Welcome to the high-level summary of Covid-19 related actions by Austria. The details and links below have been split between “Tax Filings Affected”, “Government Employee Wages Benefits Programs” and “Government Loan Programs”; and are extracts from the more detailed information available on the websites of Austrian Praxity Participant firms’ websites, links to which are available at the bottom of this page. Praxity Participant Firms in the Austria are Attesta, LeitnerLeitner, Mazars, Rabel & Partner
Tax Filing Affected
Sales Tax (Value Added Tax) For a transition period of 6 months as of July 1, 2020 to December 31, 2020 a reduced VAT rate of 5 % was introduced for the following supplies: Gastronomy
- The sale of food and drinks which are intended for immediate consumption in a restaurant etc ( in the meaning of the Austrian Trade Regulation Act).
- Also catering services or take-away services from restaurants etc might be subject to the reduced VAT rate.
- The reduced VAT rate is applicable for hotels, private accommodation services, provision of holiday flats and apartments and ancillary services (e.g. provision of breakfast) as well as the letting of land for camping purposes (within the campsite).
- However, the reduced VAT rate of 5% does not apply to the letting of immovable property for residential purposes. This remains subject to the reduced VAT rate of 10%.
- Supplies, imports and intra-Community acquisitions of books, brochures, newspapers and other periodical publications, picture albums, picture books and drawing or coloring books for children, sheet music, cartographic products of all kinds.
- The reduced VAT rate basically also applies to electronic publications (e.g. e-books, e-newspapers, audio books).
- Imports of certain works of art (paintings, tapestries, textile goods etc),
- Supplies by performing artists
- Admission to theater, circus, concert, museum, cinemas etc.
An extension of the 5 % VAT rate for the period of December 31, 2020 was already announced by the Austrian Government, but not introduced so far. Corporate Income Tax Advanced loss withholding means loss carryback addition to the existing possibilities of loss offset (see below) companies can use their tax losses - from the year 2020 - thus negative income in operating income categories rear wear in the past tax years 2019 and 2018 and thus compensate, where appropriate, with profits this year. The loss carryforward is open to both companies within the scope of the EStG and the KStG. The following further key points of the loss carry-back should be pointed out: The loss is carried back at the request of the company, according to which there is an option to carry back or carry forward the losses in 2020. If the option is used, the loss is primarily to be carried back to 2019. Remaining losses should be able to be carried back to 2018 - with further restrictions laid down by ordinance.
- The amount of the loss carried back is limited to a maximum of EUR 5 million .
- The loss carry-back goes before a special issue to be considered loss carryforward and is therefore determined on the level of total income .
- For groups of companies according to § 9 KStG there are special regulations (e.g. consideration of the loss carry-back solely at the level of the group parent) in order to keep the complexity and the administrative effort low. The special regulations are to be specified by means of an ordinance.
COVID-19 Tax Measures Act On December 10, 2020, the National Council passed the COVID-19 Tax Measures Act, which provides for various individual measures for tax law. We would like to inform you about the most important measures: 1. Facilitated payments
- For tax deferrals that are legally approved until January 15, 2021 (e.g. UVA, LSt April 2020), an official extension of the deferral until March 31, 2021 is provided (Section 323c (11a) BAO).
- For duties that are due between October 1, 2020 and February 28, 2021 (e.g. UVA, LSt November 2020), there is an official deferral until March 31, 2021 (Section 323c (11b) BAO).
- Separate requests for deferral are not required, so that - unlike in spring 2020 - no liquidity bottleneck can be made credible. It is sufficient not to pay the taxes covered by the new regulation.
- No deferred interest or late payment surcharges apply until March 31, 2021 (Section 323c Paragraph 13 and 15 BAO).
- For additional claims in connection with the assessment periods 2019 and 2020, no claims interest is charged (Section 323c (14) BAO).
2. Income tax
- The small business flat rate has been adapted to align it with the small business regulation in the UStG. In addition, it was clarified that the UGB does not apply to the degressive depreciation introduced by the Economic Boost Act.
3. Income tax
- A significant relief was introduced for foreign employers without a domestic permanent establishment with domestic employees. The obligation to deduct income tax for employees with unlimited tax liability in Austria, which was only introduced in 2020, does not apply if there is no Austrian permanent establishment. Voluntary income tax payments are still possible.
- The new regulation applies retrospectively for periods from January 1, 2020. If wage tax was deducted during this period, this is considered a voluntary wage transfer.
- If the foreign employer does not (voluntarily) continuously deduct income tax for a domestic employee, there is an obligation to submit a wage slip (L17) from January 1, 2021 under certain conditions.
4. Corporation tax
- In the area of corporation tax, a so-called “interest barrier” was introduced. The legal background is provided by Union law (anti-BEPS directive).
- The interest barrier essentially limits the interest deduction to a maximum of 30% of the taxable EBIDTA, but no more than EUR 3 million per year (Section 12a KStG).
- The interest barrier comes into force on January 1, 2021 and is to be applied for the first time for financial years beginning after December 31, 2020 (Section 26c Z 80 KStG).
5. Sales tax
- The reduced sales tax rate of 5% for sales in the catering, hotel and cultural industries will be extended until December 31, 2021. The same applies to books. However, this tax rate of 5% will not be extended for newspapers and periodical printing.
- One new proposal also a reduced rate of 10% for services for repairing bicycles, shoes, leather goods, clothing and household linen and certain feminine hygiene products .
- In addition, a (real) tax exemption for COVID-19 in-vitro diagnostics and COVID-19 vaccines as well as other closely related services will be introduced until December 31, 2022.
2nd COVID-19 Tax Measures Act For valid, statutory tax deferrals (e.g. UVA, LSt April 2020), a further official extension of the deferral until June 30, 2021 (previously March 31, 2021) is planned (Section 323c (11a) BAO). Taxes that were or will be due between October 1, 2020 and May 31, 2021 (e.g. UVA, LSt February 2021 or the 2019 corporate tax notification sent in March 2021) are automatically payable (without a separate application) until June 30, 2021 deferred (Section 323c Paragraph 11b BAO). No deferred interest or late payment surcharges apply until June 30, 2021 (Section 323c Paragraph 13 and 15 BAO).
Government Employee Wages Benefits Programs
Short- Time Work Short-time work is the temporary reduction of working hours and, as a consequence, of wages and salaries due to economic difficulties. The employer's additional costs for the continued employment of the employees are subsidized by the short-time work support of the AMS (employment office). The purpose of short-time work is to temporarily reduce labor costs and at the same time to retain employees. With the special model of corona short-time work, the working hours of the affected employees can also be temporarily reduced to 0%. This measure is useful if the company is affected by a plant closure or can only be maintained to a limited extent due to a decline in orders and/or delivery bottlenecks. 1.2. Principle of short time work The basic requirement for inclusion in short-time work is a period of employment for at least one fully paid calendar month before the start of short-time work. Employees who have not met these requirements may not be included in the application for short-time work. During short-time work, employees receive part-time remuneration from their employer for the agreed reduced working hours and additional short-time work support, which ensures that the employee receives the net replacement rate to which he is entitled. The net replacement rate is either 80 %, 85 % or 90 % according to the following schedule:
- Employees with gross wages above EUR 2,685.00 receive 80% of the net compensation received before short-time work,
- employees with gross wages between EUR 1,700.00 and 2,685.00 receive 85%,
- employees with gross wages below EUR 1,700.00 receive 90%.
The AMS pays short-time work support to the employer in the amount of the additional costs incurred by the employer compared to part-time employment. A highly simplified example: Due to the economic difficulties, an employee can only be employed to the extent of 50% of his or her previous working hours. With the short-time work agreement, the working hours are reduced to 50%, the employee loses 20% of his salary and the remaining difference of 30% is replaced by the AMS. The total costs for the employer are thus only 50% of the previous personnel costs. 1.3. Third phase of short-time work In October 2020, the third phase of short-time working began, which provides for more restricted access to this subsidy. The following conditions must be considered for qualifying for the subsidy. 1.3.1 Economic justification In addition to a brief description of the reasons why short-time work is necessary, access to phase III requires explanations of what contribution short-time work makes to crisis management and what other measures are also planned (Appendix 1 "Wirtschaftliche Begründung"). In addition, it must be stated which other COVID-19 subsidies have been approved (hardship fund, fixed cost subsidy, bridging guarantees, tax deferrals). The core of the supplement on the economic justification is a list of the monthly sales (excluding other income) from March 2019 to the last available month and a forecast about the expected sales in the requested short-time working period. If the drop in sales is less than 15% compared to the same period in the previous year, the social partners conduct an individual assessment. If the turnover (alone) is not meaningful for the reason for economic difficulties, an additional economic key figure can be given and explained why this is more meaningful (incoming orders, work volume, etc.). If short-time work is requested for more than 5 employees, a tax advisor / auditor / accountant must confirm that
- the specified sales (and any additional key figures) are correct
- the information on the approved funding is correct
- the sales forecast (and any additional key figures) is not obviously implausible
1.3.2 Reduction of working hours In contrast to the previous phases I and II, the working hours in phase III must be between 30% and 80% of previous working hours. A reduction in working time to a minimum of 10% is only possible by means of an additional application (Appendix 2 to the social partner agreement - "Falling below the minimum working time"). A special economic justification is required so that the lost hours may be more than 70%. For companies that are directly affected by the second lockdown in November 2020 (official closure of business), there are the following options for going below the limit of 30 %:
- In November or for the time of the lockdown, work performance can be reduced to 0%. If this means that the average work performance falls below 30% or 10% during the short-time work period, this is permissible.
- For affected companies that have already applied for phase III short- time work since October 1, 2020, a retroactive reduction to below 30% is also possible.
If the 80% limit is exceeded during short-time work due to an improvement in the economic situation, according to the current information, this will not lead to the elimination of short-time work allowance. 1.3.3 Basic, advanced and advanced training during short-time work For employees who are on short-time work from October 1, 2020, there is a mandatory readiness for training, further education and training at educational events offered by the employer. The employee's obligation to participate is in the amount of the previous normal working hours (before short-time work). However, the offer of further training opportunities on the part of the employer is not a requirement for the subsidy.
COVID-19 update to home office With the 2nd COVID-19 Tax Measures Act (decision of the National Council on February 24, 2021), the tax part of the home office package was decided retrospectively from January 1, 2021. However, it remains to be seen whether the labor regulations will become law. 1.1 Home office flat rate of up to EUR 300.00 pa (§ 26 Z 9 EStG) For periods from January 1, 2021, the employer can pay a home office flat rate of up to EUR 3.00 per day for a maximum of 100 home office days per Calendar year - thus a maximum of EUR 300.00 - non-taxable. The exemption applies to wage tax, social security contributions and ancillary wage costs (DB, DZ, KommSt). Only days on which the professional activity is carried out in the home count as home office days. Since a home office flat rate and the number of home office days in the respective calendar month do not have to match, a fixed monthly amount of EUR 25.00 can also be granted. However, the tax-free maximum amount must be checked by the employer based on the actual home office days at the end of the calendar year. If, for example, it turns out that there were only 90 home office days in the calendar year, a maximum of EUR 270.00 may be left tax-free and EUR 30.00 must be subsequently taxed. If several employers leave a total of more than EUR 300.00 tax-free in a calendar year, the part of the home office flat rate exceeding EUR 300.00 will be post-taxed as part of the employee tax assessment (compulsory assessment). 1.2 Business expenses according to the employee tax assessment If the employer pays no home office flat rate or a lump sum less than EUR 3.00 / home office day, the employee can claim (difference) income-related expenses as part of his employee tax assessment (Section 16 (1) Z 7a EStG) - proof of specific expenses for the activity in the home office is not required. However, if the employee claims expenses for digital work equipment (computer, printer, monitor, keyboard, etc.) as business expenses in his tax return, these must be reduced by the home office flat rate paid by the employer or set as business expenses. See firm websites below for more information. Extension of Short Time Work Program The National Council has decided to extend the COVID-19 short-time working regulations in its fourth phase for the period from April 1 to June 30, 2021. In terms of content, the rules of phase 3 were adopted with almost no changes:
- The net replacement rate remains at 80% to 90%.
- The working hours can normally be reduced by up to 30%.
- In industries that are affected by official closings, it is also possible that the working hours fall below this minimum.
Confirmation of the economic justification by a tax advisor is still necessary, but this does not apply if the company is directly affected by company closings or if short-time work is only applied for during the lockdown. This “lockdown period” has been provisionally extended to March 9, 2021 in the AMS guideline. It should be noted that for short-time working applications that begin between March 1 and March 9, 2021, the application deadline ends on March 31, 2021 (end of phase 3). Short-time working applications can also be submitted until March 20, 2021, starting between February 1 and February 28, 2021. The AMS guideline for phase 3 was changed at short notice retrospectively with regard to the further training obligation of apprentices - this no longer applies. This means that there is no longer any obligation to state the specific training courses that have taken place in the implementation report. The regulation that the commuter lump sum can still be taken into account tax-free despite corona-related teleworking, quarantine or short-time work has been extended to June 30, 2021.
COVID 19 Installment Payments for Tax Debts at the Tax Office and Premium Arrears at the OGK Deferred charges to the tax office and deferred contributions to the Austrian Health Insurance Fund (ÖGK) due to the COVID-19 pandemic can be gradually reduced through installment payment models from June 30, 2021. To make it easier for companies to enter the repayment phase, a “safety car phase” was established. In the first three months (July to September 2021), the “safety car phase” enables minimum installment payments of 0.5% - 1% of the outstanding taxes / contributions. Applications for payment in installments can be submitted between June 10, 2021 and June 30, 2021 at the latest. 1 Tax owed to the tax office The COVID-19 installment payment model for taxes is divided into two phases with a maximum duration of 36 months. Phase 1: A maximum of 15 months between July 1, 2021 and September 30, 2022 Phase 2: No more than an additional 21 months between October 1, 2022 and June 30, 2024 Companies can decide individually whether to pay the outstanding charges in total in phase 1 or to distribute them over both phases. If the period of phase 2 is also used, at least 40% of the arrears must be paid to the tax office in phase 1. In addition to the installment payment model, a “ safety car phase ” was implemented. This should enable a smoother start to the repayment of the outstanding tax debts and prevent a liquidity bottleneck at the beginning of the installment payment. The “safety car phase” can be requested for the first three months of the installment payment model (July to September 2021). In this case, only at least 1% of the total tax arrears as of June 30, 2021 must be paid in each of the three months (in the case of liquidity problems, the percentage is 0.5%). 2 Arrears of contributions at the ÖGK Phase 1 for installment payments is now also starting for premium arrears at the ÖGK. Arrears from the contribution periods February 2020 to May 2021 must generally be paid by June 30, 2021 at the latest . The ÖGK is already sending the relevant payment information. If it is not possible to settle the premium arrears by June 30, 2021, installment agreements can be made, in phase 1 - as in the case of tax debts - until September 30, 2022 at the latest . In the sense of the above-mentioned “safety car phase” , a reduction in installment payments is also possible with the ÖGK in the first few months. It should be noted that installment payments are only granted if the social security contributions included in the short-time work allowance are transferred to the ÖGK by the 15th of the calendar month following the payment. This also applies to reimbursements for exempted “risk patients” and in the context of segregation under the Epidemic Act 1950. From the contribution period June 2021, the conventional due dates and payment deadlines will apply again. The current contributions are - as usual - to be paid by the 15th of the following month.
Government Loan and Support Programs
Investment Bonus 1 Who is funded? Companies within the meaning of the Austrian Commercial Code (UGB) are eligible for funding, regardless of size and industry, which have a registered office and / or a permanent establishment in Austria. Exceptions are in particular
- Companies against which insolvency proceedings are pending at the time of filing the application or which meet the statutory insolvency requirements and
- Companies that are managed as a "state unit" according to the ESA 2010, unless they are in competition with other companies active in the market and do not perform any sovereign tasks.
2 What is funded? Eligible are new investments in the depreciable assets of Austrian establishments of the undertaking, which had not yet been activated. Even second-hand goods are covered by the term new investments, provided it is for the investing company to a new acquisition (acquisition within a group are not eligible). 3 For how long can the investment premium be used? The investments must have started between August 1, 2020 and February 28, 2021. The following measures apply as a start :
- the start of services,
- Down payments,
- Conclusion of a sales contract or
- the start of construction of the eligible investments. Planning services, obtaining official approvals and financing discussions do not represent the start of an investment.
Payment and commissioning must take place by 28 February 2022. For larger investments (investment volume over EUR 20 million excluding VAT), the period is extended until not later than February 28, 2024. An extension is explicitly excluded. 4 How much is the investment premium? The amount of the grant is basically 7% of the eligible investments. Investments in the areas of greening, digitization and health are particularly worthy of funding with a premium of 14% . The EUR 1 billion funds has been increased to EUR 2 billion and according to information from the Federal Ministry for Digitization and Business Location it will be increased if necessary through a change in the law. Applications that are submitted between September 1, 2020 and February 28, 2021 must be used as a general measure due to the state aid structure.
Update On the basis of a Council of Ministers resolution of January 20, 2021, a relief for the investment premium in connection with the so-called "first measure" is in preparation. The deadline for the first measure (order, deposit, etc.) , which marks the beginning of the investment, is to be extended from February 28, 2021 at the latest to May 31, 2021 . Caution - the deadline for the introduction of the on-trä-ge on investment premium but apparently not extended and will expire on the current level of information, unchanged early as February 28, 2021 . In this context, we would like to point out that a first degree-nah-me at a total project that consists of several investments, for each in-ves-ti-ti-on must be set. If, for example, the redesign of a meeting room is planned and the furniture (= first measure) is ordered in February 2021, but the video conference system is not to be ordered until August 2021, then only the furniture would be eligible; the first measure would have been too late for the video conference system
Further Extension of the Deadline Announced Mrs BM Schramböck has announced that the In-ves-ti-ti-ons by-füh-insurance-time-space (the deadline for commissioning and payment of funded investments) by one year ver-County-siege to be. With an investment volume of less than EUR 20 million by February 28, 2023 at the latest, with an investment volume of more than EUR 20 million by February 28, 2025 at the latest. A three-month extension of the deadline for initial measures to May 31, 2021 was announced just two weeks ago. The specified deadline extensions must first be legally implemented in order to be legally effective, which we believe can be expected in the next few weeks. The deadline for the award application remains unchanged and ends on February 28, 2021. Fixed Cost Subsidy Phase 1 1 Which companies are eligible? Companies must meet the following cumulative requirements in order to be able to apply for a fixed cost grant:
- The company has its seat or a permanent establishment in Austria ;
- It exerts a substantial operational activity in Austria from which to business income leads; ie companies that manage assets (eg pure leasing, investment management) are not eligible;
- The company was affected 10 Corporation Tax Act in the last three assessed years not from the deduction prohibition of § 12 para 1 ( ie no aggressive tax planning ) and the company has been in the last five years no final financial penalty (except financial misdemeanor) or corporate fine imposed in respect of intent ;
- The company suffers a loss of revenue from the spread of COVID-19;
- On December 31, 2019, it was not in difficulties as defined by the EU (General Block Exemption Regulation );
- and the company has reasonable measures to reduce fixed costs set (loss mitigation in an ex ante approach). Excluded from eligibility are in contrast:
- Companies that for 31/12/2019 more than 250 people (FTE) and had in the period more than 3% terminated employees have to take place short-time work (in justified cases, at the request of the exception are);
- Non-profit organizations as defined in §§ 34 ff BAO and the downstream companies (for this a dedicated support funds will be prepared), and companies that payments from the non-profit organizations support funds have moved;
- institutions that are solely owned by local authorities and corporations , as well as institutions that are predominantly owned by local authorities and other public law institutions that have a degree of self-coverage of less than 75%;
- Legal entities in the financial sector (banks, insurance companies, investment firms, etc.)
2 How much is the fixed cost grant? The level of fixed costs subsidy is staggered and depends on the amount of revenue loss of the company. The following graduation is provided for the reimbursement of fixed costs:
- In the event of a 40% - 60% loss of sales: reimbursement of 25% of the fixed costs
- in the event of a 60% - 80% loss of sales: reimbursement of 50% of fixed costs
- 80% - 100% loss of sales: 75% of the fixed costs are reimbursed The fixed cost subsidy is only granted if it amounts to at least EUR 2,000.00 in total. He is limited with
- EUR 90 million with a grant of 75%,
- EUR 60 million with a grant of 50%,
- EUR 30 million with a grant of 25%.
It is important to note that the maximum amount is only due once for all applicant companies in a group. The maximum amount depends on the group company that has the highest loss of sales. Other grants (eg hardness case funds compensation after the epidemic Act) be offset, as well as insurance benefits . Payments in connection with short-time work are not to be deducted. 3 Which (fixed) costs are eligible? The eligible costs include all expenses from an operational domestic activity. Be replaced:
- Premises Rent ,
- Insurance premiums ,
- Interest expenses (but not if credits or loans are passed on to affiliated companies),
- Financing costs Share of lease payments,
- License fees if the receiving corporation does not belong to the group or is under the controlling influence of the same shareholder,
- Electricity, gas, telecommunications expenses,
- Loss of value for perishable / seasonal goods that have lost at least 50% of their value (AK / HK) due to the COVID-19 crisis,
- Personnel costs, which for the processing of crisis-related cancellations and transfers occur,
- reasonable entrepreneurial wages for natural persons as sole proprietorships or co-entrepreneurs (minimum EUR 666.66 and maximum EUR 2,666.67 per month), additional income must be deducted,
- Expenses for other contractual mission-critical payment obligations which do not affect the staff.
Not be promoted thus particularly investments, repayments of loans and loans as well as personnel costs (if not for the processing of cancellations and transfers). 4 How is the loss of sales determined? The calculation of the loss of sales is based on the revenue from goods and services in accordance with the income or corporation tax assessment. Changes in inventory are not to be taken into account. The company can either use the 2nd quarter of 2020 as the observation period, or select one to a maximum of three contiguous individual observation periods for which it applies for the fixed cost subsidy. The individual observation periods are specified as follows:
- 16.3. until 15.4.
- 16.4. until 15.5.
- 16.5. until 15.6.
- 16.6. until July 15
- 16.7. until August 15
- 16.8. until 15.9.
The selected observation period is decisive for the loss of sales as well as for the fixed costs. The loss of sales results from the comparison of the selected observation period with the respective identical period of the previous year. If the second quarter is selected as the observation period for the loss of sales, then the period from 16.3. until 15.6. to use. In cash-machines, revenues and fixed costs can be captured by the inflow-outflow principle, provided this does not lead to arbitrary time shifts. In the case of start-ups, the loss of sales can be determined using a planning calculation. 5 What obligations does the applicant have to meet? With the application, the applying company enters into extensive obligations, in particular:
- In 2020, no bonus payments to board members and managing directors in the amount of more than 50% of their bonus payments for the previous financial year are paid,
- reasonable measures to put in order to generate revenue and to maintain jobs (eg by short-time work)
- Withdrawals or distributions of profits to adapt to the economic conditions (the decision of dividends and payouts is from 16.03.2020 to 03.16.2021 prohibited ; or three months after the last disbursement of the grant has a moderate dividend policy to be carried out)
- within the scope of the legal possibilities, not to pay any inappropriate remuneration to company owners, organs, employees, etc.,
- not to release any reserves to increase the balance sheet profit,
- not to use the fixed cost subsidy to pay dividends, to buy back own shares or to pay bonuses to board members or managing directors. The fixed cost subsidy may not be used to indirectly finance repayments of existing financial liabilities (especially early repayment or maturity) or investments.
COFAG, the BMF and their authorized representatives are entitled to review and inspect records and documents at any time. It is to be expected that the grant requirements will be checked, in particular by the tax office, in the context of external audits and inspections. 6 How do I apply for and pay out the fixed cost subsidy? The settlement of the grant will be fixed costs in up to three installments . The best possible estimated values can be used to pay out the first and second tranches if no qualified accounting data is yet available. If qualified data is already available when applying for the second tranche, the entire (remaining) fixed cost allowance can be applied for with the second tranche. The applications must be submitted via FinanzOnline. The amount of lost revenue and the fixed costs must by an accountant or auditor (also limited accountants) are confirmed. They can also submit the applications for the company via FinanzOnline. A confirmation is not required for the first tranche if the grant does not exceed EUR 12,000.00. A confirmation of plausibility is sufficient for the first tranche up to a grant of EUR 90,000.00. The financial administration carries out a risk analysis of the applications in relation to the application requirements. The applications are approved by the COFAG. There is no legal entitlement to the grant. Applications can be submitted by August 31, 2021 at the latest. The total budget for the grants is EUR 8 billion. 7 Tax treatment The fixed cost allowance is tax-free , but shortens the tax-deductible expenses. Fixed Cost Subsidy Phase 2 In order to maintain solvency and to bridge liquidity problems of companies in connection with the spread of COVID-19, an increase of fundings up to EUR 12 billion (previously EUR 8 billion) and an extension for another 6 months for the fixed cost grant was announced. However, these changes have not yet been incorporated into the funding guidelines (as of October 30, 2020), as negotiation with EU commission is still in progress. With operations managed by the COFAG funding measure that brings Phase 2 among others – according to the draft guidelines – an extension for another 6 months (last observation period is now 16 February 2021 to 15 March 2021), an extension of the eligible costs (including to frustrated expenditures, depreciation and amortization) and the ability to 100% of the fixed costs get replaced. What is new is that the fixed cost subsidy can be applied for as soon as sales decrease by 30% (previously 40%). The fixed cost subsidy is limited to a maximum of EUR 5 million per company in phase 2 . Companies with a turnover of less than EUR 100,000.00 can also apply for a flat-rate grant of 30% of turnover. Applications can be submitted no later than August 31, 2021. Every application must be confirmed or submitted by a tax advisor, auditor or accountant (exceptions exist only for the first Tranche for grants up to EUR 12,000.00 and flat-rate grants). Hardship Fund The measures against the spread of the coronavirus hit many small and one-person entrepreneurs (EPU) particularly hard economically. The hardship fund was set up to ensure the liquidity of these entrepreneurs despite the loss of orders and lost sales. It was recently announced that the term of the hardship fund would be extended until March 2021. At the same time, the number of observation periods for which support can be requested from the hardship fund is to be increased from six to twelve months. Tthese changes have been incorporated into the underlying funding guidelines on October 16, 2020. We have summarized the key points of the relevant funding guidelines for you below. When is it funded? Funding with ongoing support services from the hardship fund assumes a significant economic threat from the effects of the spread of the coronavirus. Such is the case if
- the running costs can no longer be covered,
- the business of the entrepreneur is at least predominantly affected by an officially ordered entry ban during the period under review, or
- sales have slumped by at least 50% compared to the respective period of the previous year. Who is funded? Ongoing support payments from the hardship fund can be provided by
- One-person entrepreneurs,
- New self-employed (e.g. trainers, artists),
- Independent employees,
- Members of the liberal professions (e.g. doctors),
- Micro-entrepreneurs who employ fewer than ten full-time equivalents and whose annual turnover and total assets do not exceed two million euros, and
- Employed partners who are compulsorily insured under the GSVG or FSVG or insured in the insurance of the relevant institutions of the liberal professions, be requested.
The extensive catalog of personal and factual eligibility requirements is regulated in detail in the funding guidelines of the Federal Ministry of Finance (BMF) and can be accessed on a daily basis at the Internet address https://www.wko.at/service/haertefall-fonds-foerderordnung-phase2.html . How and to what extent is funding available? The ongoing support payments from the hardship fund ("Phase 2") are granted and amount to a non-repayable cash grant:
- 80% of the lost net income from self-employed work or business operations when setting up a company or taking over a business by December 31, 2019
- 90% of the lost net income from self-employed work or business operations when setting up a company or taking over a business by December 31, 2019 and an average monthly net income from entrepreneurial activity of less than € 966.65 in the comparison year, provided that no additional income (e.g. from an employment) is generated ,
- Flat rate € 500.00 if there is no income tax assessment and the company was founded or taken over between 1.1.2018 and 15.3.2020, but at least € 500.00 and a maximum of € 2,000.00 per month for up to twelve (previously six) months.
If the total of the remaining monthly net income including any additional income (e.g. from employment), the benefits received from private or professional insurance to cover the economic effects of the spread of the coronavirus and the requested grant from the hardship fund is at least € 2,000.00, the funding amount is reduced by the amount in excess of € 2,000.00. If this crediting reduces the funding amount below the minimum amount, it will be rounded up to € 500.00. On the other hand, no funding is available if the net income from the additional income and the insurance benefits to be taken into account add up to at least € 2,000.00 in a given period. Immediate aid already received from the hardship fund ("Phase 1") and grants from the artists' social insurance fund are offset against the ongoing support benefits up to a minimum grant of € 500.00. The actual amount of the ongoing support payment is calculated on the basis of the lost net income during one-month observation periods, which start on the 16th of each month and end on the 15th of the following month. The first possible observation period runs from March 16, 2020 to April 15, 2020, the last possible observation period from February 16, 2021 to March 15, 2021 (previously November 16, 2020 to December 15, 2020). The ongoing support services can be requested for any twelve (previously six) observation periods that do not have to be consecutive. Come back bonus If there is an entitlement to ongoing support services from the hardship fund, a “come back bonus” of € 500.00 will be paid out monthly in addition to the funding amount. Bridge Loans The Corona Relief Fund serves to maintain solvency and to bridge liquidity problems of companies (large companies and SMEs) in connection with the spread of COVID-19 and the economic effects caused by it. The funding measures include loan financing and guarantees, as well as non-repayable grants. In a first step, the guidelines that have now been in force since April 9, 2020 regulate the framework for guarantees and direct loans What is funded? The financial measures from the Corona Relief Fund are intended to enable companies to meet unsecured payment obligations that cannot be borne independently by the company due to loss of sales caused by the COVID-19 crisis. In particular, the guaranteed financing will be used for the following payment obligations:
- Leasing fees
- Individual loan installments and interest payments on the existing contractual maturities (but not in the case of prepayment / maturity or bullet loans and not for debt rescheduling)
- Wages and salaries including ancillary wage costs
- Adequate entrepreneur wages
- Taxes, duties and fees
- Fees for business-necessary services and payments for goods to maintain business operations (required minimum)
- Repayment of down payments
- Insurance premiums (for business-necessary insurance
What is the maximum credit? The guarantee or direct loan goes up to EUR 120 million (the republic's liability is 90% of the loan amount, for SMEs 100% up to EUR 500,000.00), however, at most:
- 25% of the company's total sales in 2019, or
- double the company's annual wages, or
- the proven liquidity requirements for the next 12 months after the loan was granted
Exceeding the amount of EUR 120 million is justified, but requires a separate review and approval of the full Supervisory Board of COFAG. In a first step, the observation period for determining the unsecured payment obligations extends from 1.3.2020 to 30.9.2020, although a longer period is possible if special circumstances of the company require it (e.g. seasonality of a business model). The exact observation period must be specified in the application and a current financial plan must be enclosed with the application. What are the applicant’s obligations? If a guarantee is granted from the Corona Relief Fund, the applicant must take a number of measures (and also confirm these) and observe restrictions:
- Non-repayable grants or other payments from public authorities or third parties to cover the payment obligations specified in the application are to return the guarantees or loans from the assistance fund to be used (this will be also required a return planning).
- In addition, other public-sector measures should also be taken advantage of (e.g. tax deferrals and short-time work) in order to keep running costs (liquidity requirements) as low as possible.
- Only reasonable remuneration is to be paid to the owners and employees . This particularly applies to bonuses for board members or managing directors, which may amount to a maximum of 50% of the bonuses of the previous year.
- In addition, there is a ban on dividends and profit distribution from March 16, 2020 to March 16, 2021 (applies to all legal forms) and a moderate dividend and profit distribution policy is required for the remaining loan term. No reserves may be released to increase the balance sheet profit and the liquidity gained from the guaranteed financing may not be used for profit distributions, the repurchase of own shares or the payment of bonuses to board members or managing directors.
- Before granting a financial measure, the applicant must also ascertain as best as possible whether and to what extent payment obligations for which a financial measure is requested can be reduced or avoided by taking appropriate measures (e.g. reducing the purchase of goods to a required minimum, drawing on liquidity reserves, generating proceeds Assets that can be used quickly and without disproportionate loss, utilization of working capital credit lines and financial measures by the beneficial owner / shareholder; the question remains whether and to what extent there is an obligation of the group parent company to cover the subsidiary's liquidity needs, e.g. through loans for grants ).
- In addition, the applicant is obliged to inform COFAG in writing of all circumstances that were not present at the time of the application and which significantly affect the risk of COFAG in connection with the bridging guarantee ( e.g. risk of non-repayment of the financing). At what point in time such a “significant risk” exists is still open.
How do I get the guarantee? The first point of contact for the entrepreneur is the (house) bank. Depending on the company, the loan application must be forwarded to the Österreichische Kontrollbank (GU), the aws (SME) or the ÖHT (tourism company). Through these three funding agencies, COFAG issues a loan guarantee for the loan to be granted by the bank to the company (90% of the loan amount, 100% up to EUR 500,000.00 for SMEs). In particular, the following information is required in the application form and must be supported by appropriate documents:
- General information and documents about the applicant and the company (e.g. company key figures, company structure, company object, results and financial plannin , etc.
- Description of the economic effects that can be traced back to the COVID-19 crisis, in particular a plausible presentation of the liquidity requirement and the unsecured payment obligations (including the observation period)
- Indication of measures to reduce the determined liquidity requirement (e.g. support from the public sector)
- Total amount of the financing to be guaranteed, taking into account the statutory maximums
- Presentation of the traceability of the guaranteed financing when due, including expected surpluses of a normal year after the effects of the COVID-19 crisis no longer exist (repatriation plan)
- In addition, corresponding guarantee fees (based on the part of the guaranteed financing covered by the guarantee) must be paid. With regard to the interest rate and the guarantee fee, we refer to our mailing from April 6th, 2020.
- Finally, the applicant must confirm the following requirements: Relation to Austria of the company (seat, permanent establishment, operational activity in Austria), Guaranteed Funding Traceability, Compliance with restrictions and obligations, Company is not in trouble, Which COVID-19 financing measures were used by affiliated companies (according to UGB)
Update The change to the Temporary Aid Framework currently only affects the bridging guarantees in Austria. The Federal Ministry for Digitization and Business Location (BMDW) announced on July 1, 2020 that it would adjust the guidelines for the 100% bridging guarantees so that small and micro-enterprises can make use of these guarantees even if they exceed have used up half of the share capital. It is currently not known whether the application requirements for the fixed cost subsidy and the subsidies from the startup aid fund will be relaxed.
Promotion of New Real Estate Investments COVID-19 investment bonus: This currently promotes new investments in non-repayable assets by granting non-repayable grants. The grant amounts to 7% of the acquisition costs of the eligible investments. An increased investment premium of 14% applies to investments in the areas of greening, digitization and health. The maximum eligible investment volume of a company or a group is EUR 50 million. Loss Compensation The guidelines on loss compensation were published on December 16, 2020 (Federal Law Gazette II No. 568/2020). This is the model of the EU Commission, which was originally referred to as the “fixed cost subsidy II 3 million”. compensation of losses Replaces be incurred losses ( "uncovered fixed costs") in the period from 16 September 2020 to 30 June 2021 . Received from the loss small and micro enterprises a replacement amounting to 90%, all other companies a replacement amounting to 70% , but a maximum of EUR 3 million Request and payment The loss replacement is in two tranches handled and paid out:
- Tranche 1 can be applied for from now until June 30, 2021 and comprises 70% of the expected loss compensation.
- Tranche 2 can be requested from July 1, 2021 to December 31, 2021. In the course of the second tranche, the final billing takes place, in which corrections can be made and observation periods can also be changed.
Lockdown sales replacement December (3rd VO lockdown sales replacement) Due to the extension of the lockdown after December 6, 2020, the lockdown sales replacement was extended, with a subsidy now for the period December 7, 2020 to December 31, 2020(for cable cars and rack railways, animal parks, zoos and botanical gardens only until December 23, 2020). As with the lockdown sales replacement in November, companies directly affected by the lockdown (e.g. restaurants, hotels, indoor sports facilities, etc.) in an industry directly affected by the restrictions (according to ÖNACE classification) are eligible. The further closures currently prescribed with the 2nd COVID-19-NotMV have not yet been taken into account in the lockdown revenue replacement. The amount of the December sales replacement is 50% of sales in December 2019 (minimum EUR 2,300.00, maximum EUR 800,000.00). The calculation is carried out by the tax authorities, with a daily aliquoting according to the duration of the official restrictions as well as an adjustment for sales shares from sectors not directly affected. The application is until 15 January 2021 possible and can be done by the entrepreneur himself or by the tax consultant / auditor. Has already applied for a lockdown revenue replacement for the period prior to December 7, 2020, one is re-application is necessary. The December lockdown sales replacement falls below the maximum limit of EUR 800,000.00 of the temporary aid framework. This cap applies in total to the following grants:
- December Lockdown Revenue Replacement,
- Lockdown Revenue Replacement November,
- Fixed cost subsidy EUR 800,000.00,
- 100% guarantee,
- NPO grant for economic, competitive areas
It should be noted that the use of the lockdown sales compensation can have an impact on the fixed cost subsidy of EUR 800,000.00 as well as the loss compensation. Therefore, the lockdown revenue replacement should be applied for before these two grants
Update – February 16, 2021 The Federal Ministry of Finance has published the following, long-announced COVID-19 grant instruments:
- Lockdown revenue replacement II for companies indirectly affected by the lockdown (November-December)
- Cancellation bonus
See firm links below for additional information on these grants. UPDATE FIXED COSTS SUBSIDY PHASE I The funding guidelines for the fixed cost grant I (for observation periods from March 16 to September 15, 2020) have been changed with regard to companies in difficulty (UiS). The simplifications envisaged by the EU Commission have been implemented and, in this respect, have been brought into line with the other funding guidelines. In concrete terms this means: The UiS criteria are now only fully applicable to medium and large companies. When assessing whether a company is in difficulty as of December 31, 2019, measures to strengthen equity (e.g. shareholder subsidies) can be taken into account up to the time of the application. In the case of small and micro enterprises, on the other hand, the UiS criteria are only relevant to whether bankruptcy proceedings were pending as of December 31, 2019. As before, no insolvency proceedings (with the exception of restructuring proceedings within the meaning of Sections 166 ff IO) may be pending at the time of filing the application. On the other hand, an application for the fixed cost subsidy I is no longer excluded if the requirements for opening insolvency proceedings are met at the request of the creditors (without insolvency proceedings actually being opened). UPDATE FIXED COSTS SUBSIDY 800,000 The funding guidelines for the fixed cost subsidy 800,000 have also been changed as follows: The maximum amount was - an extension of the EU state aid framework following - by EUR 800,000.00 to EUR 1.8 million at-ge-ho-ben . The application options have been expanded for newly founded companies . Companies that were founded between September 16 and October 31, 2020 are now eligible for limited funding. Furthermore, companies that have taken over a (partial) company as a legal successor can now also be eligible under certain conditions. Furthermore, regulations for the combination of sales replacement II and cancellation bonus with the fixed cost subsidy of 800,000 have been included. UPDATE LOSSES The funding guidelines for loss compensation have also been changed in the following points: The maximum amount was - an extension of the EU state aid framework following - from EUR 3 million to EUR 10 million at-ge-ho-ben . The application options have been expanded for newly founded companies . Companies that were founded between September 16 and October 31, 2020 are now eligible for limited funding. Furthermore, companies that have taken over a (partial) company as a legal successor can now also be eligible under certain conditions. In addition, regulations on the combination of sales compensation II and loss bonus with loss compensation have been included.
On Friday, February 26, 2021, the details of the extension of the NPO support fund for the 4th quarter of 2020, which had already been announced in autumn, as well as the so-called lockdown grant for certain non-profit organizations, were published at https://npo-fonds.at/
- For organizations that, according to the regulation giver's definition, were neither directly (officially closed) nor indirectly (customers officially closed) affected by the lockdown, nothing changes and they can apply for the grant as usual. This applies, for example, to churches and voluntary fire brigades.
- For -profit Ver-ei-ne (not for other entities) who, because of the lockdown were officially closed or indirectly affected, the calculation basis changes . In addition to the general grant, a so-called lockdown grant is paid out for the period of lockdown. This applies to clubs in certain sectors, such as museums and sports clubs. Amendment to the General Social Insurance Act, In the case of contribution deferrals, a distinction must be made as follows on the basis of the contribution periods concerned:
- February to April 2020: For outstanding contribution deferrals, an official extension of the deferral until June 30, 2021 (previously March 31, 2021) is planned (Section 733 (7) ASVG).
- May to December 2020: Contributions for which there are real installments or deferrals are to be paid by June 30, 2021 (previously March 31, 2021), contrary to the previous agreements (§ 733 Paragraph 8a ASVG).
- January to May 2021: Contributions can be deferred by the ÖGK on request until June 30, 2021 if a corona-related liquidity bottleneck is made credible. Please see member sites below for more information.
Links to Our Member Firms
Further Covid-19 advice
The information contained herein on Covid-19 government measures within the G8, consists solely of information that can be found on the websites of one or more Praxity Participant firms, and has not been written, modified or verified by Praxity, it’s staff, officers or directors.