Home office and depreciation: Cabinet decides on tax aid

The federal government has decided on tax breaks. It wants to help citizens and companies better through the corona pandemic. However, a regulation announced in the coalition agreement is missing for the time being.

The federal government has decided on tax breaks. It wants to help citizens and companies better through the corona pandemic. However, a regulation announced in the coalition agreement is missing for the time being.

The federal government wants to help citizens and companies better through the Corona crisis through tax relief. A package decided on Wednesday in the cabinet is primarily intended to give companies incentives to invest. "This is a contribution to stabilizing the economic recovery and a contribution to strengthening the economy," said Finance Minister Christian Lindner (FDP). A regulation announced in the coalition agreement, which many companies are waiting for, is missing for the time being.

The timing of the introduction of the so-called super-depreciation is still open, said Lindner. He expressed doubts as to whether this measure could have an effect in the current year. As a kind of investment premium, the super write-off is intended to promote spending on climate protection and digital assets.

Taxpayers should be able to deduct a proportion of the costs of goods that are bought or manufactured for climate protection and digitization from the taxable profit. But because of the current delivery difficulties in many industries, this help may not yet have the desired effect, said Lindner. "The federal government has not yet formed a final opinion on the so-called super write-off." The approval of the Bundestag and Bundesrat is still pending.

According to the draft, the following tax breaks are planned for companies and citizens:

degressive depreciation

The degressive depreciation for so-called movable assets such as machines or vehicle fleets is to be extended by one year. Companies can write off larger sums than normal in the first few years after a purchase. In subsequent years, the depreciation amounts are then lower. "I would like to do what is best for medium-sized companies, trade and industry overall," emphasized Lindner. It is important to send a signal that the state wants to support investment activities again this year. Companies could invest their way out of the pandemic-related recession.

Settlement of Losses

Companies that are making losses due to the Corona crisis should become more liquid with this tax aid. You get the opportunity to offset current losses to a greater extent than before against profits from the two previous years. This reduces prepayments, for example. Without the so-called loss carryback, they would also only get back overpaid taxes later. The planned law will extend the extended loss statement until the end of 2023. For 2022 and 2023, the maximum amount will be raised to ten million euros.

Home office flat rate also for 2022

Employees should also be able to claim a home office flat rate in their tax return for this year. Those who work from home can count and enter the days – regardless of whether they have an extra study or work from the living room or kitchen. You can set five euros per day in the home office, but a maximum of 600 euros per year. However, the sum achieved in this way counts as income-related expenses, for which all taxpayers are charged a flat rate of 1,000 euros anyway. Only those who spend more than 1,000 euros benefit from the special rule. It is not yet known how many employees actually benefit from the home office flat rate.

Care premium up to 3,000 euros tax-free

There should be a corona bonus for nursing staff – the federal government wants to provide one billion euros for this. The law presented by Lindner stipulates that these premiums remain tax-free up to an amount of 3,000 euros and are not counted towards social assistance such as basic security. As much of the money as possible should actually reach the employees. This applies to special payments, among other things, for employees in hospitals, in intensive care, for outpatient nurses and employees in nursing homes.

Longer deadlines for tax advisors

Tax consultants have three more months to submit their clients' tax returns for 2020. The deadline has already been extended once. Actually, the tax consultants should now submit the documents by the end of May at the latest. Because of the high workload in the pandemic, this is currently difficult, they argue. The tax consultants also apply for economic aid for companies and take care of short-time work benefits. In the current crisis, they are therefore increasingly reaching their limits. Now they should have time for their work until the end of August. The deadlines for tax returns for 2021 and 2022 will also be slightly extended.

What is missing from the point of view of the opposition

What the opposition Union is missing in the government plans is a quick adjustment of income tax to the unexpectedly high inflation. Because the federal government expects a lower inflation rate for this year, the so-called cold progression, a kind of creeping tax increase, is increasing. The increase in the commuter allowance already initiated by Lindner is also pending. "The government draft shows that the red light is on the brakes instead of stepping on the gas in terms of tax policy," said Fritz Güntzler, a member of the Union MP.

The left, on the other hand, complained that the aid would primarily benefit the economy. Of the €2.6 billion relief, around €1.6 billion went to companies. "Here above all the clientele of the FDP is relieved", complained financial politician Christian Görke. The traffic light parties had promised relief for the vast majority during the election campaign. (dpa/mko)