To help you keep track of the current exceptional situation, we have compiled the latest innovations for you here. There are changes in the legislation, especially in connection with bridging financing from the Corona crisis fund, direct payments as first aid measures for EPU, micro-entrepreneurs, new self-employed persons and freelancers as well as with regard to rent and lease payments. There is a clear signal of support to companies of all sizes and sectors (Status: 25.06.2020).
FIXED COST SUBSIDY
COVID-19 FUNDING NAVIGATOR
Emergency aid fund - direct payments
Direct payments as first aid measure - Hardship fund for EPU, micro-entrepreneurs, new self-employed, freelancers, NPO & private accommodation landlords
With direct subsidies from the hardship fund, the Austrian government has implemented another measure to cushion the economic effects of COVID-19. Since 27 March 2020, in the afternoon, applications for support for EPU and SMEs can be submitted online via the homepage of the WKO or Agrarmarkt Austria. The liquid funds for this purpose come from the COVID-19 crisis management fund and amount to a maximum of € 2 billion. However, the Federal Minister of Finance may adjust this amount by decree in agreement with the Vice-Chancellor. Applications will be possible until the end of 2020. The grants are not subject to social security contributions and do not have to be repaid.
Who will be supported?
- One-person companies
- SMEs with less than 10 full-time equivalent employees and a maximum of € 2 million turnover or balance sheet total
- freelancers such as artists, but also members of freelance chambers such as doctors, lawyers, civil engineers, etc.
- non-profit organizations that pursue charitable, benevolent or ecclesiastical purposes
What is a non-eligible applicant for funding under phase 2?
- enterprises with regard to income from agriculture and forestry
- Companies with regard to private room rentals with a maximum of 10 beds, which are not subject to the trade regulations
- Non-professional organisations according to §§ 34 to 47 BAO
- Entities owned by corporations and other bodies governed by public law
- Natural persons receiving unemployment insurance benefits at the time of application
How much is the funding?
1. Hardship Fund Phase 1, before Easter
Initially up to € 1,000 per company. Applications for phase 1 could be submitted until Friday, 17 April 2020.
Grant applicants who have a tax assessment notice for at least the 2017 tax year or later receive
- for a net income of less than € 6.000,-- p.a. a subsidy of € 500,--
- with a net income of € 6,000 p.a. or more, a grant of € 1,000
- Grant applicants who meet the eligibility requirements of this directive and do not have a tax assessment certificate will receive a grant of € 500.
- Comeback bonus is € 500,-- per month for a maximum of 6 months, i.e. a total of up to € 3.000,-- per applicant
- Compensation of net income loss up to € 2,000 per company, per month for a maximum of 6 months, i.e. a total of up to € 12,000 per applicant
- In total, the maximum total funding amount is therefore EUR 15,000.00 per applicant.
- The funding is granted retrospectively.
Applications for phase 2 can be submitted from 20 April 2020.
Below you will find important improvements for entrepreneurs as well as the guidelines and funding criteria for phase 2:
- The circle of recipients was expanded, so that significantly more entrepreneurs receive money from the fund;
- In future, even people who are marginally active in business will be eligible to apply;
- Upper and lower income limits will no longer apply in the future;
- Multiple insurance policies and additional earnings are no longer grounds for exclusion- are, however, taken into account when determining the compensation of the net loss of income;
- In addition, in phase 2, young entrepreneurs can now also apply for support when setting up a business between 2018 and 2020. Up to now, the prerequisite of a positive balance for new micro-enterprises has been problematic. For example, those who invested a lot of capital in the first year of their company's existence in 2019 and accumulated losses in the first year of its existence were not covered by the state support until now. Now not only companies with a date of foundation from 1 January 2020, but also companies with a date of foundation from 1 January 2018 will be supported with a lump sum of 500 euros.
Applications can only be submitted online to the WKO. The online application process and the online application form for phase 2 can be found here:
The maximum amount of funding for applicants is now a total of € 15,000. Subsidies from payment phase I or from the artists' social security fund will not be credited against the comeback bonus. However, they will be taken into account when compensating for the loss of net income.
In general, applications for the hardship fund can be submitted until 31.12.2020.
How is the calculation made?
The calculation is based on the net loss of income. The period under consideration for the net income loss is the respective month of the Corona crisis. For small and micro enterprises, the second phase of the hardship fund was adapted once again and the observation period extended by an additional three months until 15 December 2020.
These observation periods are predefined:
- Observation period 1: 16 March 2020 - 15 April 2020;
- Observation period 2: 16 April 2020 - 15 May 2020;
- Observation period 3: 16 May 2020 - 15 June 2020;
- Observation period 4: 16 June 2020 - 15 July 2020;
- Observation period 5: 16 July 2020 - 15 August 2020;
- Observation period 6: 16 August 2020 - 15 September 2020;
- Observation period 7: 16. September 2020 – 15. Oktober 2020;
- Observation period 8: 16. Oktober 2020 – 15. November 2020;
- Observation period 9: 16. November 2020 – 15. Dezember 2020
A separate application must be submitted for each observation period! The funding applicant decides for which six months (these do not necessarily have to be consecutive) of the nine months shown above he/she applies for support.
Grants already awarded in phase 1 will be credited in phase 2. However, support from Phase 1 or support from the Artists' Social Security Fund will not count towards the comeback bonus.
What are the main prerequisites for funding?
- Registered office or permanent establishment in Austria
- Affected by an economically significant threat from COVID-19. This means no longer being able to cover the running costs OR affected by an officially ordered ban on entering the premises due to COVID-19 OR a drop in sales of at least 50% compared to the same month of the previous year.
- Companies founded between 1 January and 15 March 2020 are also eligible for funding, receiving a lump sum of 500 euros per month (i.e. period under consideration) if they can independently determine and plausibly present their net loss of income.
- The previous upper income limit and the previous lower income limit no longer apply. However, the legally binding income tax assessment for the last year of the period 2015 to 2019 must include positive income from self-employment and/or trade or a positive balance from this income.
- Insurance relationship in a legally prescribed health and/or pension insurance. The insurance relationship must be based on own activity, a pension based on own activity or a widow's pension, but not necessarily on self-employment. However, a mere co-insurance is not sufficient
- Multiple health and/or pension insurance policies are permitted.
- If there is no income tax assessment for the period 2015 to 2019, there must be unlimited income tax liability in Austria for the settlement of net income loss
- If there is an entitlement to benefits from private or occupational insurance to cover COVID-19 effects, this is taken into account when determining the subsidised net loss of income.
For further information as well as for support in the application process, please contact Christoph Schmidl.
Financial and liquidity support for companies
A. Corona crisis fund (€ 15 billion)
With the COVID-19 Act passed on 15.3.2020 and the 2nd COVID-19 Act published on 21.3.2020, € 38 billion are available to overcome the corona crisis, € 15 billion of which are available through the so-called Corona Aid Fund. Since the beginning of April, further Covid-19 laws and thus the legal basis for the provision of funds for crisis management have been created. The Corona Relief Fund is intended to cushion liquidity problems and revenue losses and consists of two main instruments for this purpose: Liability guarantees for financing and direct grants.
The COVID-19 Act of 15.3.2020 already amended the ABBAG Act (Federal Act on the Establishment of a Federal Mining Participation Company). The business purpose of ABBAG was expanded to include the provision of services and the taking of financial measures in favour of companies to maintain solvency and bridge liquidity problems caused by the Corona crisis.
On the basis of the 3rd COVID-19 Act, COFAG (COVID-19 Finanzierungsagentur des Bundes GmbH) was founded as a subsidiary of ABBAG for this extended scope of duties. Funds from the Corona Aid Fund are provided/guaranteed by COFAG. COFAG outsources the banking-related processing of financing issues (banking-related assessment through credit assessment and processing) to the various banks. The COVID-19 Act of 15 March 2020 provided that the Federal Ministry of Finance (BMF) regulates the guidelines in the context of measures to maintain solvency and to bridge liquidity problems by way of ordinance.
On 8 April 2020, the COFAG Ordinance was issued together with guidelines for the regulation of bridging guarantees for SMEs and large companies. On 14.4.2020, the guidelines for the second part of the Corona Assistance Fund, the direct grants, were published. At present, the directive concerning direct subsidies has not yet been published in the Federal Law Gazette.
The funds from the Corona Auxiliary Fund amounting to € 15 billion are available as follows:
- Guarantees for bridging finance and direct loans
- Direct grants in the form of non-repayable direct grants for fixed costs "Fixed cost grants
Company has its registered office or a permanent establishment in Austria and carries out its main operating activities in Austria.
Companies, regardless of their size, which are affected by COVID-19 and have liquidity problems as a result
Companies in all sectors except finance and insurance
Company must not have been in "difficulty" on 31.12.2019 (definition under EU block exemption regulation - see below)
Aid intensity and aid ceiling
The Republic guarantees 90 % of the financing raised.
Maximum amount of financing:
- 25% annual turnover or
- 2 times the annual wage and salary total or
- Liquidity needs 12 months (large companies) or 18 months (SMEs)
- but not exceeding € 120 million.
- amounts in excess of this amount only in justified exceptional cases and with a separate audit.
Use of the guaranteed financing
- Leasing fees
- Loan instalments and interest payments
- Wages and salaries incl. ancillary wage costs
- adequate remuneration of employers
- taxes, duties and fees
- essential services/payments for goods
- Repayment of advance payments
- Insurance premiums (necessary for operations)
No aid will be granted for the use of financing for
- debt rescheduling
- Buyback of own shares
- Payments of bonuses to board members and managing director
Interest rate / guarantee fee
90% guarantee: maximum 1% for financing plus guarantee fee 0.25-2% (depending on company size and duration)
|Guarantee fee||up to 1 year||from 2 to 3 years||from 4 to 6 years|
|SMES||25 BPS||50 BPS||100 BPS|
|Large companies||50 BPS||100 BPS||200 BPS|
maximum of 6 years; an extension of the original duration is possible on reasoned request
- Withdrawals and profit distributions
- Prohibited from 16.3.2020 to 16.3.2021
- Moderate withdrawal/profit distribution policy for the remaining time
- Remuneration policy:
- Remuneration of owners, executive bodies and employees in accordance with the economic circumstances
- no bonuses in 2020 to board members/managing directors amounting to more than 50% of the bonus payment of the previous year
- Application via house bank, which serves as "single point of contact" and forwards the application to the respective funding agency (OeKB for large companies, AWS for SMEs or ÖHT for tourism companies). COFAG issues the guarantees to the financing banks via the three funding agencies and decides on the granting of the guarantee
- Application possible since 8 April 2020
- The numerical documentation of the financing requirement (what/when/how/wherefore) as well as the possibilities of repatriation of the planning must be substantiated by a planning calculation. This planning calculation will have to be designed in different ways depending on the size and complexity of the company. In addition to the numerical representations, especially the cause of the financing requirement by COVID-19, the measures taken to reduce costs and the use of all measures and financial reserves will have to be verbally explained.
- COFAG forms are available for the application.
Company in "difficulty" (UiS): According to the Block Exemption Regulation, a company is in "difficulty" if one of the following circumstances applies:
- Loss of half of the share capital/capital stock or equity capital as shown in the company's books (exception for SMEs that have been in existence for less than 3 years and for SMEs eligible for risk financing within 7 years of the first sale)
- company in insolvency proceedings or fulfils the conditions for the opening of insolvency proceedings
- Company has received rescue or restructuring aid and rescue loan has not yet been repaid or is still subject to a restructuring plan
- Non-SMEs are considered to be UiS if the following ratios are met cumulatively on two consecutive balance sheet dates:
- Debt ratio > 7.5 (corresponds to an equity ratio of 11.76%)
- Interest coverage ratio > 1 (interest expense through EBITDA)
In order to obtain financing, the liquidity requirement must be demonstrated due to the Corona-related decline in sales and the existing - irreducible - fixed costs. It must also be shown plausibly that the bridging financing together with the other measures such as short-time working are sufficient to bridge the liquidity bottleneck. On the basis of a planning calculation (taking into account the changed market situation) it must be shown plausibly that liquidity can be maintained on a sustained basis and that it will also be possible to service the bridge financing. This means that an at least simplified planning including liquidity planning for 2020 and subsequent years must be submitted and its plausibility must be confirmed. We will be happy to support you in this.
Currently, the fixed cost subsidy is to be expanded and extended by a phase 2. To this end, an extension of the fixed cost subsidy by 6 months and an adjustment of the sales limits are planned. We will inform you as soon as the details are available.
The key data given here on non-repayable direct grants from the Corona Hilfsfonds is the ordinance on Section 3b (3) of the ABBAG Act on the granting of grants to cover fixed costs by the COVID-19 Finanzierungsagentur des Bundes GmbH (COFAG) published on 14 May. Under certain conditions, non-repayable grants will be made to cover fixed costs. The overall framework for the granting of such subsidies is set at EUR 8 billion in accordance with the Directive.
An overview of all grants and subsidies can be found in our COVID-19 Grant Navigator (in German).
The direct grants in the form of fixed cost subsidies serve to maintain the solvency and bridge liquidity problems of companies affected by COVID-19 and thus suffer a decline in sales of at least 40%.
The banking and insurance sectors and companies owned by local authorities are excluded. The aid measure is aimed at companies whose fixed costs amount to at least EUR 2,000 within 3 consecutive months.
Amount of the grant
The amount and the maximum amount depend on the extent of the loss of sales. Replaced:
- 25% of the fixed costs in case of loss of sales of 40 to 60%, max. EUR 30 million
- 50% of the fixed costs in case of loss of sales of 60 to 80%, max. EUR 60 million
- 75% of fixed costs Loss of sales from 80 to 100%, max. EUR 90 million
Within the group of companies, the maximum amount is only granted once. The maximum amount is determined by the company with the highest loss of sales:
Two variants are available for determining the loss of sales and fixed costs:
- Determination variant 1:
- Loss of sales: Comparison of Q2 2020 with Q2 2019 for determination
- Fixed costs between 16.3.2020 and 15.6.2020
- Determination variant 2:
- Loss of sales: Comparison of three consecutive monthly periods beginning with 16.3 at the earliest until 15.9. with the corresponding period of the previous year
- Fixed costs in the respective period under consideration
Definition of fixed costs
- Rent and lease of business premises Business activities
- company insurance premiums
- Interest expenses
- Financing cost portion of the leasing instalments
- operating license fees
- Expenses for electricity, gas, telecommunications
- Personnel expenses i.c. Cancellations and repostings
- Expenses for other contractual operational payment obligations, unless relating to personnel
- Loss of value for perishable/seasonal goods, loss of value > 50%.
- adequate wages
- As of 31.12.2019, the company is not a company in difficulty under the EU Block Exemption Regulation
- Company has its registered office or permanent establishment in Austria and carries out its main activities there
- Withdrawals and profit distributions
- Prohibited from 16.3.2020 to 16.3.2021
- Moderate withdrawal/profit distribution policy up to 3 months after payment of the last fixed cost subsidy
- Remuneration policy:
- Fixed cost allowances may not be used to pay bonuses to directors and managers
- no bonuses in 2020 to board members/managing directors amounting to more than 50% of the bonus payment of the previous year
- job retention
- Exclusion of funding for companies with more than 250 employees who have given notice to more than 3% of the employees (calculated in full-time equivalents) instead of using short-time work
- Reasonable measures to preserve jobs (e.g. through short-time working)
- The grants may not be used to repay financial liabilities, make investments or buy back own shares
- Fixed costs must not be replaced several times by e.g. insurance or other public support
- Measures to reduce fixed costs ("duty to mitigate damage by means of ex ante consideration").
Applications for a fixed cost grant must be submitted by 31.8.2021 at the latest. However, it is also possible to apply for payment in part in the form of accontois before the end of the calendar year 2020.
- Applications for payment from 20.5.2020 and at the latest by 31.8.2021
- The application is possible in subsequent tranches:
- Tranche 1: First third from 20.5.2020
- Tranche 2: Second third from 19.8.2020
- Tranche 3: Third third from 19.11.2020
The ABBAG Act allows the promotion of all enterprises, regardless of their size (SMEs and large enterprises) through a specific EU exemption rule ("Temporary framework for State aid to support the economy in view of the current COVID-19 outbreak" C (2020) 1863 final of 19 March 2020 as amended on 2 April 2020 C(2020) 2215 final). These subsidies fall under the Corona Aid Fund (see above).
On the basis of an existing, albeit amended, legal basis of the SME Promotion Act and the Guarantee Act, Austria Wirtschaftsservice (AWS) and the Austrian Hotel and Tourism Bank (ÖHT) are entitled to grant guarantees to SMEs. The main difference between ÖHT and AWS is that the ÖHT is responsible for all SMEs in the tourism and leisure industry, but only up to a maximum financing amount of € 1.5 million.
There is no restriction to certain economic sectors, but restrictions under EU law must still be observed (steel industry, synthetic fibres industry, transport sector).
The financing amounts of the companies can be secured by the AWS and the ÖHT with a guarantee ratio of 100%, 90% or 80% respectively.
- SMEs with liquidity requirements to finance current operations or to service/defer existing credit lines and leasing liabilities
- Company has its headquarters or a permanent establishment in Austria
- For the 100% and 90% guarantees, the following applies: the company must not have been in "difficulty" on 31.12.2019 (definition under the EU block exemption regulation - see above)
- The following applies to the 80% guarantees: the company must not be insolvent or in need of reorganisation in accordance with URG. Companies are therefore excluded if they meet URG criteria:
- equity ratio < 8% and
- Notional debt repayment period > 15 years
Funding level and limit and conditions
- 100% guarantee rate for up to € 500,000 financing amount including lease financing with restrictions on the ceiling for the fisheries and aqua sector (€ 120,000) and for primary agricultural production (€ 120,000)
- Financing costs: 0% interest 1st & 2nd year, then3-month Euribor + 0.75%
- Guarantee fee: none
- Guarantee period max. 5 years, redemption-free until 1.1.2021
- up to a maximum financing amount of € 27.7 million; thus, a maximum liability guarantee of € 25 million can be claimed. A guarantee amount of up to € 40 million per company is possible. For this purpose, the aws guideline was adapted based on the Guarantee Act.
- Guarantees of up to € 1.5 million are applied for either from AWS or ÖHT, depending on the industry. AWS is responsible for amounts in excess of this amount, regardless of the sector.
- The amount of funding is based on the following criteria:
- 25 % of the annual turnover or
- 2 times the annual wage and salary sum or a maximum of € 120 million (exceeding this amount is only possible in justified exceptional cases) or
- Liquidity requirements 18 months or
- for financing operations which only run until 31.12.2020, the financing amount may be exceeded in justified cases.
- Financing costs: upper interest rate limit at 1% p.a. fixed
- Guarantee fee:
- Year 1 until 31.12.2020: 0.25%
- Year 2+3: 0,5
- thereafter: 1 %
- Guarantee period maximum 5 years
80% guarantee (de minimis guarantees):
- 80% guarantee rate for a maximum financing amount of € 1.5 million (provided that the full de minimis framework is still available), i.e. the upper limit of the liability amount is € 1.2 million
- Financing costs: interest rate ceiling at 2% p.a.
- Guarantee fee: none
- Guarantee period
- up to EUR 500,000 Financing amount: 3 years (variant only for ÖHT)
- up to EUR 1.5 million Financing amount: 5 years
Guarantee eligible financing in connection with the Corona crisis
- current operating costs (e.g. personnel costs, material costs)
- Additional collateralisation of existing credit lines and leasing liabilities ("deferral")
- Debt rescheduling
- Buyback of own shares
- Payments of bonuses to board members/managing directors
- Applications are possible since mid-April and must be submitted by 31.12.2020 at the latest
- Application with the financing bank online at the AWS Fördermanager or via the ÖHT website
- AWS or ÖHT checks and confirms to the financing institution that the guarantee has been given
- Disbursement by financing institution
- The AWS checks compliance with the conditions in random sample cases on a risk-based ex post and ex post basis by the tax authorities
C. Further possibilities
- There are also separate funding opportunities in the respective federal states.
- In addition, large export-oriented companies have access to the guarantee facilities of the Austrian Kontrollbank.
- In addition to these public-sector subsidies, private investors (equity, debt and mezzanine capital) will also offer their support.
Your advisor or Gerda Leimer will be pleased to assist you in the application process and in clarifying the next steps.
1. Deferral or instalment payment of social security contributions
The following options will be available both for contributions by self-employed persons and tradesmen to the SVS and for the payment of contributions by employers to the ÖGK.
- Payment by instalments
- Reduction of the provisional contribution base for the SVS
- Total or partial leniency with regards to late payment interest
Important in this context is the fact that the legal maturity of the contributions remains.
Employers who are or were affected by the "Closure Ordinance" or a ban on entry under the Epidemics Act had the option of automatic deferral of contributions without interest on arrears for the contribution periods February, March and April 2020. This also applied to all other companies that were confronted with corona-related liquidity problems upon application.
A second deferral package is now available for the contribution periods February, March and April 2020.
The contributions already deferred for the contribution periods February, March and April 2020 must be transferred to ÖGK by 15 January 2021 at the latest. Interest on arrears is still not due. A separate application by the employer is not necessary in this context.
If the contributions for these contribution periods cannot be paid in part or even in full at that time due to corona-related liquidity problems, an application for payment in instalments can be made. The open contributions for February, March and April 2020 are then to be paid in eleven equal instalments from February 2021 until the 15th of each month, taking into account the three-day respiro period. No interest on arrears will accrue during the instalment payment period.
The relevant application can only be made from January 2021. In any case, the liquidity problems caused by the corona must be substantiated. Applications received before this date cannot be processed at present.
Contribution periods May, June and July 2020
If it is not possible to pay the contributions due for the contribution periods May, June and July 2020 due to the coronavirus pandemic for reasons of company liquidity, ÖGK will grant a deferral until the end of August 2020 at the employer's request, after which, if necessary due to coronavirus, payment in instalments can be agreed. Instalment payments are possible until December 2021 at the latest. Interest on arrears will be charged.
Such applications can be submitted from 5.6.2020. Corresponding forms are available on the ÖGK website. The corona-related payment difficulty must be substantiated when submitting the application.
Contribution periods August to December:
For these periods applications are currently not possible.
Exempted from the above provisions for the contribution periods February to July 2020 are those contributions for which the employer is entitled to a support benefit (e.g. short-time work allowance) from the Federal Government or the Public Employment Service on the basis of short-time work, release of a risk patient or segregation under Section 7 of the Epidemic Law 1950. These contributions are to be paid without interest on arrears by the 15th of the calendar month following the subsidy, reimbursement or remuneration payment. The three-day respiro period must be taken into account.
As accompanying measures, the legislator has provided for changes in the provisions on rescission and the extension of the notification period under the IESG.
Due to the special situation, late notifications - with the exception of registrations - were not sanctioned by the ÖGK in March, April and May 2020. The freedom from sanctions will now be extended until 31.8.2020.
ÖGK legal measures by National Council resolution of 20.03.2020.
The ÖGK supports companies with accomodations for payments:
- Deferrals for the contribution periods February, March and April 2020: For companies affected by the "Closure Ordinance" or a ban on entry under the Epidemic Law, contributions are automatically deferred. Other companies with corona-related liquidity problems can apply for deferral of contributions to the ÖGK. The informal application must include the corona-related problems and must be addressed to the respective regional service centre. For the duration of the deferral, no interest on arrears will be charged. Please note: A deferral of social security contributions to the ÖGK is only possible until May 31st.
- Suspension of recovery measures in the months of March, April and May 2020: In these months there will be no recovery measures such as execution requests etc.
- No insolvency applications will be filed.
- No default surcharges are prescribed for late notifications of contribution bases due to corona.
- Direct debits must be revoked by email or by phone at ÖGK - we will be happy to support you in this process and provide the temporary revocation
- Debits already made cannot be retransferred!
The ÖGK will make the submission of applications and accounting as unbureaucratic as possible. We will inform you about any changes. In this context, it is important to note that companies will not be disadvantaged if the relevant applications are not submitted immediately.
ATTENTION - Please note:
- The basic rules of payroll accounting remain in place.
- The legal due date of the contributions remains unchanged.
- Applications for compulsory insurance must still be submitted in due time before the start of work.
- The monthly basic contribution notifications must be sent to ÖGK on the usual dates.
ÖGK requests the companies to maintain their previous excellent reporting and payment morale as far as possible even in these exceptional times and thus continue to enable the functioning of the welfare state.
Employers can contact ÖGK's Employer Service Centre if they have any questions or need clarification.
Your Grant Thornton Personal Advisor will be happy to support you in the application process and in clarifying the next steps.
Tax office - Accomodation of payments
The payment of a levy can be postponed (deferral) or payment in instalments can be agreed - this also includes wage tax and all non-wage labour costs. Please contact your personal advisor to apply for the accomodation of payments.
2. Reduction of advance payments for income and corporation tax
The BMF has provided the possibility for all taxpayers to set the advance payments for income or corporation tax at € 0.00 for the year 2020. The necessity and rationale caused by the SARS-CoV-2 virus has to be be substantiated in the application.
If a tax payment is expected for the year 2020, the taxpayer can apply for a reduction of the advance payments up to € 0.00 due to liquidity bottlenecks.
If the reduction results in a subsequent tax payment within the scope of the assessment for 2020, the tax authorities will refrain from setting interest for the subsequent claim.
The tax office must process the applications immediately. We will be happy to submit the corresponding application for you - your Grant Thornton Personal Advisor will contact you in this regard. Your advisor will be happy to support you in filing the application and in clarifying the further steps.
3. Tax deferral or instalment agreement with application for exemption from deferral interest and late payment surcharges
In addition to the possibility of reducing advance payments, taxpayers have the option of applying for a deferral of tax payments or an agreeing a payment plan. The necessity of this must be clearly attributed to the SARS-CoV-2 virus and substantiated as such in the application.
This possibility exists for VAT payments and wage payments. With the application, it is also possible to apply for the non-determination of interest and late payment surcharges.
Deferral of municipal tax (Kommunalsteuer, KommSt) and subway tax (Dienstgeberabgabe, DGA)
The City of Vienna is currently processing applications. Due to the high number of applications, a positive decision will NOT be sent out until further notice. In other words, if there is no communication from the municipality within 6 weeks, it can be assumed that the application for deferral has been accepted.
Deferrals are possible for contributions from March to July until 30.9.2020.
Your Grant Thornton Personal Advisor will be happy to support you in filing the application and in clarifying further steps.
Application for short-time work
-> Guide to payroll accounting including calculation examples (in German) from the Federal Ministry of Labour, Family and Youth
Control annual sixths
What is new in relation to the previous regulation is that the time of the inflow is no longer the only factor to be taken into account for the assessment of an open sixth of a year, but also the time of payment of the last withdrawal.
This means that at the end of the year or if the employment relationship is terminated during the year, the one-sixth of the year must be recalculated as a "control six-month" on the basis of the current remuneration actually paid.
When determining the control six-month may result in subsequent taxation if the current remuneration fluctuates (e.g. changes in working hours, irregular payment of overtime, long periods of sick leave, but also unemployment). Only maternity protection and parental leave periods are not affected.
The current regulations on short-time work stipulate in the social partner agreement that the remuneration to be taken into account in calculating the special payments is the remuneration that would have been due if no short-time work had been agreed.
However, since the preferential taxation of six percent for special payments is only entitled to one-sixth of the current annual remuneration, but the original salary is reduced by 10% - 20% during short-time work, this results in a difference which would be taxable according to the standard rate.
The government has announced an adjustment of the regulation for employees affected by short-time work. However, it is currently still open in which form the regulation will be adjusted. We will inform you as soon as the details are available.
Amendment to the Labour Market Service Act
The amendment to the Labour Market Service Act, which not only simplifies payroll accounting but also further specifies the provisions on short-time working, has been adopted. The new regulations apply retroactively from 1 March and are also to be applied to existing short-time working applications:
It was clarified that the obligation of companies to maintain the workforce only applies to employees affected by short-time working. It remains to be seen to what extent the social partners will react to this change and adapt the new social partner agreements valid from 1 June 2020.
The new regulation is intended to eliminate disadvantages of the current rounding rules when calculating short-time working pay. The calculation of the gross remuneration based on the net replacement rate is now carried out in the same way as the flat rates of the AMS (even above the maximum contribution basis).
The amendment creates the basis for a gross remuneration table, from which the short-time working salaries for employees can be calculated in steps of 5 euros. The table will probably be published next week in the form of a BMAFJ regulation.
Requests for prolongations
Requests for prolongations can still be submitted retroactively, from 1 July 2020 at the latest three weeks after the planned start of the extension. However, according to the WKO, it should be noted that there is a maximum of four calendar days between the end of the initial request and the start of the extension request.
On the AMS website, new social partner agreements for initial and renewal applications with a short-time work start from 1.6.2020 (to be submitted with the short-time work application) have been published. These are to be used for initial applications from 1.6. and for extension applications from the 4th month of short-time work.
The differences to the previous social partner agreements include the fact that the employer can, under certain conditions, order a higher working time than that agreed in principle in the agreement. In future, companies will no longer have to notify the social partners of changes in working hours. The obligation to retain working hours after short-time work no longer applies with the consent of the works council (in the case of a company agreement) or the trade union (in the case of an individual agreement) or the AMS Regional Advisory Council. There is no obligation to make up for any termination during the probationary period or due to retirement.
Please note that, according to information from the AMS, it is no longer possible to submit an initial application retroactively from 1 June 2020. New applications for short-time working must always be submitted before the start of the short-time working period from this date.
Prolongation applications for short-time working
According to the current regulations, short-time working can be extended by a further 3 months if economically necessary, but no longer than 30 September 2020.
Premature discontuination of short time work
Early discontuination is possible in principle, a this is explicitly set out in the social partner agreement.
Risk groups: COVID-19 medical risk certificates are available from 11 May 2020.
Restrictions for foreign employers: When filing a short time work subsidy application (Antrag Kurzarbeitsbeihilfe) to the Austrian labour authority (AMS) by operations/businesses in Austria of foreign companies/employers certain preconditions need to be fulfilled to be entitled to this federal subsidy.
The COVID-19 short-time work allowance is settled monthly using a settlement file.The following procedure must be followed when settling COVID-19 reduced hours allowance:
Phase 1: Prerequisites
Prerequisites for the settlement of the COVID-19 short-time work allowance are the successful submission of the application form, the social partner agreement as the basis for short-time work and a positive notification of support from the AMS regarding the approved short-time work allowance.
Phase 2: Accounting options
There are two ways to create the payroll run:
1st way: AMS web application for billing
2nd way: Data import or data acquisition with the AMS Excel project file
Phase 3: Upload and send in the corporate eAMS account (applies to both ways from phase 2)
Please note that only approved projects are taken into account. Due to the retroactive application possibility, a settlement for the month of March will still be possible until 28.5.2020.
You can find detailed information as well as videos in German of the settlement here:
In addition to the previously possible variant of reduced working hours with a 6-week application period, there will be a significantly shortened and extended variant as of Monday:
Within 48 hours, companies of all sectors and all sizes can apply for short-time working [forced reduction in hours] at the responsible Public Employment Service AMS. The procedure is as follows:
- Contact the responsible office of the AMS (by telephone or via eAMS account or e-mail)
- Social Partner Agreement
- Application to AMS
As an employer, you must agree with the works council or, in companies without a works council, with the individual employees on the duration and extent of short-time work (i.e. how many hours per week are to be reduced). The agreement is initially possible for a maximum of 3 months, extensions will be possible.
The agreement must then be submitted to the interest groups (chamber of commerce and trade union) for signature - this will be done within 48 hours. From this time on, it will be possible to apply for the short-time work allowance at the responsible Public Employment Service.
Please note, however, that it is necessary to reduce time credits and holidays from previous years before the social partners give their approval. During these periods, the employer must continue to pay the allowance based on time worked before short-time work.
For the first time, working on short time can be extended to up to 100%. Over the entire short time working period, however, the work performance must be at least 10%. Employees will of course continue to be paid their (aliquot) remuneration by their employer for any work they continue to perform in the company.
However, for the hours not worked or reduced, employees will receive short-time work compensation to replace the previous salary for the reduced working hours.
This net replacement rate is staggered according to the previous income level:
- 80% net replacement rate if the remuneration before short-time work exceeds € 2,685.00 gross
- 85% with a remuneration between € 1.700,00 and € 2.685,00 gross
- 90% with a monthly fee of up to € 1.700,00 gross
The AMS bears the additional costs, not the employer. The employer is entitled to reimbursement of expenses by the AMS up to the maximum contribution basis.
The advantage is that the employment relationship is maintained, and the net income of the employee is approximately equal. The social security contributions are to be paid based on the salary before short-time work. The AMS flat rates also include the pro-rata social security contributions. According to current information from the AMS, the new short time working model also includes these increased contributions from the fourth month onwards.
After the end of short-time work, the employment relationship can continue as before the start of reduced working hours. The employer is also obliged to maintain the employment level during short-time work and up to one month after the end of short-time work. In the event of special circumstances, negotiations are to be held on the reduction or removal of the notice period.
Even if nobody can predict the duration and intensity of the crisis, an assessment of the financial situation is crucial. Possible scenarios of business developments must be shown, and the liquidity requirements must be determined. Here, a combination of the various support measures such as short-time work and bridging financing must be depicted in order to apply for support measures correctly and in a timely manner. Only a well-documented financing / guarantee application will also be assessed positively and thus be helpful for the company. In addition to the public sector, it will certainly also be possible to approach private investors (debt and equity capital, mezzanine capital). Please feel free to contact us.
Your advisor or Gerda Leimer will be happy to support you in the application process and in clarifying the next steps.
Rent and lease payments
Rents and lease payments may be reduced if operations are restricted or closed down due to COVID-19 measures. In case of doubt, we recommend to pay the rent only under reserve. Each individual case must be examined in detail.
For further information and clarification of further steps, please contact Martin Wagner. Further updates and information will follow.
Paid leave of absence
It is possible to arrange a special childcare period with all employees who have childcare obligations for children up to the age of 14 for the 3 weeks until the start of the Easter holidays on April 3rd, 2020. The state will cover one third of the costs. The decision whether special care time can be offered is made by the employer. The entitlement to remuneration is capped at the monthly ASVG maximum contribution basis and must be claimed from the responsible tax office within 6 weeks of the day on which the official measures are lifted.
Christoph Schmidl will be happy to assist you with personnel issues and payroll accounting.
Interdisciplinary crisis management
For organisations of all sizes, Grant Thornton Austria offers a comprehensive approach to successful crisis management. The Crisis Response Team of Grant Thornton Austria combines the experience of four renowned experts for the following tasks:
- Crisis Management & Security
- Liquidity & Corporate Planning
- Disputes & Strategy
- Financing & Structure
For further information concerning crisis management issues please contact Marlene Halikias
Contact us - We are always available for you - even in this crisis. In the next few days we will keep you regularly updated on the current status of the above-mentioned government measures. Our experts from across our teams are able to advise and pleased to help you with respect to current and future liquidity planning and assist in planning and conversations with banks and other financing partners.
Your consultant and Gerda Leimer (T(direct) +43 1 5054313 3128, and Werner Leiter (T(direct) +43 1 5054313 3114, as members of the Task Force Covid19, will support you with the above-mentioned topics and introduce you to our relevant specialists.