German offers tax carrot to small firms

BERLIN: The German government will extend indefinitely a sales tax break for small and mid-sized firms that were due to expire at the end of the year, the finance ministry said on Friday.

In a largely symbolic concession to the country's tax cut lobby, Finance Minister Wolfgang Schaeuble plans legislation allowing firms with annual revenues up to 500,000 euros to defer sales tax payments until clients pay their bills rather than when invoices are sent.

A ministry spokesman said a report in daily Berliner Zeitung saying Schaeuble's initiative would be worth 2 billion euros was incorrect. The only cost to the state would be interest lost over the duration of the deferral.

Copyright Reuters, 2011