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Tax payers in Germany must file the respective annual (e.g. income) tax returns for the previous tax year (calendar year 2019) not later than 31 July 2020 unless (!) a German tax law professional is instructed to file that return on behalf of the tax payer – in that case the deadline is extended from seven to 14 months (i.e. ending on 28 February 2021).
Obviously, the German legislator believes that it is time-consuming to involve an external tax expert and therefore grants twice as much time (14 instead of 7 months) when involving such certifed tax professional. Good news for our professions..
With a proper justification being provided, it is possible to apply for a deadline extension. But the underlying statutory rules have become stricter and tax offices are quick now to assess a penalty for late payment (Verpätungszuschlag) based on Sec. 152 German Fiscal Code (Abgabenordnung).
Today (31 July 2019) the revised “general deadline” for tax filings in Germany (tax year = calendar year 2018) expires.
The good news:
Example (new “extended deadline”): Taxpayer Andy Thom, originally from Scotland, has worked as a tennis coach in Berlin and Hamburg in 2018 and earned EUR 60,000 from students (business expenses not yet reflected). Andy must file an income tax (Einkommensteuer) return and, due to relevant turnover exceeding the thresholds for “small entrepreneurs”), his VAT (Umsatzsteuer) return for 2018. He might also have to file a trade tax (Gewerbesteuer) return. Andy has engaged the local German tax advisor Tommy Doll to take care of the tax filings. When are Andy’s tax filings due?
As Andy has engaged a tax law professional and assuming that Andy’s tax office is duly informed on the engagement of Tommy Doll, the relevant deadline is not 31 July 2019, but the last day of February 2020. That 29 February 2019 is a February which will further extend the deadline to the Monday thereafter. Hence, Andy’s tax advisor must file not later than on 2 March 2020 electronically Andy’s annual tax returns for 2018.
The bad news:
The ugly news:
The end of the Angela era
Angela Merkel, in office for more than 13 years now, will not run again for chancellor again in the Federal German elections scheduled for late September 2021 (date to be confirmed). The German economy is still doing good. The public’s focus is on issues such as the Brexit debate.
These are the reasons why not much “tax law reform” is happening at the moment in Germany. Tax law is not on top of anybody’s agenda at the moment.
A few thoughts on where we stand at the moment:
Let’s wait for the German economy to turn sour and/or a new chanecellor take office (due in late 2021 at the latest) before the next wave of “tax law reforms” hits Germany. For investors and residents, a pause on the tax reform front should be good news. (Of course, tax rates are always too high).
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