Many entrepreneurs were granted immediate corona assistance of €9,000 as a result of the corona pandemic in spring 2020. If it turns out that the aid was not needed, it must be repaid. However, the question then arises as to the effect of the repayment of the immediate aid to Corona on the profits generated by the surplus income bill. In addition, it is questionable which risks threaten if the repayment is only made in the following year 2021 and how additional tax burdens can be avoided. All these questions are clarified in this article.

Are you self-employed within the meaning of § 18 EStG or are you as a trader not subject to accounting obligations due to statutory provisions You make your profit according to § 4 paragraph 3 EStG by the revenue surplus invoice. Then applies to the operating income and operating expenses of § 11 EStG. Accordingly, you have to take into account operating income at the time of inflow, for example when crediting to the account, and operating expenses at the time of outflow, for example when debiting to the account.

Corona emergency aid is a taxable operating revenue and must therefore be recorded in the context of the surplus income invoice. The reason for this is that the payment is made for operational and not for private reasons. In addition, you do not have the right to vote for the success-neutral treatment of the immediate corona aid according to R 6.5 paragraph 2 ESt, because the aid cannot be assigned to specific acquisition or production costs. Accordingly, the reimbursement of the emergency aid to Corona is also an operating expense. If the immediate Corona aid is paid out and the immediate Corona aid is repaid in one year, you only have to tax the difference between the two amounts.

If the immediate Corona aid is repaid in the years after receipt, you must make sure that you do the bookkeeping correctly. First of all, you have to tax the Corona helps with the tax return for 2020. This applies despite the repayment of the Corona emergency aid and even if it has already been received back. Only with the submission of the tax return for the year of repayment of the Corona emergency aid can you deduct the repaid amount as operating expense.

The problem is that there can be considerable fluctuations in income progression. It is also important to note that § 4(3) second sentence EStG does not apply to the repayment of the Corona emergency aid. Thus, although passing items are not included in the profit determination. But this is only money that you have collected and spent on behalf of and for the account of another. However, you have also received and spent the Corona emergency aid in your own name and on your own account if you have a corresponding repayment obligation. Therefore, it is not a success-neutral consecutive item.

Self-employed persons within the meaning of § 18 EStG are not subject to trade tax. Only traders within the meaning of § 15 EStG owe trade tax. The starting point for the business tax is the profit from business operations. This is determined according to § 7 sentence 1 GewStG according to income tax principles. Consequently, the repayment of Corona emergency aid also affects the business tax. If the immediate aid is paid out and repaid in one year, only the difference must be taxed. On the other hand, the payment and repayment of the Corona emergency aid can lead to a significant additional burden in different years.

The repayment of the Corona emergency aid in later years may have disadvantages. On the one hand, the progression can be postponed within the framework of the income tax. In addition, the immediate Corona aid may result in the allowance being exceeded under business tax and therefore subject to business tax. If, on the other hand, the Corona emergency aid is repaid in the year of disbursement, trade tax would not have been incurred in any of the years. However, according to § 35 EStG, the trade tax is to be charged up to a levy of 400 percent on the income tax. If the crediting takes place, there is also no additional burden. However, credit can be cancelled. if the income tax determination is not correspondingly high, for example due to losses from other types of income. Then the trade tax leads to a real additional burden.

You can avoid additional burdens by repaying the Corona emergency aid by voluntarily determining the profit for 2020 through a balance sheet according to § 4 I EStG. If it was already clear by 2020 that the emergency aid has to be repaid and you have already informed the authority about it, a provision for the amount of the expected repayment obligations would have to be set aside in 2020. This would reduce the profit by the repayment obligation and thus avoid the business tax burden.