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On 6 May 2020, the Federal Government passed a draft law on the implementation of tax relief measures to deal with the Corona crisis ("Corona Tax Relief Act"). The previous transitional regulation, which applies until 31 December 2020, is to be extended until 31 December 2022 for all legal persons under public law.

The extension of the option period is justified by implementation difficulties, a significant worsening of the situation due to the current Covid 19 pandemic, and the fact that work on implementing the new provisions of Section 2b UstG has largely come to a standstill in the context of the acute crisis. Public interest reasons as well as the fact that no significant distortions of competition have been identified in the transitional period since 2016 justify the extension, which is also known to the EU Commission and has not been objected to by it. In our opinion, the extension of the option period is now only a question of form.

Irrespective of this, we recommend continuing to pursue the work to prepare for an orderly change to the new taxation system, especially with regard to the use of any tax advantages of § 2b UStG in the context of early application by submitting corresponding declarations to the tax office.

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