Legal Changes in Germany for 2020

Companies, investors and entrepreneurs in Germany will be faced with a number of legal changes again in 2020. Here we give you an overview:

Incoterms 2020

Not directly linked to German law, but very important for cross-border transactions are the Incoterms. With the Incoterms 2020, the International Chamber of Commerce  updates its standard contractual clauses for the trade in goods again after ten years. In addition to minor adjustments, the Incoterms 2020 also contain a new clause, "DPU" (Delivered at Place unloaded), which replaces the previous "DAT" (Delivered at Terminal) clause. Both clauses include the obligation to unload the goods at the place of delivery.

Minimum wage

On January 1, 2020, the statutory minimum wage in Germany was raised from EUR 9.19 per hour to EUR 9.35. This (moderate) increase may have considerable consequences: Whereas a so called 450-euro jobber was previously able to work 49 hours in a month without social insurance, since the beginning of the year only 48 hours remain. For contracts that make full use of the EUR 450 limit, the scope of employment should therefore be adjusted. Otherwise there is a risk of social security contributions being levied.

Minimum remuneration for trainees

The German Vocational Training Act (“Berufsbildungsgesetz”) as of January 1, 2020 sets a lower limit for the remuneration of trainees. In the first year of training, a trainee must in future receive at least EUR 550 per month; in the following years of training, the salary will increase by 18%, 35% and 40% respectively. The lower limit will also be raised gradually to EUR 620 per month in the next three years. However, only those trainees who start their vocational training in 2020 will benefit from the new regulation; for older trainees, the existing contracts may remain unchanged.

Skilled Workers Immigration Act

As of March 2020, new rules will apply in Germany for the immigration of skilled workers. One of the central new regulations is the standardization of the concept of skilled workers: In future, university graduates and employees with qualified vocational training will have equal status for immigration purposes. The amendment also abolishes the so-called priority assessment and the limitation to occupations subject to shortage. In the future, it will therefore no longer be checked whether a vacant position could be filled primarily by a German or EU applicant or whether the skilled worker applies for a position in an occupational branch that is particularly affected by a shortage of skilled workers.

Digital certificate of incapacity for work

A central element of the third law to reduce bureaucracy in Germany is the abolition of the "yellow slips" for sick leave. In future, employers will be able to call up the certificates of incapacity for work of statutorily insured employees electronically from the health insurers. The procedure will be compulsory from the beginning of 2021. Companies should therefore review and adapt their systems and processes accordingly in the course of the year.

Property Transfers

Originally, the Annual Tax Act 2019 was supposed to contain a reform of the Real Estate Transfer Tax Act (“Grunderwerbsteuergesetz”); however, this has been postponed for the time being. It is still planned to raise the real estate transfer tax more frequently than before, even if not a property but a company holding a property is transferred. At present, the tax is only due if 95% of the shares of such a company are transferred within five years; in future, it is planned that 90% of the shares being transferred within ten years should suffice.

Levy of the Renewable Energy Sources Act: electricity more expensive in 2020

Customers of electricity providers in Germany must prepare for higher energy costs this year. The levy under the Renewable Energy Sources Act (”Erneuerbare-Energien-Gesetz”) is to rise by 5.5% to 6.756 cents per kilowatt hour in 2020. For an average household with four persons and an annual consumption of 3,500 kilowatt hours, electricity costs are thus likely to rise by just under 13 euros per year.

Harmonization of sales tax law

On January 1, 2020, the so-called Quick Fixes of the EU, which form a preliminary stage of a comprehensive restructuring of the European VAT system, were incorporated into German VAT law. This (among other things) closed a central gap in the taxation of consignment deliveries. Until now, deliveries and withdrawals have been taxed on the basis of national law (and thus inconsistently). In the future, national regulations will provide uniform conditions for determining when the cross-border intermediary of a consignment warehouse is to be considered an intra-community supply.

Protection against manipulation in cash register systems

Since January 1, 2020, all electronic cash register systems must have a certified technical security device that guarantees that the basic digital records of a POS system are complete and unchanged; existing POS systems must be upgraded within three years. Fines of up to EUR 25,000 may be imposed in the event of infringements, and companies that use an electronic POS system are also obliged to report this to the responsible tax authority by January 31, 2020. The new regulations are accompanied by the authorization of a so-called cash register review. In future, the tax authorities will be able to check the correctness of records and bookings of cash receipts and expenditures even outside of an external audit.

Obligation to issue receipts

In addition, since January 1, 2020 there has been an obligation to issue receipts. In future, all users of electronic cash register systems will be obliged to provide their contractual partners with a cash voucher for every business transaction requiring recording. The law does not provide for a general exemption for certain business transactions (e.g. for payments below a certain amount). However, the tax authorities can provide for exemptions in individual cases or for certain groups of cases. If, for example, document output will lead to considerable queues at cash desks, companies can apply for an exemption.

Packaging Act: The first declaration of completeness was due

The new packaging law has been in force in Germany since January 2019. Anyone who puts filled packaging into circulation that typically accumulates as waste after use by a private end consumer must ensure that it is taken back and recycled in a take-back system. By May 15th of each year, companies must submit a so-called declaration of completeness in which they declare all packaging put into circulation in the previous year. This declaration is due for the first time on May 15, 2020. Fines of up to EUR 200,000 may be imposed for infringements.

Ban on plastic bags from 2020

The German Federal Government has passed a draft law banning plastic bags, which is expected to come into force in the first half of 2020. This will affect lightweight plastic carrier bags. Excluded from the ban are very thin bags issued by supermarkets for fruit and vegetables as well as more stable carrier bags with a wall thickness of 50 micrometers or more.

Compliance

The draft of a “Law on Combating Corporate Crime" (“Gesetz zur Bekämpfung der Unternehmenskriminalität“) by the German Federal Ministry of Justice is the political reaction to various economic scandals, not least the Diesel issue. The law on sanctions for companies is to be considerably tightened and the range of fines drastically increased. Nothing has been decided yet; but the legislative process already gives sufficient reason to put the compliance organization of companies to the test. Only those who have made a sincere effort to comply with the law - and can document this accordingly - can hope for leniency in the event of a violation.