News and updates regarding economic measures against the COVID-19 pandemic

The duration of the pandemic means that there are always extensions and expansions of the measures to support companies that have been severely affected by the pandemic. The following provides an overview of current measures, news, and important deadlines.

Increase in the aid framework for fixed cost subsidies II and the reduction rate

After the EU Commission recently increased the limits for COVID-19 aid, the corresponding support measures were also adjusted in Austria. The new upper limit for the fixed cost subsidy II (formerly 800,000) was raised retroactively to 1.8 million euros per company. To ensure that the money reaches the companies as quickly as possible, COFAG will adjust the applications for the fixed cost subsidy submitted so far to the increased limit. For applications that have not yet been disbursed, the first tranche will be disbursed at the adjusted amount; for applications that have already been disbursed, a surcharge will be applied to the first tranche.

In the case of the reduction rate, the upper limit per company was increased from €3 million to €10 million. As with the fixed cost subsidy, COFAG is required to adjust the applications submitted so far to the increased limit. Both for the fixed cost subsidy and the reduction rate (see also COVID-19 reimbursement for uncovered fixed costs; January 2021Furthermore, clarifications (in the regulation and the directive) have been made. These include, for example, new start-ups, re-branding, and instructions on how to combine these subsidies with sales compensation, the failure bonus, etc.

Extension of short-time work until the end of June 2021

The Corona furlough scheme was originally intended to run until the end of March 2021 and has now been extended by another three months until the end of June 2021. After this fourth phase of the furlough scheme, the proven support for companies is to be phased out (the safeguarding of jobs will then also be ensured through other measures). In this phase, the (net) income replacement remains unchanged at 80 to 90 % for employees, with the working time in normal cases being reduced to up to 30 % of normal working time. In sectors that must remain closed due to the officially ordered lockdown, a reduction to 0 % working time is also possible. The calculation of the short-time work benefit remains unchanged compared to the AMS. Furthermore, it is a prerequisite that the economic necessity for short-time work and the sales development are confirmed by a tax advisor, auditor, or financial accountant. Similarly, continuing education during short-time work is an important goal that should be promoted and incentivized. As an incentive, companies receive 60 % of the training costs from the AMS if they send their employees for further training during short-time work.

Numerous extensions until the end of June 2021

The COVID-19-related tax deferrals have been extended by another three months until the end of June. Similarly, the introduction of the COVID-19 installment payment model has been postponed by three months.

In addition, various special tax regulations that were originally due to expire at the end of March 2021 have been extended until mid-year. These details include the tax-free treatment of allowances and bonuses despite teleworking, quarantine, and short-time work, as well as the eligibility for the commuter allowance in the case of working from home.

Homeoffice package approved in National Council

As reported (see Tax and social security legal framework for home office; February 2021The home office package provides various tax incentives that are intended to make working from home more convenient. Thus, employees can deduct up to 300 € in employee tax allowances for ergonomic-friendly furniture (e.g., swivel chair, desk, or lighting) within the framework of employee tax allowances (a receipt is required), provided that they can demonstrate at least 26 home office days in the calendar year. If this equipment was purchased in 2020 (at a cost of 300 €), 150 € can be deducted from the employee tax allowances for the years 2020 and 2021. Additionally, employers are allowed to pay amounts up to a maximum of 300 € per year and employee, tax-free, to compensate for additional costs incurred by employees working from home (up to a maximum of 3 € per employee for a maximum of 100 home office days). If the employer’s tax-free benefit is not fully utilized, the employee can deduct the difference as advertising expenses.

Tax-compliant behavior as a prerequisite for future subsidies

As early as 1 January 2021, the so-called "well-being behavior law" came into effect. Under the law, companies may be excluded from future subsidies in connection with the COVID-19 pandemic if they have not behaved "tax-wise in a well-being manner". If they have already received corresponding subsidies, they must repay them with interest (4.5 % % above the base interest rate). However, the new law has no effect on subsidies already in place before the beginning of the year, such as the fixed cost subsidy, turnover compensation, loss-of-profit compensation, and the subsidy for location-related companies – although in some cases, a similar behavior of the companies is already being inferred from these subsidies. Tax compliance means, in concrete terms, that no abuse within the meaning of § 22 of the BAO has been conclusively determined within the last three years of tax assessment, which has resulted in a change in the tax assessment basis of at least €100,000. The same applies to the extent that there is no withholding tax on intra-group interest or license fees that are taxed at less than 10 % to the recipient, or that no addition methods change of at least €100,000 has occurred in the last 5 years (if appropriate disclosure in the tax return increases the amount to €500,000). Tax-advantaged behavior also means that for economic years starting after December 31, 2018, predominantly passive income was not earned in a state listed in the EU list of non-cooperative jurisdictions, and no legally binding financial penalty or association fine of more than €10,000 has been imposed on the company in the last five years before the application was submitted.

Lockdown turnover compensation II for companies indirectly significantly affected by the lockdown

The Lockdown Turnover Compensation II is intended to support those companies that, although they were not forced to close due to the lockdown in November and December 2020, were nevertheless indirectly significantly affected by the lockdowns. An example of this is a food wholesaler that supplied catering establishments that were closed during the lockdown and were therefore directly affected by the lockdown. The sales to the food wholesaler for the catering establishments are eligible sales and are replaced by the Lockdown Turnover Compensation II provided that the general requirements are met. Similarly, for example, a catering company that normally generates sales with event organizers can apply for the Lockdown Turnover Compensation II. This is because events were prohibited during the lockdown, which also indirectly significantly affected the catering company. The revenues to the organizers (e.g. for the provision of buffets) as directly affected companies can thus be taken into account in the application.

An essential prerequisite alongside operational activity in Austria is that the indirectly affected companies must achieve a minimum level of eligible sales (the sales relationship is established when the company generates at least half of its sales with companies operating in sectors directly affected by the lockdown or generates at least 50% of % its sales with directly affected companies on behalf of third parties) and have a sales decline % of more than 40%. For the calculation of the sales decline, a separate consideration is to be made for November and December 2020.

The Lockdown Turnover Supplement II can be applied for via FinanzOnline from February 16, 2021, until June 30, 2021. In principle, the application (as well as the necessary confirmations) must be submitted by a tax advisor, auditor, or bookkeeper. However, the company itself can also submit the application, provided that, among other things, the estimated amount of the Lockdown Turnover Supplement II does not exceed the amount of €5,000. The Lockdown Turnover Supplement II is capped at €800,000 per company (minus certain already received subsidies), and its amount depends on the industry category. As with many other subsidies, maintaining jobs is a prerequisite for the company applying for it. No terminations of employment are permitted during the selected period (or periods).

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