15.4.2020
1. Measures taken by the Ministry of Finance
On March 13th, 2020, the Ministry of Finance announced measures to mitigate the impact of Covid-19 on taxpayers:
Reduction / Non-imposition of income or corporate tax advance payments for 2020:
Taxpayers who are affected by the loss of income due to the Covid-19-Virus can submit an application for a reduction in income or corporate tax advance payments for the calendar year 2020 down to EUR 0 until October 31st, 2020.
If the taxpayer is affected in terms of liquidity in such a way that he cannot pay the determined advance payments, he can apply to the tax office not to determine the income tax or the corporate tax advance payments for the calendar year 2020 in full or to limit the imposition to an amount that is lower than the expected annual tax for 2020.
Refraining from setting supplementary claim interest
The tax office must refrain ex officio from setting interest on supplementary claim if the reduction or discontinuation of advance payments in the assessment of income or corporation tax for 2020 would result in supplementary claim interest.
Deferral and payment in instalments
The taxpayer can apply to the tax office to defer the payment of a tax until September 30th, 2020 or to grant the payment in instalments
Deferred interest
The taxpayer can (eg in the application for deferral or payment in instalments) apply for non imposition of the deferral interest.
Late payment interest
The taxpayer can also apply for the reduction or non imposition of a penalty for late payment. When processing such an application, the tax office must assume that there is no gross negligence in connection with the default if it can be demonstrated that this is due to Covid-19.
Deadline for filing the tax return
The deadline for submitting the annual tax return was extended from the end of April respectively the end of June to August 31st, 2020.
Tax exemptions
- Bonus payments from companies, which currently maintain the everyday life during Corona crisis (such as food chains), to their employees are completely tax-free.
- Subsidies/contributions received from governmental funds established in the course of the corona crisis are tax-exempt.
- Legal transactions that are necessary to carry out the measures in connection with coping with the Covid-19 crisis situation are to be exempt from the stamp duty.
2. Measures: Social Security Contributions
On March 16th, 2020, the Austrian regional health insurance announced measures related to social security contributions:
- No outstanding social security contributions will be reminded.
- An automatic deferral takes place if the social security contributions are not paid, only partially or not on time.
- Installment payments are accepted informally.
- There are no recovery measures.
- No bankruptcy applications are made.
3. Measures: Financial support for Companies in Austria
Guarantees for bridging loans by Austrian Economy Service (“AWS”)
The Federal Government announced support for liquidity shortfalls caused by sales decreases as a result of the Corona virus. Specifically, guarantees for bridging financing amounting to EUR 10 million are offered by the AWS.
- The target group are small and medium-sized companies (these are companies with fewer than 250 employees, max. EUR 50 million in sales or EUR 43 million in total assets) in all industries.
- The guarantee secures 80% of a bridging loan.
- Attention: The measure must not lead to a mere debt restructuring, but must serve to secure and expand liquidity.
- The bridging loan has a term of 5 years.
- The submission is made via the financing house bank.
- AWS decides on the allocation of guarantees.
Financial support of the Austrian Hotel and Tourism Bank (ÖHT)
For SMEs in the tourism and leisure industry collateralisation of bridging finance (max. EUR 500,000.00, max. term 36 months) of the house banks with guarantees from the ÖHT and
assumption of the one-off processing fee (1%) and the liability commission (0.8%).
ÖHT grants the applicant companies a federal guarantee of 80% to secure new bridging loans (current account overdrafts).
Condition precedent for the utilisation of the special promotion scheme is an expected decline
in sales revenues of at least 15% compared to the previous year.
Required documents in addition to the application form
- Company information sheet
- Commitment declaration
- Enclosure application for funding “Coronavirus package of measures“
- Annual financial statements 2018 or more recent
Financing support from the Austrian Kontrollbank (ÖKB)
- For domestic exporters (large companies and SMEs) whose services are not covered by
- the Security Control Act and/or the War Material Ordinance, and
- generally have an Austrian value added of at least 25%.
- Framework credit on the basis of a bill guarantee
- Possible in addition to already existing framework financing with OeKB (KRR or export fund loan)
- The amount of the credit is limited to the amount of last year’s export turnover:
- 10% (large companies)
- 15% (SMES)
- Maximum limit of EUR 60 million for individual loans per group of companies
- No minimum level
- Limited in time for two years (currently)
- The Federal Government can assume insolvency risk – depending on your credit rating between 50 and 70 percent of the credit line.
WKO Hardship funds
One-person entrepreneurs and micro-entrepreneurs as natural persons, who employ fewer than 10 full-time equivalents and have a turnover or balance sheet total of no more than EUR 2 million, and employed shareholders who are compulsorily insured under the GSVG / FSVG, new self-employed persons, freelance employees, freelance professions and private room landlords. The criteria of hardship is met if the entrepreneur is no longer able to cover the running costs or an officially ordered ban on entry or a drop in sales of at least 50% compared to the same month last year.
The hardship fund provides a grant that does not have to be repaid later and consists of two phases:
Phase 1 – Emergency aid (application possible since 27.3.)
- With a net income of less than EUR 6,000 p.a.: Grant of EUR 500.
- With a net income of EUR 6,000 p.a. or more: Subsidy of EUR 1,000.
- Applicants who do not have a tax certificate will receive a grant of EUR 500
Phase 1: Requirements at the time of application
- Independent operator of a commercial company or a freelance profession (WKO membership not necessary)
- Company founded until December 31, 2019
- Companies located in Austria
- Upper limit: A maximum of 80% of the annual maximum contribution basis for social security law. A net income of EUR 33,812 per year is used as the upper limit. The net income is to be taken from the most recent tax assessment (2017 or younger).
- Lower limit: compulsory health insurance – as well as income of at least EUR 5,527.92 p.a.
- No further monthly income above the de minimis limit (EUR 460.66), eg from renting and leasing
- No multiple insurance in health and / or pension insurance
- No more cash payments from local authorities due to Covid-19
- The use of guarantees and short-time work (for any employees in small companies) AND the hardship fund is expressly possible.
- If both the hardship fund and the emergency fund are used, the funding amount from the emergency fund is reduced by the benefit already received from the hardship fund.
- No bankruptcy proceedings pending and no need for reorganization – the “URG” criteria
(equity ratio less than 8%, fictitious debt repayment period more than 15 years) must not have been violated in the past financial year - Funding does not apply to persons who receive unemployment insurance or statutory pension insurance benefits at the time of application.
Phase 2 (exact criteria and timing are still being worked out by the government):
- Start on April 16th, 2020
- Grant of up to a maximum of EUR 6,000, distributed over a period of 3 months
- New founders receive a grant of up to a maximum of EUR 1,500, spread over a period of 3 months
- Changes to the requirements in contrast to phase 1
‒The upper and lower income limits do not apply
‒Multiple insurances as well as additional earnings are no longer grounds for exclusion (model “replenishment” to EUR 2,000)
‒Income from self-employment must be declared in the last available tax assessment SV registration to prove independence - Calculation of the grant from phase 2
‒Loss of earnings from “COVID month” (eg 16.03 to 15.04) compared to old income is replaced by up to 80% (cap EUR 2,000 / month, maximum 3 months)
‒Data for old turnover and old income come from the last available tax assessment or average of the last three available tax assessments (optional, e.g. to compensate for waiting periods)
‒Prove of sales slump by funding applicants (eg cash register receipts, bank statements) - Application
-Monthly applications, allowances from phase 1
Corona Aid Fund
- Objective: quick provision of financial resources for Austrian companies that have severe liquidity shortages due to the Corona crisis
- Companies and industries that are particularly affected by measures such as entry bans, travel restrictions or restrictions on meetings, have liquidity problems and were considered a healthy company before the Corona crisis. Additional requirements must be observed, including distributions and bonus payments to managing directors and board members.
- In addition, the Corona Aid Fund supports companies that are facing major losses in sales and the threat to their business existence as a result of the Corona crisis.
Aid measures in the form of
- Direct loans from COFAG
- Republic guarantees (application from April 8th, 2020)
‒To secure working capital loans
‒Coverage of 90% of the loan amount
‒Upper limit of a maximum of 3 monthly sales or a maximum of EUR 120 millions. This can only be increased in justified exceptional cases.
‒The term is a maximum of 5 years and can be extended by up to 5 years.
‒Prerequisite: the location and business activities must be in Austria and there must be liquidity requirements for the home location - Grants to cover fixed costs (application from April 15th, 2020)
‒The federal government payments are staggered and depending on the loss of sales of the company, if these exceed EUR 2,000 within 3 months:
-40–60% failure: 25% replacement
– 60–80% failure: 50% replacement
-80 -100% failure: 75% replacement
‒The assessment is based on the company’s fixed costs and lost sales between March 15th, 2020 and the end of the Covid-Measures.
AgrarMarkt Austria – Hardship fund
- Full-time agricultural and forestry enterprises with up to 9 employees and a turnover of
up to EUR 2 million - Multiple insurance policies are permitted
- Business start-ups since January 1st, 2020 are funded with a flat rate of EUR 500
- Concerns specifically
- Wine and cider taverns
- Companies with special crops in wine, fruit, garden and vegetable growing as well as with Christmas tree crops
- Companies that rent private rooms or holiday apartments in the agricultural and forestry side businesses (vacation on a farm)
- Businesses that sell agricultural products directly to the gastronomy, schools and communal catering as well as horticultural products promoted directly and to wholesalers and retailers
- Companies that offer agricultural and forest education activities (eg school on a farm,
seminar farmers) - Companies that produce sawn logs on the basis of contracts, but these can no longer
be picked up. - A drop in turnover of at least 50% compared to the same month of the previous year must be proven or a cost increase of at least 50% compared to the same month of the previous year must be recorded for external labour
The payment is made in two phases.
- Phase 1: Immediate help (application possible since March 30th, 2020):
‒Unit value of up to EUR 10,000 – subsidy EUR 500
‒Unit value of more than EUR 10,000 – grant EUR 1,000 - Phase 2 – (start in mid-April)
‒Full-time and part-time businesses can access the fund.
‒Up to EUR 2,000 per month in funding (capping). Additional income will be offset
‒A total of up to EUR 6,000 per company (3 months at EUR 2,000 – applies to phases 1 and 2 together)
– These grants are tax free.
Loans and funds by federal provinces
In addition, several other regional support measures were published, for example in Vienna the Support by Wiener Kreditbürgschafts- und Beteiligungsbank AG (WKBG) or in Lower Austria a government grant to ensure survival of up to EUR 5,000 per business.
Emergency Fund of the Vienna Chamber of Commerce
The City of Vienna and the Vienna Chamber of Commerce each make an acute contribution of EUR 10 million so that Viennese individual and micro-enterprises with up to 10 employees can receive support in the event of a serious impact due to Covid-19 pandemic (decline in sales> 50%).
The funding guidelines are currently being coordinated with the federal funding. An updated funding guideline is to be released by the end of April.
4. Short-time work in Austria
In general, short-time work means a temporary reduction in normal working hours and wages due to economic difficulties.
Short-time work is possible for companies regardless of their size and the respective sector in which they operate (with the exception of federal and provincial governments, municipalities, legal persons under public law and political parties).
Short-time work is intended to temporarily reduce labour costs and at the same time retain the employees. The employer pays a part-time salary and in addition the short-time work benefit which the Austrian Public Employment Service (“AMS”) funds.
The following steps must be heeded:
1.Obtaining of first information in a downloaded document from the AMS or on the WKO (the Austrian Chamber of Commerce) website (https://www.wko.at/corona).
2.Information from the locally responsible regional office of the AMS by telephone, eAMS account or email, about existing or imminent employment problems.
3.Contacting by email the respective regional Chamber of Commerce in order to prepare the social partnership agreement: an example of a works and/or an individual agreement including instructions is already available on the WKO website.
4.If available: Discussions with the works council; otherwise with individual employees.
5.Social partnership agreement: within 48 hours signature of the ready agreement by the social partners (Chamber of Commerce and Union).
6.Submission of the fully completed and signed application for short-time work allowance and the social partner agreement via eAMS account, via e-mail with a qualified electronic signature or by post to the relevant AMS (regional) office. The application can be made retrospectively from March 1st, 2020.
Which framework conditions must be heeded?
- The AMS funding begins at the earliest when the leave for the previous holiday year has been completely used up and the existing time credit has been entirely consumed.
- The work time must on average be reduced by 10% to 90%.
- Short-time work does not lead to a 100% net compensation but rather – depending on the amount
of the gross salary – to only 80% to 90%. In the case of a gross salary above the maximum social security contribution base, the net replacement rate falls below 80%. - Short-time work does not have to be implemented for all employees. However, in general the number of employees may not be reduced until one month after the end of the short-time work.
- The corona short-time work can provisionally be concluded for a maximum of 3 months.
Stay healthy!
Interactive PDF with all COVID-19 measures by country:
The governments of different countries have decided on immediate actions to moderate the impact of the Covid-19 pandemic on their national economy. Our local experts from CEE/SEE present the details of the COVID-19 virus relief measures by 12 countries.
