Abolition of a competitive disadvantage: Payment date for Import VAT deferred to 26th of ensuing month – A good day for Hamburg as a hub
06.04.2020 01:00 Economy
The Corona pandemic has pushed some problems into the background, yet some have become more pressing than ever. One of these is the procedure for levying Import VAT.
The tying up of liquidity for Import VAT, later to be refunded, is increasingly causing shipments to be re-located. Even for the period after the present crisis, experience of this will considerably influence decisions by companies to the disadvantage of Germany as a hub. The question of which regions will see a reduction of their commitment, in which ones they should be investing in future, and how logistics chains can best be shaped financially, is preoccupying virtually the entire corporate world. This was already the case during the worldwide financial crisis ten years ago. After the German import and logistics sector had indicated the competitive disadvantages at centres in Germany, Hamburg was the first federal state to investigate the nature and extent of these. At Hamburg’s instigation, levying of Import VAT was put on the federal coalition government’s agenda. In recent months, this question has been examined more closely by an interdisciplinary working party staffed by central government, the states and business, and draft solutions developed. Today the Federal government’s coalition committee reached a decision on a joint application from Olaf Scholz, German Minister of Finance, and Michael Westhagemann, Hamburg Minister of Economics, Transport and Innovation: The due date for Import VAT will be deferred to the 26th of the following month.
Senator Michael Westhagemann: “I am delighted that the Federal government has now reached a decision and I should like express my thanks for this constructive cooperation. The solution impacts companies’ liquidity to the extent of approx. five billion euros. This puts companies in Germany on an equal footing with the competition from our European neighbours. Especially for Hamburg as a port and logistics centre, this is an important signal, at the same time underpinning jobs and tax revenues in Germany.”
The decision is to be implemented as rapidly as possible.
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