Lockdown revenue compensation II for indirectly affected companies

To provide rapid support to the business sectors in Austria that have been indirectly affected by the lockdown, lockdown revenue compensation II has been introduced as an immediate grant. On 16 February, the corresponding Guidelines were published in the Austrian Federal Law Gazette. In the following entry (last updated 17 February 2021), we provide information on the key points:

General requirements

Beneficiaries are companies that cumulatively fulfil the prerequisites under the lockdown revenue compensation guidelines in the assessment period. These must have e.g. a legal seat or a PE in Austria, respectively operational activities that lead to taxation in Austria of revenues under Sections 22 or 23 Austrian Income Tax Act (EStG).

At the time of application, as defined under Section 3 of the Federal Act that makes Austrian state aid contingent on appropriate conduct in relation to tax (Wohlverhalten-G), a beneficiary company must conduct itself appropriately in relation to tax.

Not eligible to apply are, for example, companies for which insolvency proceedings are pending in the assessment period (except for reorganisation proceedings) or newly established companies, which have not generated any revenues prior to 1 December 2020.

Eligible companies must be indirectly and significantly affected by the restrictions imposed under the COVID-19 protective and emergency measures ordinances.

A company is indirectly and significantly affected if the following prerequisites are fulfilled:

• • The company generated at least 50% of its revenues or sales revenues indirectly or on behalf of a third party, and if:
    • • Such revenues were generated in November 2019 from companies which were directly affected by the restrictions in November 2020 without any change in activities in comparison with November 2019 or
      • Such revenues were generated in December 2019 from companies which were directly affected by the restrictions in December 2020 without any change in activities in comparison with December 2019 or
      • Such revenues were generated in the period defined under Point 4.5.1 of the Guidelines from companies which were directly affected by the restrictions imposed in November 2020, or were directly affected by the restrictions imposed in December 2020, without any change in activities in comparison with the above-mentioned period and

to be eligible, such indirect or third-party revenues must be attributable to sectors (beneficiaries) listed in Annex 2 of the Ordinance on Lockdown Revenue Compensation II.

• • The applicant company carried out activities in the periods November 2020 or December 2020 in one of the sectors listed in Annex 2 of the Ordinance on Lockdown Revenue Compensation II, in order to generate revenues indirectly or on behalf of a directly affected company (eligible revenues).

An applicant company generates eligible revenues on behalf of a third party from another company if the applicant company acts as a service provider toward the third party, as a result of which the applicant indirectly provides services to a directly affected company.

Furthermore, the company must have suffered a revenue shortfall of more than 40% in November 2020 or December 2020.

Assessment periods and calculation

The assessment period includes the days on which the applicant was indirectly and significantly affected by the COVID-19 protective and emergency measures ordinances and ends on 31 December 2020 at the latest.

Depending on the period in which the applicant company was indirectly affected, one or more of the following 5 assessment periods may be involved:

• • 1 November 2020 to 16 November 2020;
  • 17 November 2020 to 6 December 2020;
  • 7 December 2020 to 16 December 2020;
  • 17 December 2020 to 25 December 2020; alternatively, if the revenues were generated via cableways and cogwheel railways: 17 December 2020 to 23 December 2020;
  • 26 December 2020 to 31 December 2020.

The amount of lockdown revenue compensation II is calculated based on the revenues to be determined and the applicable percentage rate as defined in the Guidelines for the relevant sector category to which the eligible revenues can predominantly be attributed.

To determine the percentages listed in Annex 2 of the Ordinance on Lockdown Revenue Compensation II, a standardised model is used to calculate typical sector gross profits.

The amount to be determined is capped in two ways:

• • When added together, the total amount of lockdown revenue compensation II plus the pro-rata amount of short-time working support for the assessment period must not be higher than the pro-rata comparison revenues for the assessment period.
  • The amount of lockdown revenue compensation II must not be higher than the amount of the pro-rata revenue shortfall for the assessment period.

The maximum amount of lockdown revenue compensation II is capped at EUR 800,000 minus any subsidies received (especially FCS 800,000, 100% guarantees, as well as payments from Austrian federal states, municipalities, or regional economic and tourism funds). The minimum amount is EUR 1,500. If the revenues of the applicant consist solely (100%) of eligible revenues, and if the revenue shortfall is minimum 80%, the minimum amount of lockdown revenue compensation II is EUR 2,300.

Companies which on 31 December 2019 constituted “undertakings in difficulty” in accordance with the EU’s General Block Exemption Regulation (GBER), can only apply for lockdown revenue compensation II in accordance with the EU’s De-minimis Regulation up to a maximum amount of EUR 200,000. There are further exceptions for undertakings in difficulty, which constitute small or medium-sized enterprises (SMEs) within the SME definition of Annex 1 of the GBER.

Lockdown revenue compensation II may only be granted for periods in which the applicant does not claim the fixed costs subsidy 800,000 or compensation for losses.

Furthermore, the lockdown revenue compensation II may only be granted if the applicant does not claim a revenue shortfall bonus for either November or December 2020.

Application process

Lockdown revenue compensation II can be applied for between 16 February 2021 and 30 June 2021.

Applications can only be made via FinanzOnline. COFAG decides whether the applications will be granted.

The application for the grant of lockdown revenue compensation II must be submitted by a tax advisor, auditor, or accountant. The tax advisor, auditor, or accountant must also confirm the amount of the revenue shortfall and the plausibility of the eligible revenues as a proportion of total revenues in the relevant periods. This does not apply to:

• Applications as part of which the estimated amount of eligible revenues as a proportion of total revenues in November and/or December 2020 does not exceed the actual eligible revenues as a proportion of total revenues in the comparison period
• Applications concerning eligible revenues that are only generated indirectly and where no claim is made for eligible revenues generated on behalf of a third party
• Applications in which the anticipated amount of lockdown revenue compensation II does not exceed EUR 5,000.

Further information can be found on the following site: https://www.umsatzersatz.at/indirekt/