15th April 2020
Erwin Ulreich, PFK+Partner Steuerberatungs- und Wirtschaftsprüfungs-GmbH & Co KG
The Austrian government has announced an aid package of up to 38 billion euros to deal with the COVID-19 consequences. MSI's Austrian accounting member summarises the various support packages available for businesses and individuals.
A total of up to 38 billion euros are to be made available, including an emergency aid package of 4 billion euros, 9 billion euros for guarantees and liabilities for credit protection, 15 billion euros for emergency aid for industries that are “particularly hard hit”, and 10 billion euros for tax deferrals.
Starting with 27 March 2020 individual entrepreneurs and small business could file an application to get in phase 1 a non-repayable grant of EUR 500 or EUR 1,000, depending on their net income stated in their previous tax declaration.In phase 2, starting on 16 April 2020, the loss of earnings from the current “COVID month” (e.g. March 16 to April 15) compared to the income coming from the last available tax assessment notice or the average of the last 3 available tax assessment notices is replaced by up to 80 % and capped at EUR 2,000 per month for a maximum of 3 months. This is again a non-repayable grant. Any grants received from phase 1 will be offset against the first grant from phase 2.
Instead of dismissing employees the government, together with the social partners (i.e. official representatives of employers and employees), introduced a “Corona short-time work” model which allows companies to reduce the normal working hours for a period of not more than 3 months. They may reduce the working hours per employee between 10 % and 90 %. Employees receive between 80 % and 90 % of their previous salary, depending on their gross salary. For their part, employers are reimbursed part of the wage costs – up to 83 %.
The Corona Aid Fund provides guarantees from the Republic of Austria and direct grants to cover the liquidity needs of companies.The Republic’s guarantee covers 90 % of the loan amount. This secures working capital loans. The upper limit for this is a maximum of 3 monthly sales or a maximum of EUR 120 million. The term is a maximum of 5 years and can be extended by up to 5 years.Direct grants are granted to cover fixed costs for companies in the corona crisis. The fixed cost subsidy is staggered (between 25 % and 75 % replacement) and depending on the loss of sales of the company (40 % – 60 % -> 25 %; 60 % – 80 % -> 50 %; 80 % – 100 % -> 75 %). The fixed cost subsidy is limited to a maximum of EUR 90 million per company. The payment is made after the damage has been determined, i.e. after the end of the business year and the submission of a confirmation of the decline in sales and the replaceable fixed costs.Payments will be made by the company’s house bank in consultation with the AWS (the promotional bank of the Austrian federal government).
The aim is to facilitate the financing of working capital loans from companies whose sales and earnings development is impaired by order, delivery or other market changes due to the “corona virus crisis”.
– Reduction of the advance payments of income and corporate tax for 2020 (down to zero)
– Payment facilitations (deferment or payment in instalments) until 30 September 2020
– Non-imposition of late-payment surcharges already fixed
– Extension of the deadline for submitting annual tax returns for 2019 until 31 August 2020
– Non-imposition of late charges – interest for declarations not submitted in due time will automatically be waived until 31 August 2020.
In the previous weeks we as PFK+Partner had personal contact by phone or video conference to about 80 % of our clients in order to support them in these difficult times, e.g. by preparing the – sometimes complicated and bureaucratic – funding applications.
Further, we could convince companies who at first resigned all employees with a promise of re-employment after the crises to accept the model of short-time work which was introduced by the government.
PFK+Partner Steuerberatung-und Wirtschaftsprüfung was founded in 2005. We offer a comprehensive service to small and medium-sized companies regarding tax, audit, accounting, controlling and business consultancy. We view ourselves as sparring partners for the owner/CEO of the firm we serve.
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