The corona pandemic hits the German economy with full force. Turnover slumps. This also affects gastronomy, especially Chinese restaurants. Even before the measures taken by the federal and state governments, the number of guests dropped sharply. With the measures imposed against the spread of the Corona Virus / Covid-19, many Chinese restaurants have now had to close temporarily to at least reduce the losses. It remains a fact that despite the closings there are still massive economic losses. Now it is important for businesses, and especially restaurants, to survive until the virus is at least no longer a threat to public life.
Companies and restaurants can take the following measures to ensure their existence:
Securing liquid funds
The Kreditanstalt für Wiederaufbau, KfW, a German state-owned development bank, is currently providing low-interest loans with an effective annual interest rate of 1.00% to ensure ongoing operations. A further reduction is expected. Sangong law firm supports you with an efficient and quick application. Because only a completely submitted application guarantees the rapid release of funds. This is particularly true when many applications are now being received and have to be processed by the banks. It is important that the companies must have been economically viable before the crisis broke out. In some cases, a detailed explanation is required here.
In addition to KfW, the state banks (“Landesbanken”) have also set up corresponding support programs.
Short-time work allowance (“Kurzarbeitergeld”)
Chinese gastronomy is also affected by the fact that employees can no longer be adequately employed due to a lack of customers. In this case, the government decided on March 10, 2020 to draft Arbeit-von-morgen-Gesetz (roughly “Work of Tomorrow Act”). This gives the Federal Ministry of Labor the opportunity to implement short-term measures to relieve companies by ordinance. The state pays at least 60% of the net of tax wages for a period of 12 months. It is also important to submit a quick application here. Sangong law firm supports you in this case.
Sales tax / VAT, taxes in general
Sangong law firm is hearing from many Chinese restaurant owners that current taxes cannot be paid to the tax authorities and local authorities or can no longer be paid in full. This applies in particular to advance sales tax payments (“advance VAT payment”). These are payments by the entrepreneur on future sales tax / VAT. As a rule, such an advance payment is made in order to obtain a so-called long-term extension from the financial administration, i.e. the opportunity to submit a VAT return later than planned. Since the gastronomy is particularly strong in cash flows, there are usually very high advance payments on sales tax / VAT for restaurants. Sangong law firm is committed to support you reducing ongoing advance payments on sales taxt / VAT.
In addition, Sangong law firm is also available to help you reduce or suspend ongoing advance payments for income and corporate tax. Sangong law firm also assists you in deferring tax payments and in defending against financial management enforcement measures.
Negotiations with suppliers
Especially in the restaurant business, many companies enter into so-called permanent obligations, i.e. contracts that last for several years and are often also associated with the mandatory acceptance of products. One example is supply contracts with breweries or food suppliers. Since breweries in particular grant a loan in return for a minimum purchase of their goods for a longer period, it is usually not easy to end these contracts. Sangong law firm assists you in contract negotiations with suppliers to reduce your running costs. Especially with the example of a service and beverage procurement contract, as it is concluded between a restaurant and a brewery, there are some special features to consider. In German law exists a legal concept called “Störung der Geschäftsgrundlage”, which describes a fundamental change of circumstances. It is regulated in § 313 German Civil Code. It enables, under certain conditions, which are to be determined in each case individually, an adjustment of contract contents to changed conditions.
With Sangong law firm you have a strong partner for your legal concerns at your side. Contact us now in German, Chinese or English.
This text is available in German and Chinese. Just go to the News section on your preferred language.