German Government Approves COVID-19 Stimulus Package Including Several Tax Measures

On 3 June 2020, Germany's governing coalition approved a EUR 130 billion stimulus package for 2020 and 2021 in response to COVID-19. The package, which must still be approved in parliament, includes the following main tax measures:

• a temporary reduction in VAT rates, which includes that from 1 July to 31 December 2020, the standard 19% VAT rate is reduced to 16% and the reduced 7% rate is reduced to 5%;
• an increase in the loss carryback relief that has been introduced for COVID-19 from a max…