From 2021, COVID-19 subsidies are contingent on appropriate tax conduct

The entry into force from 1 January 2021 of the Federal Act linking subsidies from the Austrian Federal Government due to the COVID-19 pandemic to appropriate conduct in relation to tax (“WohlverhaltenG”) sees the Austrian government breaking new ground in the field of COVID-19 subsidies.

Future COVID-19 subsidies will not only be contingent on the requirements for individual subsidies, but also on appropriate conduct in relation to tax. Companies which are granted subsidies due to the COVID-19 pandemic will be required to have conducted themselves in an appropriate manner in relation to tax for five years prior to the application for the grant of the subsidy and up until the end of the period of subsidy (final accounts). If conduct in relation to tax is deemed not to be appropriate, subsidy applications will be rejected, or subsidies will have to be repaid subject to interest (4.5% above the base rate).

Appropriate conduct in relation to tax

• In the past three assessed years, no abuse may exist which affected the assessment base to the extent of EUR 100,000 or more.
• In the past five assessed years, no additions to the tax assessment base in accordance with Section 12 para 1 subpara 10 or Section 10a Austrian Corporate Income Tax Act (KStG) of a total amount of more than EUR 100,000 may exist, or if both these forms additions to the tax assessment base are disclosed in the tax return, they may not amount to a combined total of more than EUR 500,000.
• The company must not be resident in a non-cooperative jurisdiction named in the EU list and must not have predominantly generated passive income there after 1 January 2018.
• In the last five years, no legally binding penalty for tax crimes or corporate fines due to intentional actions of more than EUR 10,000 may have been received.

Practical tip

For subsidies based on legislation that entered into force after 31 December 2020, it is advisable to verify appropriate conduct in relation to tax in addition to the applicable funding criteria.

We would be happy to assist you in verifying the conditions for claiming a future COVID-19 subsidy.

Author: Lisa Hoflehner