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Austria.
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Support measures for companies affected by COVID-19

  1. Hardship-fund for EPU and micro enterprises
  2. Financial support to ensure the liquidity of companies
  3. Measures to reduce liquidity shortages caused by tax and social security contributions
  4. Corona short-time work

In order to mitigate the economic disadvantages resulting from the measures to prevent the spread of the 'Coronavirus', the following sectors should be financially supported:

  • Measures facilitating economic recovery
  • Mitigating the loss of revenue as a result of the crisis
  • Stimulation of the labor market

1. Hardship-fund for EPU, micro enterprises and new founders

In order to help affected companies through the crisis quickly and unbureaucratically, the Republic of Austria set up a hardship fund with a volume of EUR 2 billion. The payments from the hardship fund are a non-repayable, tax-free grant.
 
Support from the hardship fund can be applied for in two phases
 
  • Phase 1: Emergency aid
    Application possible as early as March 27, 2020 (until April 17, 2020) Immediate payment of
    • EUR 500 (annual net income between EUR 5,528 und EUR 6,000)
    • EUR 1,000 (annual net income from EUR 6,000)
  • Phase 2: From April 20, 2020 (until mid-December, 2020)
    Payments amounting to 80% of lost income up to a maximum of EUR 2,000 per month for six months.
  • "Comeback bonus" amounting to a maximum of EUR 500 per month for six months.
  • In total, a non-taxable subsidy of up to EUR 15,000 is granted.

Target group

  • One-person companies
  • Micro-enterprises with less than 10 employees (full-time equivalents), with an annual turnover or balance sheet total not exceeding EUR 2 million
  • New self-employed persons
  • Independent contractors and liberal professions
  • Shareholders who are compulsorily insured

Key prerequisites

  • Legally operated commercial company in the own name and on own account or independent professional practice of a freelance profession.
  • Registered office or permanent establishment in Austria.
  • Economically significant losses due to COVID-19 (no longer able to cover running costs or officially ordered ban on entering the premises or a drop in sales of at least 50% compared to the same month of the previous year).
  • Phase 1:
    Company foundation until December 31, 2019 (registration of trade license or commencement of business activity)
  • Phase 2:
    -  
    A minimum amount of EUR 500 per month is provided to all eligible persons. This also applies to young entrepreneurs who started their business after January 1, 2018.
    -  NEW: The period under consideration is extended to mid-December (previously September 15, 2020). During this nine-month period any six months can be chosen flexibly for the application, they do not have to be consecutive.
    - NEW: A "comeback bonus" of EUR 500 per month will be paid out (maximum total of EUR 3,000 for six months).
    The minimum payment per month is thus EUR 1,000 including the "comeback bonus" (EUR 6,000 for six months); a maximum amount of up to EUR 15,000 is possible, depending on the loss of sales.
    -   No maximum or minimum income limits apply.
    -   Multiple insurances as well as additional income are no criteria for exclusion.

Application

  • Online-application (German) via the Austrian Federal Economic Chamber
  • Applications can be submitted monthly in the period from mid-March to mid-December 2020.
  • Quick and unbureaucratic payment after positive feedback on the application.
 
Hardship-Fund Phase 2 (German)

2. Financial support to ensure the liquidity of companies

2.1  Corona assistance fund

The EUR 15 billion Corona assistance fund is aimed to support companies which are facing huge falls in turnover. Support from the corona assistance fund can be applied for with effect from April 8, 2020.

The focus is on companies (SMEs and large companies), which are confronted with major losses in turnover as a result of the corona crisis, and sectors which are particularly affected by measures such as entry bans, travel restrictions and bans on meetings.

The corona assistance fund has two instruments at its disposal:

  • Government guarantees for loans
  • Non-repayable grants

Loan guarantee of the Republic of Austria

Scope and amount

Federal guarantees are available for loans amounting to 90% of the loan volume. The upper limit is a maximum of three month's turnover or a total of EUR 120 milliond (this can only be increased in exceptional cases).

A loan interest rate not exceeding 1% is applied. In addition, guarantee fees of between 0.25 and 2% are charged in accordance with EU state aid law (depending on the size of the company and the term of the guarantee).

Maximum duration is 5 years and can be extended by up to 5 years.

Prerequisites

Location and business operations must be in Austria and there must be a liquidity requirement for the domestic location.

Application and issue of the guarantee

Single point of contact is the principal bank. Depending on the company, the application is forwarded to Austria Wirtschaftsservice (for SMEs), Österreichische Hotel- und Tourismusbank (for tourism companies) or Oesterreichische Kontrollbank (for large companies).

Through these three funding bodies, COFAG (Covid-19 Funding Agency) issues credit guarantees for loans granted by banks to companies. COFAG guarantees 90% of the loan amount.

Applications may be submitted from April 8, 2020. From submission to approval, complete applications will be processed within 7 working days. First payments should therefore be possible as early as April 15, 2020.

Grants to cover fixed costs

In addition to guarantees, grants are given to cover fixed costs on the part of companies which suffer from serious liquidity shortfalls and loss of revenue as a result of the coronavirus crisis.

The funding takes the form of a tax-free, non-repayable grant to cover fixed costs.

Prerequisites:

  • Funding is provided to companies whose headquarters or permanent establishment are in Austria and which perform a significant operational activity in Austria.
  • Companies with more than 250 employees as of December 31, 2019 as well as companies in the finance and insurance sector are excluded.
  • Companies which were experiencing financial difficulties as of December 31, 2019 are also not eligible for funding (pursuant to EU rules on state aid).
  • The companies must take reasonable measures to reduce fixed costs and safeguard jobs in Austria.

Fixed costs encompass, amongst other things, rents for business premises and leases, interest expenses for loans, expenses for electricity, gas and telecommunications, operational insurance premiums, financing costs of leasing instalments, operational license fees and other required, contractually operational payment obligations and the loss of value of perishable or seasonal goods with at least 50 percent of the value lost as a consequence of the COVID-19 crisis.

Fixed costs grant - Phase 1:

All companies which suffered a loss of revenue of at least 40 percent in the period
March 16, 2020 to 15 September 2020 are eligible to receive the grant. The subsidy awarded to cover fixed costs can be claimed for up to three consecutive months.

Scope and amount of the grant:

The fixed costs grant is staggered according to amount of lost revenue and is limited to a maximum of EUR 90 million per company:

  • 40-60% 25% compensation (max. of EUR 30 million)
  • 60-80% 50% compensation (max. of EUR 60 million)
  • 80-100% 75% compensation (max. of EUR 90 million)

Application and payment of the grant:

The application for payment of the fixed costs subsidy can be directly submitted by every company via FinanzOnline.

After an expert opinion is obtained in the form of a plausibility check, which will not take more than five working days, the application is forwarded to the government body responsible for coordinating payments (the COVID-19 financing agency of the federal government - COFAG).

The payment of the fixed costs grant is carried out in three tranches: 
Applications for the first tranche (as of May 20, 2020): 50 percent of the grant is paid. Applications for the second tranche (as of August 19, 2020) for an additional 25 percent of the grant. Applications for the third tranche can be submitted as of November 19, 2020.

Fixed costs grant - Phase 2 (as of September 16, 2020):

Extension by an additional six months

In order to preserve the solvency of companies and to bridge liquidity shortfalls in connection with the spread of COVID-19, grants to cover fixed costs in Phase 1 and Phase 2 are now funded to the amount of EUR 12 billion (previously EUR 8 billion).

New funding prerequisites in Phase 2:

  • The duration of the period for which the grant can be paid (observation period) has been extended to nine months (period lasting from June 16, 2020 to March 15, 2021).
  • The grant can be awarded for up to six consecutive months in the period under review.
  • In the second phase, an application for the grant to cover fixed costs can already be submitted in the case of a 30 percent loss of revenue (previously 40 percent).
  • The fixed costs grant is calculated on a straight-line basis and not in stages. For example, in the case of a 100 percent loss of revenue, 100 percent of the fixed costs are covered by the subsidy.
  • The definition of fixed costs eligible for funding has been expanded to encompass deductions for depreciation (AfA) and imputed depreciation on moveable assets. Leasing payments are completely covered.
  • The AfA and leasing payments can also be recognized retroactively for the observation period of the fixed costs grant in Phase 1.
  • The fixed cost grant is limited to a maximum of EUR 5 million per company, and the lower limit is specified at EUR 500.
  • The flat rate option is new:
    In the case of annual revenue of under EUR 100,000 in the previous tax year, a lump sum equalling 30 percent of the loss of revenue can be recognized as fixed costs.

Application and payment:

Similar to Phase 1, the application for payment of the fixed costs subsidy for Phase 2 can be directly submitted via FinanzOnline.

The fixed cost subsidy is paid out in two tranches.

  •  Applications for the first tranche can first be submitted starting on September 16, 2021 and equals 50 percent of the probable amount to be disbursed.
  • Applications for the second tranche can be submitted as of December 16, 2020.

The application can be made up until 31 August 2021.

www.bmf.gv.at/en/press/press-releases/2020/August/Applications-open-for-second-tranche-of-fixed-cost-grant

www.bmf.gv.at/en/top-subjects/Fixed-cost-subsidy--Apply-now

2.2 Bridge finance guarantees / direct loans

The aim is to facilitate the financing of working capital loans for companies whose sales and earnings performance is impaired by order, delivery or other market changes due to the Corona crisis.

Funding agencies:

aws:
-> for EPUs and SMEs (commercial and industrial)
-> for large companies (with financing requirements of up to EUR 0.5 million)
-> for SMEs in the tourism and leisure industry (loan amount exceeding EUR 4.4 million)

ÖHT:
-> for SMEs in the tourism and leisure industry (loan amount of up to EUR 4.4 million)

OeKB:
-> for large companies (with financing requirements of more than EUR 0.5 million)
-> for export companies

aws (Austria Wirtschaftsservice)
Financing of running costs (e.g. purchases of goods, personnel costs, rent, insurance/ leasing installments, credit deferments) to secure the liquidity of the company.

Applications can be submitted online via aws Fördermanager together with the financing house bank. Approval is processed by aws in a fast-track procedure (usually within 24 hours, for guarantees exceeding EUR 20 million within 48 hours on average).

Bridge Finance Guarantees

Bridging guarantees for EPUs and SMEs:

Option 1:

  • Guarantee rate: 100%
  • Loan amount: up to EUR 500,000 (can also be used in partial amounts)
  • Guarantee period: 5 years
  • Grace period until Jan. 1, 2021
  • Interest rate: 0% fixed p.a.
  • No aws guarantee fee
  • Companies in difficulty according to the EU definition are not eligible

(Guarantee can only be granted if the company was not in economic difficulties on December 31, 2019, but got into trouble afterwards, due to the Corona crisis.)

Option 2:

  • Guarantee rate: 90%
  • Loan amount: up to EUR 27.7 million (aws guarantee liability max. of EUR 25 million)
  • Guarantee period: 5 years
  • Interest rate: 1% fixed p.a.
  • aws guarantee fee: 0.25% - 1%
  • No company in difficulty according to EU definition (see above)

Option 3:

  • Guarantee rate: 80%
  • Loan amount: up to EUR 1.5 Mio.
  • Guarantee period: 5 years
  • Interest rate cap: variable
  • No aws guarantee fee
  • Prerequisite: De-minimis must be available

Bridging guarantees for large companies:

  • Guarantee rate: 100%
  • Loan amount: up to EUR 500,000 (can also be used in partial amounts)
  • Guarantee period: 5 years
  • Grace period until Jan. 1, 2021
  • Interest rate: 0% fixed p.a.
  • No aws guarantee fee
  • Fast-track aws approval
  • No company in difficulty according to EU definition (see above)

Financing requirements of large companies exceeding EUR 500,000 can be applied for at OeKB.

ÖHT (Österreichische Hotel- und Tourismusbank)

Austrian Hotel and Tourism Bank (ÖHT), together with the Federal Ministry of Agriculture, Regions and Tourism, has implemented a package of Corona measures to maintain the liquidity of affected SMEs in the tourism and leisure industry despite declining turnover and to secure existing jobs, avoid insolvencies and ensure that the companies can continue their operative business.

This package consists of bridging financing with guarantees from the ÖHT and the cost takeover of processing fees and liability commission. Application is submitted to the house bank via the online portal of the ÖHT (German).

Maßnahmenpaket Tourismus (German)

COVID-19 100% guarantee

  • Bridging loan up to EUR 500,000
  • Liability rate: 100%
  • Interest rate cap house bank: 0 % fixed (1st and 2nd year)
  • Duration: 5 years
  • Liability: Default in payment
  • No company in difficulty according to EU definition

(Guarantee can only be granted if the company was not in economic difficulties on December 31, 2019, but got into trouble afterwards, due to the Corona crisis.)

COVID-19 90% guarantee

  • Bridging loan up to EUR 4.4 million
  • Liability rate: 90%
  • Interest rate cap house bank: 1 % fixed
  • Duration: 5 years
  • Liability: Insolvency
  • No company in difficulty according to EU definition (see above)

COVID-19 80% guarantee (BMLRT I)

  • Bridging loan up to EUR 500,000
  • Liability rate: 80%
  • Guaranteed interest rate: max. 2%
  • Duration: 3 years
  • Liability: Insolvency
  • Company in difficulty according to EU definition (see above)
  • Grants for interest and capital costs: are available as follow-up subsidies in the provinces of Vienna, Burgenland, Upper Austria, Salzburg, Styria and Tyrol. An additional application is not necessary.

COVID-19 80% guarantee (BMLRT II)

  • Bridging loan EUR 500,000 - EUR 1.5 million
  • Liability rate: 80%
  • Guaranteed interest rate: max. 2%
  • Duration: 5 years
  • Liability: Insolvency
  • Company in difficulty according to EU definition (see above)

Guarantees for loans exceeding EUR 4.4 million for SMEs in the tourism and leisure industry are provided by aws (Austria Wirtschaftsservice).

OeKB (Oesterreichische Kontrollbank)

Bridging guarantees for large enterprises:
OeKB is taking over the processing of financing guarantees for large Austrian companies (more than 250 employees and annual turnover of more than EUR 50 million or total
assets of more than EUR 43 million) with liquidity difficulties caused by the Corona crisis, regardless if the companies are exporting or have already been OeKB's customer.

Financing requirements of large companies exceeding EUR 500,000 can be applied for at OeKB. Large companies with a financial demand of up to EUR 500,000 are supported by aws.

The state guarantee, which OeKB is processing on behalf of COFAG (Covid-19 Federal Funding Agency) in this context, amounts to 90 percent of the requested financing amount.

  • The loan amount is based on the actual liquidity requirement and is capped at - twice the annual wages of the company or
    - 25% of annual turnover or
    - EUR 120 million
  • Guarantee rate: 90%
  • Interest rate: max. 1%
  • Duration: 5 years
  • No company in difficulty according to EU definition

Tourism companies:
OeKB processes the bridging guarantee for large tourism enterprises, according to EU definition. Bridging loans for SMEs in the tourism and leisure industry are handled by the Austrian Hotel and Tourism Bank (ÖHT).

Applications can be submitted by the principal bank via the OeKB online tool "Exportgarantien Online" (German).

Corona Aid Fund

Bridging guarantees for export companies:
Export companies can apply for a credit line of 10 percent (large companies) or 15 percent (SMEs) of their export sales to OeKB via their house bank.

  • Credit amount up to a maximum of EUR 60 million per company
  • Liability rate: 50% - 70%
  • Prerequisite: Existing export activity
  • No company in difficulty according to EU definition

COVID-19 Aid

2.3. Special tax regulations concerning Coronavirus.

Measures of the Federal Ministry of Finance:

  •  Reduction of the advance payments of income and corporate tax for 2020 (down to zero)
    If this reduction results in an additional claim in the assessment for 2020, no claim interest will be charged. The reduction of the advance payment of corporate income tax for 2020 can be applied for until October 31, 2020.

  • Payment facilitations (deferment or payment in istalments) 
    Deferrals granted after March 15, 2020, as a result of Covid exposure, and expiring on October 1, 2020 will be automatically extended until January 15, 2021 (no deferral interest will be charged during this period). This extension will also include all duties that have been credited to the tax account until September 25, 2020. As an alternative to the deferral, an application for a preferential payment by instalments can be applied for with immediate effect until the end of the deferral period (October 1, 2020 at the latest).
  • Application for late payment charges
    For charges due between March 15, 2020 and October 31, 2020 no charges for late payment will be levied.
  • Extension of the deadline for submitting annual tax returns for 2019
    until bis August 31, 2020
  • Non-imposition of late charges
    Interest on declarations not submitted in due time will not be imposed until August 31, 2020.

3. Measures to reduce liquidity shortages regarding tax and social security contributions

3.1. Special tax regulations concerning Coronavirus

  • Prepayments of income or corporate income tax for 2020

Prepayments of income or corporate income tax for 2020 can be reduced or assessed amounting to EUR 0. In addition, there is the possibility to total or partial non-imposition of prepayments of income or corporate income tax for 2020.

Taxpayers which are affected by a loss of income due to the SARS-CoV-2 virus may apply for a reduction of prepayments for income or corporate income tax for the calendar year 2020 until the 31st of October 2020. The application can be filed via FinanzOnline. For taxpayers who do not use/have access to FinanzOnline, a template form is provided.

  • Tax collection

Taxpayers may apply to their tax office to defer the date of payment of a tax (deferment) or to grant payment in instalments. The application has to include specific facts of the taxpayer's individual circumstances of being affected. When processing the application the tax office has to take into account the specific situation that occurred in individual cases due to the SARS-CoV-2 virus. The application has to be processed immediately.

Taxpayers may apply to their tax office to reduce or not assess a fine for late payment. The application must include the taxpayer's specific circumstances of being affected and explain these credibly. When processing the taxpayer's application for a reduction or non-assessment of late payment fines, the tax office has to take into account that there is no gross negligence in the delay if the taxpayer's specific circumstances of being affected have been substantiated.

3.2. Social security contributions

Social security contributions for employees (ÖGK): Automatic deferment at the level of the social security carrier without any specific measures to be taken.

Social security contributions traders (SVS): Applications for deferred or instalment payments can be made with an informal email. The reduction of the current provisional contributions can be made via an online application.

4. Corona short-time work

EUR 12 billion were made available for the Corona short-time work model.
The new Corona short-time work model is a simplified, particularly attractive form of short-time work. It secures the continued employment of skilled workers and preserves the liquidity of companies - regardless of their size and respective sector in which they operate. Austrian jobs will be saved even in challenging times.

The new short-time work model includes major improvements compared to the former short-time work model. Access to short-time work will also be easier for those companies which have not used this instrument so far. The duration time for the application will be reduced to 48 hours, previously, more than six weeks were required.

Minimum income during short-time work

The following general key points will now be regulated by law:

  • During the entire reference period, working time and thus the related remuneration can be reduced by a maximum of 90 percent. However, a weekly working time of zero hours can also be agreed upon over a period of time.
  • The employer receives a short-time work grant provided by the AMS (Employment Market Service) which covers most of the additional costs incurred by a net compensation rate of 80-90% depending on the previous net income:
    • In the case of a gross salary of up to EUR 1,700, the remuneration amounts to 90% of the previous net salary.
    • In the case of a gross salary of up to EUR 2,685, the remuneration amounts to 85% of the previous net salary.
    • In the case of a gross salary of more than EUR 2,686, the remuneration amounts to 80% of the previous net salary.
    • For income up to the maximum contribution basis, the AMS covers the additional costs incurring for the employer in comparison to actual working time but not for the portions of income above the maximum contribution basis.
  • Within the context of extending short-time work, the employer has to document the fact that serious efforts were made to reduce current vacation time entitlements by three weeks. Previous vacation time and working time credits can also be reduced during the period of short-time work.
  • The application for short-time work grants can be submitted retroactively as of March 1, 2020. The Corona short-time work can be applied for a period of three months. If needed, an extension for additional three months is possible.

NEW Corona short-time work model as of October 1, 2020 (Phase 3):

The Corona short-time work model agreed upon in March 2020 succeeded in securing jobs and thus kept the economic engine running. The new short-time work extension model, negotiated by the social partners, creates planning reliability, legal certainty and a maximum degree of support for all companies which continue to be strongly affected as well as their employees.

An overview of the key points of the new short-time work model:

  • Extension of short-time work by a further six months as of October 1, 2020
    The current valid Corona short-time work model for all companies will continue until September 30, 2020. Afterwards, the Corona short-time work program will be extended for another six months, namely from October 1, 2020 until 31 March 2021.
    An extension for another six-month period starting on April 1, 2021 will be necessary due to the special impacts of the coronavirus crisis on certain sectors and will be initiated in a timely manner.

  • Working time can range between 30 percent and 80 percent of the normal level
    In Phase 3, working time can be reduced to 30 percent, and may equal a maximum of 80 percent of the previous normal working hours. The average reference period to calculate working hours is six months. In special cases, working hours can be below the specified minimum of 30 percent if approved by the social partners.

  • Net replacement rate of 80/85/90 percent for all employees remains valid
    Employees will continue to receive 80, 85 or 90 percent of their net salaries before short-time work. Salary and wage increases (adjustments to collective wage agreements, bi-annual salary increases) will be taken into account in the remuneration paid for short-time work.

  • As in the past, employers are required to retain employees for at least one month after the end of the short-time work period

  • Compensation will continue to be paid to companies for all additional costs
    The employer pays the pro rata share of the costs for the work being done (i.e. wages/salaries). The costs for working hours lost including all non-wage labor costs and sick leave will continue to be fully covered by the AMS.

  • Standardized procedures to assess economic effects
    The approval procedure will continue to be an unbureaucratic and shortened process. For Phase 3 it is newly implemented that, within the context of extending short-time work, the company has to submit a forecast for the future along with the social partnership agreement, taking account of the planned economic development of the company. This forecast has to be confirmed by a third party.

  •  Readiness for further training during the short-time work period
    During their time of not working, employees are obliged to be ready to undergo further training. Non-working hours encompass the lost working time compensated for by the AMS on the basis of the short-time work grants. Further training is carried out by the AMS in cooperation with the company. The professional development training can be made up for within a period of 18 months if there is a need for the employees to work and the further training measures have to be interrupted.

  • Safeguarding apprenticeship training during the short-time work period
    The proper training of apprentices will also be safeguarded for those companies which have been subject to short-time work for a long time.

Social partnership agreements and detailed information on the new short-time work model are being worked out and will be available soon.

Details

Claudia Reisner

Info Management
+43-1-588 58-251
c.reisner@aba.gv.at

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