10 benefits from government – corona recovery plan

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Coronavirus outspread across the Globe has shaken the lives as well as the economies of all countries. The Federal Government announced to support us with a large-scale 130 billion Euro stimulus package as a corona recovery plan and various measures such as emergency aid, short-time working compensation, flexible interpretations of additional earnings regulations, or the use of parking spaces to expand the gastronomic potential.

10 benefits from government as corona recovery plan:

VAT reduction – corona recovery plan:

From 01.07.2020 the Federal Government will reduce the VAT rate from 19% to 16% (or from 7% to 5%) until the end of the year. A lot of items will be cheaper in supermarkets, brick and mortar stores, online. Already, you must be receiving emails from your internet, electricity providers. This can be the best time if you are looking to purchase the products.

300 € Euro additional child benefit – corona recovery plan:

As a major aspect of the Federal Government’s Corona Recovery Plan, all parents entitled to child benefits will receive a one-off child bonus of 300 Euro in 2020, paid out in two installments of 200 Euro in September and 100 Euro in October.

Bonus payment of up to 1,500 Euro tax-free – corona recovery plan:

The Federal Government wants to support companies and employees in this difficult Corona pandemic and has ensured that such payments up to 1,500 euros are tax-free this year.  Employers can now pay subsidies up to an amount of up to 1,500 euros tax-free to their employees. Ask your employer is willing to support you with a tax-free extra payment during this Corona pandemic and short-time work. More details in German

Corona emergency aid for students upto 500 euros per month:

Most of the students make living by working as part time workers in restaurants, super markets, etc. And these students jobs are temporarily closed during the lockdown.

The  Federal Government wants to support the affected students by monthly bridging aid of up to 500 euros. Students benefiting from loans, scholarships, or similar in the relevant month are not excluded from applying for interim financial aid. Depending on the proven need, between 100 euros and 500 euros can be paid out as a non-repayable grant.

Applications can only be filed separately for the months of June, July, and August 2020. A new application in – and for – a new month will only be admissible if the student is still eligible to apply. Students can submit an application on the Student Help Association (Studentenwerk) 

Mandatory tax return for short time workers – corona recovery plan:

The tax is free for short time workers in general. Still, in the following year after receiving it, the law requires you to file a tax return. Every employee, who received more than a total of 410 Euro in wage replacement benefits (e.g. short-time working compensation or social security and parental allowance) has to file a tax return for the year 2020 in 2021.

Despite being tax-free, wage replacement benefits are added to your taxable income, which is the amount used to determine your individual tax rate. Therefore, receiving short-term working compensation can lead to an increase in the calculated tax burden, which results in a subsequent payment to the tax office. Therefore, employees who received wage replacement benefits in 2020 should save some additional money on their bank accounts to be prepared for the potential additional payment.

Increase of short time work compensation -corona recovery plan:

Due to the Coronavirus, the government has decided to set an additional incentive for companies and employees alike, making the additional pay by the employer tax- and deductible free from March 1st to December 31st, 2020 as part of corona recovery plan. The only condition is that short-term working compensation plus add on pay combined make up a maximum of 80% of the missed-out compensation package (the difference between gross wage and the reduced gross wage due to short-time work). Everything above that 80% threshold is taxed at a normal rate.

Tax benefits for cross border commuters:

Due to Corona pandemic a large number of border commuters cannot commute to work as usual and work from home.

The Federal Ministry of Finance announced working days at home due to the Corona pandemic can be billed as normal working days in the neighboring countries i.e. Luxembourg, Netherlands, Belgium, Austria, and France. More details in German.

Environmental bonus for the purchase of climate- and environment-friendly electric vehicles:

As part of the corona recovery plan, The purchase of sustainable electric vehicles is now more strongly supported by the government. The existing environmental bonus for the purchase of an electric car has doubled from 3,000 Euro to 6,000 Euro. This applies to all e-vehicles with a netlist price of up to 40,000 Euro. For the time being, the subsidies will be eligible until 31.12.2021.

Quarantine due to Corona and continued payment of salary – corona recovery plan:

If, as an employee, you are subject to a professional employment ban under the Infection Protection Act or are not allowed to work due to official quarantine, you are exempt from the obligation to work.

You will receive compensation equal to your net salary for the first six weeks paid by your employer. The latter can recover the money by application from the local health authority. With a longer quarantine, you will continue to receive the compensation but it is paid by the local health authority depending on the amount of your entitlement to sickness benefit.

Check your tax class and optimize the level of short-time working compensation:

The amount of short-time working compensation can be dependent on your tax class. Therefore, married couples and parents should do some research on whether a change in tax class might make sense for them.

In Germany, married people have the choice of whether to file their tax returns individually or ask for a joint calculation of the tax burden. When doing a joint declaration, there is also the opportunity to pick a tax class (III, IV with factor, V) for each partner. The person earning more money usually picks class III or IV due to more potential tax deductions.

However, during the Corona crisis, the partner doing short-time work should pick the lower-taxed class (class III or IV) to benefit from more short-time working compensation. The reason is that the calculation of short-term working compensation is based on the net salary, which is higher when choosing a tax-privileged class.

COVID19 virus update – Coronavirus Germany


Coronavirus outspread across the Globe has shaken the lives as well as the economies of all countries. In that context, Germany is no exception. As of today ie., 7th June more than 185K cases were recorded while 8700+ died.

Except for a few industries such as FMCG, HealthCare, Pharmacy & partially financial services rest others are beaten badly, and at this point in time it’s hard to predict complete recovery. Travel & Hospitality, Automotive & Mobility industries bore the maximum brunt & are still struggling.

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Many companies to cut down the operational costs & longterm sustenance have forced employees to reduce working hours (aka Kurzarbeit) & few companies laid off employees when their revenue streams drained completely. The German Automotive industry like other countries continues to struggle due to weak global demand & climate action much before Coronavirus. The lockdown indeed accelerated the crisis & many industries are at the verge of collapse.

Like Automotive, Aviation & Mobility industries are also facing an existential crisis. Few Low-Cost Carriers have already gone bankrupt & layoffs in news are not new anymore. Big carriers such as Lufthansa agreed the bailout package (€9bn) from the German government. But, not all air carriers received State support.

The tourism & Travel industry struggled the most with almost bookings close to zero due to coronavirus. While countries imposed Travel ban, EU borders closed by member states, traveling within Europe has become impossible & as a result of this, the industry suffered severely. During the Easter holidays, the lakes around Germany would be busy but this year the trend is broken & the lakes were empty.

Tegernsee lake in Germany during lockdown

Although neighbour states suffered heavily because of high mortality rates, Germany has had low mortality rates because of great healthcare system, timely response by the administrative departments and most importantly young people who got infected while they were on ski-vacation in Tirol and those attended Venice carnival.

Exit Strategy of Coronavirus::

As the situation evolves, it has become clear, we all have to live with Coronavirus until a safe vaccine is in place. Governments too have realized this and decided to resume Life & Business as usual with exit strategies. Few federal states in Germany have made masks mandatory while commuting with public transportation, in supermarkets & retail stores. Restaurants & beer gardens have been opened with social distancing instructions. Open pools, gyms will be opened from 8th June with more or less similar social distancing measures.

Kronthaler Weiher
People relaxing at a lake in Bavaria on a sunny day

EU borders will be reopened from June 15 and international travel would probably be resumed from July or early August to kick-off business activities.

Economic package and aid by the Government ::

The German government has announced a 130 billion Euros stimulus plan to kickstart the hard-hit industries of Coronavirus. The measures include VAT cuts from 19% to 16% starting July 1st, 300 euro bonus per child, reduced levy on electricity costs, aid on social security contributions, rebate on electric cars.

The ministry of Economics has proposed a 5 billion Euro Car Bonus Scheme to boost automotive sales as the industry is in deep crisis. In addition to this Germany has announced 50 billion Euros Future Package to invest in future innovations on climate protection. Hope these measures would help the German economy to rebound, helps the industry to retain jobs.

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Construction crane overturned in front of an apartment building

Construction Crane

A construction crane with a weight of about 60 tons fell over in Taunusstein before an apartment building and tipped onto a parking area. The crane operator was injured.

Only a couple of meters before an apartment in Taunusstein (Rheingau-Taunus), a construction crane tipped over at 8 a.m. on Wednesday morning and thumped into the ground. The 60-year-old crane driver, who was sitting in the crane driver’s lodge at the time of the incident, was slightly harmed in the accident.

Construction Crane Damage:

Two cars and a bike were damaged. The crane and the asphalt of the parking area were likewise badly affected. The police estimate the damage to be a few hundred thousand euros. The crane had been set up on the construction site for a new apartment building.

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World’s famous beer festival Oktoberfest is canceled due to coronavirus


The Oktoberfest is the world’s largest beer festival which happens in Munich for a period of 16- 18 days starting from mid-September.

As countries slowly, begin to lift up the restrictions, meeting in very large groups remains prohibited. As coronavirus fears continue, the fest seems likely to be canceled to avoid the infection.

According to Reuters, 6 million people visiting the Oktoberfest in Munich every year and generates revenue of more than 1 billion euros to the city.