COVID-19 Fixed Costs Subsidy II of up to EUR 800,000
On 23 November 2020, the Guidelines on the Fixed Costs Subsidy II of up to EUR 800,000 were published in the Austrian Federal Law Gazette. In the following entry, we provide information on the key points:
General prerequisites for application
Companies which have their legal seat or permanent establishment (PE) in Austria, and which carry out operational activities in Austria, which lead to (business) income in accordance with Sections 21, 22, or 23 Austrian Income Tax Act (EStG).
If companies are currently involved in insolvency proceedings, then they are excluded before application due to the lack of operational activities, except in the event that reorganisation proceedings have been opened. In addition, the prerequisites of the general application requirements under Point 3.1 of the Guidelines must be fulfilled and the company must not be excluded under Point 3.2 of the Guidelines.
In addition, the company must have a revenue shortfall of at least 30% (for the fixed costs subsidy I, by contrast, a loss of revenue of at least 40% is required), as well as actual fixed costs. The fixed costs must have been incurred between 16 September 2020 and 30 June 2021 at the latest.
Extension/adjustment of the definitions of the fixed costs
- Depreciation for wear
- Fictive depreciations for moveable assets
- Frustrated expenses
- Leasing rates can be recognised in full, unless the company acquires economic ownership of the lease object
- Director’s remuneration payments of shareholder-managing directors of corporations can be recognised if the individual in question is not insured in accordance with the Austrian General Social Insurance Act (ASVG).
Amount of the COVID-19 Fixed Costs Subsidy II of up to EUR 800,000
The percentage fixed costs subsidy corresponds to the percentage shortfall in revenues, e.g. in the event of a revenue shortfall of 60%, the fixed costs will also be compensated at 60%
The max. amount of the subsidy per company is EUR 800,000.
Companies which generated revenues of less then EUR 120,000 at the time of application in the last assessed year at the time of application, and which represent the main source of income of the business owner, are permitted to calculate the fixed costs subsidy at a fixed rate. In this case, the subsidy amount should be set at 30% of the revenue shortfall.
Calculation of the revenue shortfall
When calculating the amount of the revenue shortfall, reference should be made to the revenues from the relevant goods and/or services which are included in the income tax return or the corporate income tax return. Whether these revenues from goods and/or services are taxable for VAT purposes, or subject to VAT, is irrelevant for calculation purposes.
Services that have not yet been invoiced must be taken into account in the calculation if they have to be capitalised in the company balance sheet.
When calculating the revenue shortfall, max. 10 assessment periods may be selected between 16 September 2020 and 30 June 2021. The assessment periods must be selected in such a way that either all the assessment periods are consecutive, or there are two blocks of consecutive assessment periods. A gap is permitted between the two blocks of assessment periods.
When applying for the first tranche, the revenue shortfall and the fixed costs must be estimated as accurately as possible. When determining the amount of the revenue shortfall, the predicted or realised revenues in the assessment periods in 2020 and/or 2021 must be compared with the corresponding comparison periods in 2019.
When selecting the assessment periods, any claim for compensation for lost revenue due to the lockdown must be taken into account. For further information on lockdown and compensation for lost revenues see this entry.
Applications for the grant of a fixed costs subsidy may only be submitted via FinanzOnline. COFAG will decide whether they will be granted.
The amount of the revenue shortfalls and the fixed costs must be confirmed and submitted by a tax advisor, auditor or accountant.
The subsidy can be applied for in 2 tranches.
- The tranche covers 80% of the preliminary fixed costs subsidy and can be applied for between 23 November 2020 and 30 June 2021.
- The tranche can be applied for between 1 July 2021 and 31 December 2021. With this tranche, the remainder of the fixed costs subsidy will be paid.
For applications for a subsidy of up to EUR 36,000 as part of the first tranche, the application does not have to be submitted by a tax advisor, auditor, or accountant.
For applications for a subsidy between EUR 36,000 and EUR 100,000 as part of the first tranche, the confirmation by a tax advisor, auditor or accountant can be limited to a plausibility check.
If the payment is made in two tranches, any amendments of the details must be carried out at the latest with the second tranche. When applying for the second tranche, the selected assessment periods can also be changed.
When submitting the application, the company must agree to the following:
- To fulfil the general prerequisites for application
- The revenue shortfalls are due to COVID-19 and the obligation to minimise damages has been fulfilled
- The fixed costs in the application do not include expenses for repayment of financial liabilities (excluding individual interest payments on the contractually agreed due dates that applied on the date of entry into force of the Austrian COVID-19 Act, but not excluding early repayment or immediate repayment) or for investments which are indirectly financed via the fixed costs subsidy;
- The fixed costs are not covered multiple times by insurance or other support from the government in relation to the economic consequences of the COVID-19 outbreak;
- No inappropriate remuneration or remuneration components were paid, or other payments made, in particular, no bonus payments to the board of directors or managing directors were made in the year 2020, which exceeded more than 50% of their bonus payments for the previous fiscal year;
- it is acknowledged that the grant of the fixed costs subsidy will be recorded in the transparency database.
The applicant must also agree to the following:
- To pay special attention to maintaining the employment level in the company, and to take all reasonable measures to generate revenues and preserve jobs (e.g. using short-time working);
- The owner’s draw or dividends paid to owners in the period March 2020 to 31 December 2021 must be adjusted to the economic circumstances. In particular, the grant of a fixed costs subsidy in the period between 16 March 2020 and 16 March 2021 will be prevented by (i) the distribution of dividends or other legally non-mandatory profit distributions and (ii) the repurchase of own shares. Subsequently, an appropriate dividend and profit distribution policy must be put in place for the period until 31 December 2021.
According to the information available to use, an additional, more complex model of a fixed costs subsidy II of up to EUR 3m is currently in development and should be introduced at the beginning of December.
Further information on the fixed costs subsidy II of up to EUR 800,000 can be found via the following link:https://www.bmf.gv.at/public/informationen/fixkostenzuschuss.html%23Fixkostenzuschuss800000
Authors: Daniela Stastny, Alexandra Velic