VAT reduction and child bonus: Who benefits from the stimulus package

The grand coalition wants to lead Germany out of the Corona crisis with a stimulus package worth 130 billion euros. Which corona aids are planned.

• The grand coalition has put together a stimulus package worth 130 billion euros
• It should help Germany to get out of the corona crisis *
• From the reduction in VAT to the children's bonus : these are the Corona aids

Berlin - The bomb has burst. The grand coalition has agreed on a stimulus package worth 130 billion euros. This rescue package is intended to lead Germany out of the corona crisis and prevent worse things, as Chancellor Angela Merkel (CDU) emphasized on Wednesday (03.06.2020). 

Above all, the decision aims to secure jobs, push innovations. People should again: buy, buy, buy. The 130 billion euros from the economic stimulus package are to be spent in the next two years. But who actually benefits from it? 

Economic stimulus package of the grand coalition: the children's bonus and daycare help

The first short answer: The families benefit . Each family receives a one-off payment of 300 euros per child entitled to child benefit. The bonus must be taxed, but the bonus is not counted towards the basic security. 

The federal government also wants to promote the expansion of kindergartens, daycare centers and crèches . The investment program for the expansion of all-day schools and all-day care is to be accelerated. Just under a billion euros will flow for this. 

Corona crisis: VAT cut in the wake of the stimulus package

Probably the biggest surprise is the temporary reduction in VAT . The grand coalition actually agreed to change the VAT rate from1. July to December 31, 2020 from 19 to 16 percent and the reduced rate from seven percent to five percent. 

21-hour coalition committee: a good result that conveys optimism and sets impulses for the economy and the climate: the core element is the reduction in VAT. We support families and local authorities and double the climate premium for electric cars.

This is intended to strengthen domestic consumption. Cost: 20 billion euros. 

Economic stimulus package: “Social guarantee 2021” for employees and employers in the corona crisis

Expenditures in all social security systems skyrocketed in the times of Corona . To prevent an increase in non-wage labor costs, social security contributions will be capped at 40 percent by 2021. "Social Guarantee 2021" scolds the coalition. 

There are billions in grants from the federal budget. What does that bring? The aim is to protect the net income of employees and bring reliability to employers. 

Climate friendliness is rewarded in times of Corona

Because environmental and climate protection by the corona virus was suddenly no longer so sexy for companies, the purchase of more climate-friendly trucks, airplanes and ships should now be  promoted.  

Economic stimulus package: purchase premium for electric cars doubles

Another hotly debated topic in the course of the economic stimulus package was the purchase premium for climate-friendly vehicles. There will be no purchase premium for low-emission petrol and diesel cars. Instead, according to CSU boss Markus Söder, demand is to be boosted by lowering VAT. 

There are higher premiums for the purchase of climate and environmentally friendly electric vehicles . The details are as follows: By the end of 2021, funding for electric vehicles with a net list price of up to 40,000 euros is to increase from 3,000 to 6,000 euros. In addition, there is funding from the manufacturers. 

In addition, 2.5 billion euros are to be pumped into the expansion of the charging network for electric cars. To ensure that the development of the automotive industry does not stall, there is a “bonus program” for 2020 and 2021 in the amount of two billion euros. The future investments of manufacturers and the supplier industry are specifically affected.

Corona help for municipalities: Tax losses are to be compensated

The corona crisis has also given the municipalities deep cracks in the till. There are high tax losses . Eventually, the most important source of income collapses with trade tax. The federal and state governments now want to compensate for these failures together. The federal government wants to take over six billion euros. 

Through this measure, the municipalities remain able to act and, above all, they can continue to invest. What applies to ordinary Otto consumers also counts for municipalities. Buy, buy, buy. 

Economic stimulus package in corona crisis: billions for companies 

Small and medium-sized businesses and self-employed should receive a "bridging aid  " of a maximum of 25 billion euros to prevent a wave of bankruptcies among small and medium-sized companies. It applies to sectors such as the hotel and catering trade, clubs and bars, travel agencies and showmen.  

In the course of the Corona crisis, the grand coalition agreed on an economic program for Germany worth billions. 

© Fabian Sommer / dpa

Fixed operating costs of up to 150,000 euros for the months of June to August are reimbursed. In addition, there is a one billion euro aid package for art and culture. 

Stimulus package: cut energy prices 

Companies and citizens should be relieved of energy prices . Not so easy when the EEG surcharge threatens to rise sharply due to the corona crisis . For example, from 2021 the subsidy for the promotion of green power plants is to be reduced by subsidies from the federal budget. 

The goals: 

• The levy is expected to be 6.5 cents per kilowatt hour in 2021. 
• In 2022 it is expected to be six cents per kilowatt hour. 

The levy is currently 6.76 cents. Citizens pay these via the electricity bill. 

The rescue of Deutsche Bahn: stimulus package provides DB with billions of euros

Due to the enormous loss of revenue at Deutsche Bahn in the wake of the corona pandemic, the federal government has put together a substantial aid package here too. In concrete terms, this means that the federally owned group will be provided with additional equity capital of five billion euros. In addition, aid of 2.5 billion euros is planned for local public transport. 

Economic stimulus package in Germany: tax relief and investments

Generally, financially troubled companies are to be helped. Planned  tax relief for companies . The coalition also wants to improve the depreciation rules to encourage companies to invest. 

Equal to 50 billion euros for the coming years includes a future package . The aim is to step up investments in future technologies. For example, funds for artificial intelligence will be significantly increased. The expansion of the super-fast new 5G mobile communications standard is also to be accelerated. 

Economic stimulus package - the coalition has agreed on this. https://t.co/qtwSWbX0OP

To keep the job market flourishing, companies also receive bonuses for apprenticeships . And: bankruptcy proceedings are to be reduced to three years. 

Lessons learned from the Corona crisis: emergency reserve planned

In order not to be caught on the wrong foot in the next pandemic, Germany is already arming itself . In-house production for important medical items is to be increased, and the establishment of a national emergency reserve is planned. 

In addition, billions of dollars are invested in hospitals .  

* fr.de is part of the nationwide Ippen-Digital editors network

Rubric list picture: © Michael Kappeler / POOL / AFP