance (BFH) specifies the criteria according to which, after the sale of a freelance practice, the resumption of the freelance activity within the previous local sphere of activity is not detrimental to the tax privileges of the capital gains realized on the sale.
The legislator has substantially expanded and sharpened the scope of application of the review of foreign investments. Instead of an actual threat to the public safety or order, the likeliness to affect the public safety or order is now sufficient for a prohibition. In addition, an enforcement ban has now also been introduced for transactions regarding companies active in the critical technologies and branches listed in the catalogue of section 55 para. 1 sentence 2 German Foreign Trade and Payments Ordinance that has been further complemented by companies active in certain fields of the health sector.