New investment premium as an incentive for companies
As announced by the Austrian government, the COVID-19 investment premium is intended to incentivise business investments and counteract the current reluctance of Austrian companies to invest. The Austrian Investment Premium Act (InvPrG) entered into force on 24 July 2020 and contains the following main points:
- The premium will be provided for new investments (that must be capitalised) in fixed tangible and intangible assets subject to depreciation/amortization in relation to companies at Austrian locations, and for which the subsidy can be applied between 1 September 2020 and 28 February 2021.
- First measures in connection with the investment have to be set between 1 August 2020 and 28 February 2021.
- Generally speaking, the investment premium is calculated as 7% of the new investment. For new investments in the areas of digitalisation, greening and health and life sciences, the investment premium will be doubled from 7% to 14%.
- The premium will be paid in the form of a subsidy.
- Legal stipulation that subsidies under the Investment Premium Act do not constitute taxable operating income and that there is no reduction in expenses
- All existing and newly established companies of all industries and sizes are eligible to apply for the premium.
- The following investments are excluded from the premium:
- Investments with a negative impact on the environment: Investments in the construction or expansion of fixed assets for the promotion, transportation or storage of non-renewable energy sources, as well as the construction of fixed assets that make direct use of non-renewable energy sources, unless the investment is aimed at substantially reducing greenhouse gas emissions
- Undeveloped sites
- Financial assets
- Acquisitions of companies
- Capitalised internal expenditure.
- The total amount of funding allocated for the investment premium is EUR 1bn.
- The scheme will be run by the promotional bank of the Austrian government (AWS).
- Further details are expected to be provided in the form of funding guidelines.
Authors: Daniela Stastny, Cornelia Kalina, Alexandra Velic