NRW allows reimbursement of special VAT tax advance payments
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NRW allows reimbursement of special VAT tax advance payments

During the corona crisis, the country passed tax measures to support affected companies. North Rhine-Westphalia will reimburse VAT advance payments. It is particularly focused on a change in VAT tax that is meant to give companies short-term liquidity support.

The tax measures are part of a comprehensive aid package that the federal government has put together. It provides 25 billion euro to rescue companies affected by the corona crisis. Part of the rescue package includes express bonds, for example, which we presented in a previous blog post.

Tax measures of the NRW rescue packet

However, the country’s tax administration is also creating new opportunities for companies in terms of taxation. Tax deferrals and reductions in income tax prepayments should be granted quickly and easily; we’ve compiled all relevant information about it in a blog post. Now, the country is also accommodating companies in terms of sales tax.

Application for the reduction of VAT advance payments

Special advance payments that a company had to make to grant a long-term extension at the beginning of this year may be reduced to zero for companies affected by the crisis. The refund will be made as soon as possible.

Simplified application form
In order to be able to provide funds to companies as quickly and easily as possible, the country is providing simplified application forms. This should also simplify and speed up the work of the authorities. We’ll do it for you.

Extent of funds provided
More than four billion euro will be made available to affected companies immediately and at very short notice.

Effect of special advance reduction
Affected companies are given the opportunity to maintain their own liquidity with the application. In most cases, an advance payment based on previous registrations will be refunded if it has already been paid. The measure directly improves the liquidity of the North Rhine-Westphalian economy.

Our Assessment

North Rhine-Westphalia will reimburse VAT advance payments. We think it is very sensible to give companies the option to request not making, or delaying, VAT advance payments. It saves red tape for companies and authorities and leads to a quick improvement in liquidity.

This is because VAT advance payments are based on last year’s average tax payable, which would have been a good year still for many companies. However, this will only benefit companies who in fact have revenue that is subject to VAT. But this should be true in most cases.

To our knowledge, only the state of North Rhine-Westphalia has created the option of lowering VAT advance payments thus far. But we assume that other federal states will follow suit very quickly.

We would be delighted to advise you on the impact on your company’s liquidity and would also be happy to file the necessary requests with the fiscal authority very soon.

Please feel free to get in touch.

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