CoVid 19: New Federal instruction on the adjustment of tax payments

On 19 March 2020, the Federal Ministry of Finance, in preparation for the envisaged oncoming liquidity crisis and in joint coordination with the supreme tax authorities of the federal states, published a new instruction regarding the calculation and treatment of tax payments and prepayments. Accordingly, on March 19, 2020, the supreme tax authorities of the federal states issued identical decrees containing measures relating to the determination of trade tax base amounts for the purpose of advance payments.

As in general businesses are obliged to make tax advance payments on their personal (in case of individual businesses or partnerships) and/or corporate income taxes, trade taxes as well as on their VAT obligations which are in principle calculated on their last year declarations, given the current crisis such prepayments might prove unduly burdenful for the current fiscal year. Prepayments may be adjusted for an ongoing fiscal year if there are reasons to assume that the expected profits shall not meet the former year income and turnover criterias. However, normally the adjustment procedure requires a formal application supported with hard data (eg. preliminary quarterly results)


Already stipulated tax prepayments (trade tax, corporate income tax and income tax as well as sales tax) should be reviewed. The tax authorities are instructed to make uncomplicated and quick adjustments upon request.


Tax payments due should, upon request and to the extent that tax payments cannot be made due to the effects of the COVID 19 pandemic, be deferred in principle without interest until 31 December 2020. Although it must be shown that the company or taxpayer is directly affected, it is not necessary to provide detailed evidence of the value of the damage incurred. The possibility of deferral does not apply in the case of withholding taxes, in particular wage tax and capital gains tax. In such cases, a deferral of enforcement could be considered in individual cases.


The tax authorities have been instructed to waive the enforcement of overdue tax debts (corporate income tax and income tax) until 31 December 2020. Legally applicable late payment surcharges are to be waived. In the case of trade tax liabilities, the respective municipality must be consulted, as the measures taken by the federal and state governments have no effect on trade tax.


The Federal Government (Bundesregierung) has presented a draft law on suspension of the Directors obligations to file for insolvency in an amendment of the existing Section 15a InsO (Bankruptcy law)

In an amendment to the currently existing Section 15a InsO the normal obligations of the directors of a corporation to file for insolvency within the standard 3 weeks period, is to be generally suspended until 30 September 2020. Only if the insolvency or over-indebtedness is not due to the consequences of the spread of the SARS-CoV-2 virus (COVID-19 pandemic) or if there is no prospect of eliminating an existing state of insolvency, the suspension does not apply by way of exception (Section 1 p. 2 COVInsAG).

The suspension is flanked by a generous presumption rule working in favor of the directors: If the debtor was not already insolvent on 31 December 2019, it is assumed that the reasons for the existing insolvency status is due to the effects of the COVID 19 pandemic and that there are prospects of eliminating an existing insolvency (§ 1 p. 3 COVInsAG).

The suspension represents a significant ease on the otherwise rather strict obligations of company management – in general, the directors are obliged to file for insolvency if a 3 weeks cashflow forecast of current liabilities and expected proceeds shows a coverage of less than 90%. A violation of this obligation results in severe liabilities for the acting directors – basically they become personally liable for each and every payment leaving the company after the criterias for insolvency were met.

In consequence the COVInsAG also limits the liability of the managers for payments leaving the company in the event of insolvency (Section 64 GmbHG, Section 92 (2) AktG, Section 130a (1) sentence 2 HGB and Section 99 sentence 2 of the Cooperatives Act) during the suspension period. It is precisely these liability norms that normally pose significant liability risks .

Insofar as the obligation to file for insolvency is suspended (see above), payments which are made in the ordinary course of business are deemed to be compatible with the diligence of a prudent and conscientious person and do not trigger any liability of the manager as a result (§ 2 para. 1 no. 1 COVInsAG). This applies in particular to such payments which serve to maintain or resume business operations or to implement a restructuring concept.

In addition the potential risk of a lender liability has also been limited.

Normally, the infusion of new capital into an ailing entity can result in a potential risk for the providing lender, unless specifically defined criteria (preparation of a restructuring audit and plan) are met.

Due to the corona crisis, it is currently hardly possible to make reliable forecasts and plans upon which the granting of restructuring loans are usually based.

Against this background, the legislator has ruled out the risks of avoidance of loan repayments and collateralisation as well as liability for intentional immoral damage (Section 826 of the German Civil Code) through the granting of loans (so-called lender insolvency procrastination) if the loans were granted during the suspension period and shall be repaid by 30 September 2023 at the latest (Section 2 (1) No. 2 COVInsAG).

Privileges for shareholder loans

The COVInsAG provides the shareholders with considerable incentive to participate in the financing to overcome the crisis caused by the coronavirus. Shareholder loans receive a significant appreciation through COVInsAG in the event of insolvency.

The standard subordination of shareholder loans under section 39 (1) no. 5 InsO is excluded for new shareholder loans if insolvency proceedings have been applied for in respect of the debtor’s assets by 30 September 2023. The same applies to securities of the shareholder (§ 44a InsO).

DSGVO-Abmahnung (2018)

General Data Protection Regulation – Can competitors issue warning letters for infringements for which the costs have to be paid?

The General Data Protection Regulation (GDPR) has already cost large companies in particular, a great deal of time and personnel. After the implementation deadline of 25 May 2018 has expired, it will increasingly come into focus for smaller companies, associations and the self-employed. In particular, since almost every company, every association and every self-employed person now presents themselves on their own websites or in social media on the Internet, all these companies and associations have to deal with the question of the extent to which they process personal data on their web presence and, accordingly, to what extent they have to provide information about this processing and the associated rights of the persons concerned.

In addition to this general obligation, there is also a more specific concern about receiving warning letters, for which costs must be paid, in the event that the instruction is ultimately incorrect or incomplete. In addition to the financial losses, such a warning is above all time-consuming and nerve-wracking for the person concerned.

The question therefore arises:

Is it possible for competitors to issue warning letters for breaching the GDPR’s duty to inform and instruct.
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Carrier’s liability before German courts for transported goods being damaged by refugees entering the truck

Liability lawsuits account for a considerable proportion of court proceedings in Germany in the field of transport law. German law and the Convention on the contract for the international carriage of goods by road (hereinafter referred to as CMR) both stipulate that a carrier has a limited liability for proven damage to the goods in his custody (based on the weight of the consignment). Nonetheless, in the case of so-called qualified fault, the carrier may also owe full compensation for the damage or he may be exempted from liability by providing proof of discharge. In practice, the insurance of the principal usually pays for the damage, whereby the claim for damages of the principal against the carrier is transferred to the insurance by operation of law. If the carrier (or his insurance company) refuses to pay, the matter is regularly brought to court. The jurisdiction of the German courts is based either on the provisions of the transport contract or on the law.

An interesting case concerning the carrier’s liability for damage to cargo caused by refugees travelling unrecognized in the semi-trailer was the last one I had in my practice as a lawyer. In December 2015, a German client commissioned a Polish transport company to carry out a transport from Germany to Great Britain. The drivers of the transport company drove to the Eurotunnel after being loaded in Germany. During a safety check in front of the Eurotunnel, it was established that several refugees were staying in the trailer. These were taken out of the vehicle by the French police, then the journey to Great Britain was continued and the consignment unloaded. An examination of the cargo revealed damage to the load. The transport liability insurance of the client paid for the damage and then claimed damages before a German court against the Polish carrier represented by me on the basis of an assigned right. The Koblenz Regional Court, which had jursidiction, dismissed the action brought by Verkehrshaftversicherung.
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Germany: Bundesgerichtshof – Use of third-party trade marks in Amazon – autocomplete function and hit list

Everyone knows this and has probably been annoyed by it on one or the other occasion: You enter a word, maybe even just a few letters of a word into a search engine on the internet, e.g. the Amazon search engine. A list of potential words and trade marks to search for is displayed. You are pleased, if in fact the brand you want to search for is among them and you click on this term from the list. A certain disappointment is inevitable if a long hit list is displayed, but no product of the desired brand appears in it, but only competitors’ products. This raises the following questions:

May Amazon, in its autocomplete function, name brands that neither Amazon itself nor third parties sell via the Amazon platform? Does a hit list have to contain a clarification at the beginning if only competitors’ products are displayed instead of the searched brand products? When entering or selecting a particular brand on internet platforms such as Amazon, does the internet user expect to be offered only products of that brand?

(Read more)


Germany: Amendments to the Warranty Law as of 1.1.2018

Up to now, a consumer who has installed a defective item into another item, such as a house, has not only been entitled to claim from the seller the

 delivery of a new and defect-free item, but also for assumption of the costs for removing the defective item and installing the new defect-free item. However, the seller was only able to pass on the installation and dismantling costs he incurred as a result of the supplementary performance to his supplier if the supply was at fault. If the supplier was not at the same time the manufacturer of the item, fault on his side was usually denied.

The same applied in cases where a craftsman was obliged to make subsequent performance at his customer’s premises due to defects in the material he used. He, too, was only entitled to claim reimbursement of the installation and dismantling costs incurred by him as a result of subsequent performance from the supplier of his material if the supplier was at fault.

The law of 28 April 2017, made changes to the law on defects under commercial law, which affect not only consumers but also entrepreneurs and suppliers within the supply chain. The corresponding amendments to the German Civil Code came into force on 1 January 2018.


Now the supplier must carry out the removal and installation or bear the costs connected with it in the context of his legal obligation to remedy defects not only in B2C relationships, but also in B2B relationships. (Read more)


Artikel: Labelling of advertising Lichter – BLPA

GER: Labelling of advertising by influencers in social media

Paid posts by influencers in social media, such as Instagram, Facebook, Twitter, YouTube etc. must be labelled as advertising, otherwise not only the influencer but also the advertising company can be hold liable for concealing the commercial purpose of the post (surreptitious advertising). This can lead to claims for restraining the influencer and/or the advertising company from publishing the post as was done, possible damage claims and also to the imposition of fines.

(Read more…)


Admissibility statement claim Polish Artikel Wypior

GER: Admissibility of a statement of claim in Polish language

By a court decision of 15.03.2017, file no. 4 K 18/17, the 4th Senate of the financial court Hamburg (Finanzgericht Hamburg) decided that if the court, out of its own motion, caused a translation of a statement of claim, drafted in Polish language and filed in time, the statement of claim is deemed filed within the deadline.
(Read more…)