Coronavirus (COVID-19) briefing: Information & updates for entrepreneurs in Germany

updated on 30. March 2020 20 minutes reading time
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Almost every business in Germany will be affected directly or indirectly by the current state of emergency surrounding the corona pandemic – or is already affected.

We at want to help companies, startups and freelancers to stay well informed in this crisis so that we can master it together. Regular updates will follow.

Please stay safe!


Status as of 23 March 2020
We try to keep you up to date during this time. However, as there are updates almost every hour, we cannot guarantee that all information is up-to-date. We ask for your understanding.




Reduced hours compensation (Kurzarbeitergeld)

There are new eligibility rules for applying for compensation for reduced hours due to the COVID-19 pandemic. These already apply retroactively from 1 March 2020 and are likewise paid out retroactively.

Relief for companies from 1 March

  1. Loss of work (Arbeitsausfall): Entitlement to reduced hours compensation exists if at least 10% of the employees have a loss of earnings of more than 10% (threshold previously 30%).
  2. Temporary work (Leiharbeit/ Zeitarbeit): Reduced working hours compensation can also be applied for temporary workers. Any corresponding social security contributions (Sozialversicherungsbeträge) amounts that were paid to the insurers are reimbursed at 100%.
  3. Working time balances/Timesheets (Arbeitszeitsalden): The creation of negative working time balances/working time accounts/timesheets before the payment of reduced hours compensation can be partially or completely waived. This relief applies to employment contracts that contain regulations on working time fluctuations.

It is based on the Act on the temporary crisis-related amendment of the regulations for reduced hours compensation (13.3.2020, Federal Law Gazette I 2020, p. 493 ff.). In German, this is called the Gesetz zur befristeten krisenbedingten Verbesserung der Regelungen für das Kurzarbeitergeld (13.3.2020, BGBl. I 2020, S. 493 ff.).

Here you will find the most important FAQs on reduced working hours and reduced hours compensation answered. (This article is currently only in German but we’re working on the English version)

Source: Website of the Federal Government

Reduced working hours: Submitting an application

Important: Before you submit an application for reduced hours compensation for your employees, you must first report the reduced working hours to the employment agency (by telephone or online). Otherwise, your KUG application will not be processed.


Employer Service of the Federal Agency (Arbeitgeber-Service der Bundesagentur): 0800 – 455 55 20

Indication of loss of working hours (Anzeige über Arbeitsausfall) [PDF]

Application for reduced hours compensation (Antrag auf Kurzarbeitergeld) [PDF]

You can find further information on how to contact the agency directly on the website of the Federal Employment Agency (Bundesagentur für Arbeit).


Emergency aid, subsidies, loans (Soforthilfe, Fördermittel, Kredite für Unternehmen)

The Federal Ministry of Economics (Das Bundesministerium für Wirtschaft – BMWi) has presented a plan to provide financial support to companies during the COVID-19 epidemic.

Update from 20 March 2020: The German government announces a new corona rescue package worth billions.

Current help hotline for entrepreneurs: 030 – 18 615 1515


  • ERP startup loan and KfW entrepreneur loan (ERP-Gründerkredit und KfW-Unternehmerkredit)
    • Relaxed conditions for existing companies and entrepreneurs.
    • Increase in risk assumption to 80%.
    • Access also for large companies up to €2 billion in turnover.
  • KfW Loan for Growth (KfW-Kredit für Wachstum)
    • Access extended to companies up to a turnover limit of €5 billion.
    • Increase in risk assumption to 70%.
    • Case-by-case assessment for companies above the €5 billion turnover threshold.
  • Additional special programmes possible (approval by EU Commission still pending)
Corona aid from KfW

Bank guarantees (Bankbürgschaften)

  • Decisions on guarantees for amounts up to €250,000 are made within 3 days.
  • Doubling of the guarantee ceiling to €2.5 million.
Financing portal of the guarantor banks and investment companies (Finanzierungsportal der Bürgschaftsbanken und Beteiligungsgesellschaften)

Large Guarantee Programme (Großbürgschaftsprogramm)

The support programme for companies in structurally weak regions now also supports companies outside these regions.

Export credits (Exportkredite)

The Federal Government provides export credit guarantees (Exportkreditgarantien/Hermesbürgschaften/Hermesdeckungen).

Subsidies at the state level (Fördermittel auf Länderebene)

Many state and development banks currently support regional companies with special loans. We will inform you in detail and promptly.

Here you will find the latest information from the Federal Ministry of Finance.


Tax relief (Steuerliche Entlastungen)

In order to ease the tax burden in the coronavirus crisis period and to promote liquidity, some measures have been taken under the name of Schutzschild für Beschäftigte und Unternehmen (protection shield for employees and companies).

Special tax regulations

  1. Relief for interest-free tax deferral (Steuerstundung) due to slump in sales (in case of considerable hardship).
  2. Relief granted for tax prepayments (Vorauszahlungen) (trade and corporate income tax/Gewerbe- und Körperschaftsteuer).
  3. Enforcement actions (Vollstreckungsmaßnahmen) and late payment fines (Säumniszuschläge) will be suspended until the end of 2020 (subject to the condition that the consequences of the coronavirus crisis can be proven to have had a direct impact).
  4. Announced ‘concessions’ (Entgegenkommen) from the tax authorities for certain types of taxes (energy tax/Energiesteuer and air transport tax/Luftverkehrsteuer, turnover tax/Umsatzsteuer, insurance tax/Versicherungssteuer)

You will find many practical tips for the application process in the Deutsche Handwerks Zeitung (in German).

  • Further measures are planned but will be decided at the state level. Therefore, please inquire directly at your responsible tax office.
  • A Corona Response Initiative of the EU Commission is also being planned to mitigate economic damage.
  • At the state level, further rescue packages are currently being discussed or already implemented.


Tax law deadlines in

An assessment is currently being made as to whether an extended deadline for submitting tax returns (Steuererklärungen) and tax balance sheets (Steuerbilanzen) is an appropriate measure to help businesses. No decision has yet been made (status as of 20 March 2020).


Shop closures and leases (Ladenschließung und Pacht)

Quite a few tenants and leaseholders of retail shops are asking themselves the question of whether rental or lease payment obligations in commercial leases will continue to exist in view of the Corona crisis. Unfortunately, the legal situation here is not clear and depends on the individual case – unless, of course, explicit contractual agreements have been made for such exceptional situations. In the case of public law restrictions on operations, case law assumes that these generally relate the tenant’s ‘risk of use’ (Verwendungsrisiko) and therefore unlikely to constitute a ‘deficiency of the rental object’ (Mietmangel).

Business operators who are no longer able to pay rent due to lack of income should, therefore, contact their landlords and find a practicable solution together. Given the current situation, it would be desirable for landlords to be accommodating despite the unclear legal situation.

Some landowners in Hamburg are already taking action not to place an additional burden on commercial enterprises (source: NDR). Practicable, mutually agreeable solutions for both parties include deferments, rent reductions or even rent waivers.

Source: Legal Tribune Online (Status as of 20 March 2020)


Loss of earnings due to COVID-19

Compensation in case of ban on activity and quarantine measures

Many companies have already been forced to close down parts or all of their operations or are expecting corresponding bans on activities or quarantine in accordance with the Infection Protection Act (Infektionsschutzgesetz §§ 30, 31, 34, 42 IfSG). However, the obligation to pay social insurance continues to apply.

Important: Compensation payments are not provided for closures of operations, event bans, etc.

Compensation for loss of earnings is possible in accordance with § 56 Para. 3 of the Protection against Infection Act. Employers must submit a valid application for this.

An overview of the responsible authorities can be found here (in German).


  • The decision of the public health department concerning the ban on activity or the ordered quarantine.
  • Actual loss of earnings.
  • Persons suspected of being infectious, ill or a carrier of pathogens are eligible to apply.

Important: Voluntary quarantine measures are not covered by this regulation.

Compensation for self-employed persons (Entschädigung für Selbständige)

In the case of self-employed persons, the loss of earnings per month is calculated on the basis of one-twelfth of the annual earned income (§ 15 SGB IV). According to the general regulations for determining profits under income tax law, the determined profit from self-employment is decisive. The last income tax assessment (Einkommensteuerbescheid) serves as proof. In addition, expenses for private social security (private soziale Sicherung) can be claimed in accordance with § 58 IfSG.

Source: City of Berlin press release (18 March 2020)

Force majeure compensation (Entschädigung wegen höherer Gewalt)

This concerns companies expecting losses in international trade transactions. First of all, a look at the contractual framework: If there is a so-called force majeure (Höhere Gewalt) clause in the contractual agreements, companies must now carefully examine whether they can apply it and, if so, what consequences are derived from it, such as:

  • Termination of contract (Vertragsauflösung)
  • Suspension of contractual obligations (Aussetzung der Vertragspflichten)
  • Special right of termination according to agreed duration (Sonderkündigungsrecht nach vereinbarter Dauer)
  • Claims for damages (Schadensersatzansprüche)
  • Reimbursement of expenses (Aufwendungsersatz)

Force majeure is in most cases not precisely defined. However, many legal systems include epidemics, natural disasters, political unrest or war. As evidence, official instructions to close operations, quarantine orders and travel warnings are a strong indicator that an act of force majeure has occurred.

Regional IHK’s such as the one in Berlin offers more information (in German).


Insurance cover for business interruption (Versicherungsschutz bei Betriebsausfällen)

Unfortunately, epidemics are rarely covered by conventional business interruption insurance. The occurrence of this risk is low, but the extent of damage is enormous. Epidemics are therefore considered an accumulation risk: that is, a single loss event results in many policyholders of an individual insurer suffering a loss at the same time. In such a scenario, the insurer is in the same boat as their insurees. For this reason, accumulations are generally excluded from insurance cover.

Please read your policies carefully and contact your insurer directly.


Insolvency: Obligation to apply suspended (Insolvenz: Antragspflicht ausgesetzt)

Due to the acute situation, the legal regulation on the obligation of managing directors to file for insolvency is suspended. However, the precondition for this is that the reason for insolvency is directly related to the consequences of the coronavirus epidemic. The suspension of the regulation applies until 30 September 2020.

The application period for insolvency is normally three weeks, otherwise, managing directors may be liable to prosecution for delaying insolvency.

Source: Press release of the Federal Ministry of Justice and Consumer Protection (Bundesministerium für Justiz und Verbraucherschutz) (16 March 2020)

Social insurance contributions (Sozialversicherungsbeiträge)

The social insurance law allows the payment of total social insurances contributions to be deferred (§ 76, Subsection 2, Sentence 1, No. 1, SGB IV).

Conditions for a deferral

  • Immediate payment would mean considerable hardship
  • Deferral does not jeopardise the claim of the insurers
  • Premium claims are deferred equally for all insurance providers.

Considerable hardship exists, for example, if there are serious payment difficulties due to economic developments or over-indebtedness that cannot be resolved in the foreseeable future.

The deferral must be applied for at the responsible health insurance company (central collection point). The deferral interest rate is 0.5% of the deferred amount and is rounded down to a full €50.

Source: IHK München

Occupational health and safety (Arbeitsschutz)

Duties of employers

At the present time, the protection of employees and customers is crucial. The Occupational Health and Safety Act (Arbeitsschutzgesetz) clearly states that employers are responsible for health and safety at work. This also means that measures have to be taken to make the work reasonable.

Duties of employees

Employees are obliged to report significant health and safety hazards immediately and follow the employer’s instructions. They can only be absent from the workplace if the provision of the work performance is unreasonable (“Erbringung der Arbeitsleistung unzumutbar” § 275 Para. 3 BGB).  This means that there must be a considerable objective danger or at least a serious objectively justified suspicion of danger to life or health. A voluntary quarantine because a colleague has coughed, for example, does not fall under this.

The consequences in terms of occupational health and safety and labour law during a pandemic and thus also the current coronavirus outbreak is of course much more complex. We are therefore currently preparing further information for you.

Incapacity to work and sick leave (Arbeitsunfähigkeit und Krankschreibung)

Since 9 March 2020, there has been a facilitated possibility to obtain a sick note in case of minor illness, which allows patients to avoid the risk of infection when visiting a doctor. The certificate of incapacity to work can be requested by telephone but is only possible for a maximum of seven days. For the time being, this regulation is valid until 9 April 2020.

Source: Press release GKV-Spitzenverband (9 March 2020)


Wage and salary payments (Lohn- und Entgeltfortzahlungen)

Incapacity to work due to illness (Krankheitsbedingte Arbeitsunfähigkeit)

If your employee becomes unable to work due to illness, the employee is still entitled to continued remuneration (up to a maximum of 6 weeks). The employer can apply for reimbursement of loss of earnings according to § 56 IfSG. More information about this above.


Childcare (Kinderbetreuung)

Since 16.3.2020 almost all schools, kindergartens and daycare centres have been closed. Many employees are therefore forced to look after their children in their own homes and are unable to work at all or only to a limited degree. At the same time they have to fulfil their work duties.

This dilemma is especially hard to overcome for the following:

  • Single parents
  • Parents of young children
  • Parents of children who require special or intensive care


Advice for employers

If your employees are currently unable to work due to the necessity of childcare, the following rules apply:

  • Employees may be absent from work for a short period of time without loss of income if the children cannot be looked after elsewhere.
  • According to current law (§ 616 BGB) this period is limited to a few (2-3) days.
  • In view of the acute situation, however, employers are called upon to find pragmatic and unbureaucratic solutions that prevent reductions in income for their employees, including:
    • Working from home
    • Flexible working hours
    • Reduction of overtime and time off
    • Making use of holiday leave

Federal Minister of Labour Hubertus Heil appeals to all employers to work together with the affected employees on flexible solutions and to support each other.

In view of the provisional school and daycare closures until mid-April, further exemptions under labour laws are expected.

Advice for employees

Information for The Federal Ministry of Labour and Social Affairs (Bundesministerium für Arbeit und Soziales – BMAS) clearly points out that childcare by grandparents or other elderly persons should be avoided, as they are particularly at risk.

Source: BMAS press release (15 March 2020)

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