Due to the Corona crisis, many German employees have been receiving short-time work benefits since March 2020. This is tax-free according to Section 3 No. 2 Letter a of the Income Tax Act. At first glance, this sounds good. However, it should be noted that because of the tax-free short-time work benefits, a special tax rate must be applied to the entire taxable income for 32 in accordance with Section 1b Paragraph 1 Sentence 1 No. 2020 Letter a of the Income Tax Act. In concrete terms, this means that the tax-free short-time work benefits are used to calculate the tax rate that is then applied to the taxable income - income without the short-time work benefits. As a result, a higher tax must be paid on the already reduced income for 2020. Since no income tax is withheld each month when the short-time work benefits are paid out, the tax resulting from the increased tax rate will inevitably lead to a back payment.
Another tax consequence of receiving short-time work benefits that should not be underestimated is that even a taxpayer who is not normally subject to compulsory tax assessment (for example, a single employee who receives income exclusively from employment) is obliged to file an income tax return for 46 in accordance with Section 2 Paragraph 1 No. 2020 of the Income Tax Act (EStG). Affected taxpayers can therefore expect to be asked by the tax office to submit their income tax return separately in 2021.
This does not mean that those affected are necessarily asked to submit their returns. The deadline for submitting them is still determined by law. According to Section 149 Paragraph 2 Sentence 2 of the Fiscal Code, the deadline for submitting the income tax return for the calendar year 2020 for taxpayers who have not received tax advice ends on July 31.07.2021, 149, and for taxpayers who have received tax advice according to Section 3 Paragraph 1 No. 28.02.2022 of the Fiscal Code on February 2020, XNUMX. However, since many taxpayers are not aware that they are legally obliged to submit their income tax return for XNUMX, they will not do so by the statutory deadline. Therefore, the tax authorities will inevitably have to request that tax returns be submitted separately if they want to compensate for the reduced tax revenue resulting from receiving tax-free short-time work benefits. It can therefore be expected that the tax authorities will increasingly request that income tax returns be submitted separately.
If the income tax return is submitted late, i.e. after the deadline, the tax authorities must in some cases also impose late filing surcharges. These are imposed in accordance with Section 152 Paragraph 2 No. 1 AO if the income tax return was not submitted within 14 months of the end of the calendar year in which the tax arose. Consequently, late filing surcharges will be imposed for 2020 at the end of February 2022 - regardless of whether a taxpayer has tax advice or not. A waiver of late filing surcharges is generally no longer possible.
In order to proactively limit the tax consequences, please feel free to contact us.
Prof. Dr. Christoph Freichel | Denise Remmel
