Germany defers but not waives beer tax

After suspending beer tax for German brewers until the end of the year, the German Government made clear that it suspends only the payment but not the beer tax at all. Some newspaper reported that the tax will be waived which is not correct.

Like many countries all over the world, Germany agreed two weeks ago on an unprecedented package of support to Europe's biggest economy worth hundreds of billions of euros to cushion the impact of measures to contain the novel coronavirus. Part of the aid is an offer aimed at enterprises to defer or to lower tax payments and advance tax payments. As people were unsure about which kind of taxes were included in the package, the Federal Ministry of Finance mad clear last week that beer tax payments are also part of the aid program.

However, some newspaper reported last week that tax payment was waived which is not correct. “In order to improve the liquidity of breweries in the current difficult situation and to protect jobs, the Federal Ministry of Finance and the state counterparts have agreed that the beer tax can be deferred”, a spokesman for the Federal Ministry of Finance told German media agency dpa yesterday. "The main customs offices are to accommodate the breweries to avoid undue hardship. Charging interest on the deferral can be waived, as a rule," the ministry spokesman said.

Germany has one of the lowest beer tax rates in the world. The standard tax rate per hectoliter is EUR 0.787 per degree Plato - the measure of the original wort content. A standard box with 20 bottles of 0.5 liters of beer is therefore subject to a beer tax of EUR 0.94. According to finance ministry figures, the 2019 beer tax is expected to amount to a total of around EUR 650 million.

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