As the COVID pandemic still has us in its grip, COVID funding and accompanying measures continue to be necessary to maintain a stable economy. The following is a brief summary of main aspects of the new measures.

 

1. New COVID funding measures

Default bonus III (“Ausfallsbonus III”)

The default bonus III can be applied for the months November 2021 to March 2022, provided that there is a 40% (30% in November and December 2021) loss in sales. The periods under consideration are as follows:

 

observation period	comparison period	application period
November 2021	November 2019	10.12.2021 – 09.03.2022
December 2021	December 2019	10.01.2022 – 09.04.2022
January 2022	January 2020	10.02.2022 – 09.05.2022
February 2022	February 2020	10.03.2022 – 09.06.2022
March 2022	March 2019	10.04.2022 – 09.07.2022

 

Depending on the industry, 10 – 40% of the loss of sales is refunded. The maximum funding amount is EUR 80,000 per month. Additionally, the sum of the default bonus III and short-time working allowances for the observation period must not exceed the comparable sales for the period.

Due to the fact that the owner of the company is obliged to keep the economic damage as low as possible, especially no profit distributions may be made in the period from December 1, 2021 to June 30, 2022 (unless they are legally mandatory) and no own shares may be repurchased.

A default bonus III can be granted until the maximum amount of EUR 2,3 million less certain other financial measures received (e.g. fix cost subsidy 800.000, revenue replacement) has been reached.

 

Loss compensation III (“Verlustersatz III”)

The loss compensation will be extended for the months of January to March 2022 (provided that no fixed cost subsidy has been claimed). Prerequisite is a drop in sales of at least 40% (previously 30 or 50%). The periods under consideration are as follows:

 

observation period	comparison period
January 2022	January 2019
February 2022	February 2019
March 2022	March 2019

 

The replacement rate is unchanged and depends on the size of the enterprise (small and micro enterprises 90%, medium or large enterprises 70%).

Due to the fact that the owner of the company is obliged to keep the economic damage as low as possible, especially no profit distributions may be made in the period from January 1, 2022 to June 30, 2022 (unless they are legally mandatory) and no own shares may be repurchased.

The application can be submitted for all three observation periods. If an application is submitted for only two months, the two months must coincide. Payment is made in one or two tranches (tranche 1: 10.2.2022 – 9.4.2022; tranche 2: 10.4.2022 – 30.9.2022). In the case of two tranches, any corrections have to be made in the second tranche. It is also possible to apply for the entire amount in the course of the second tranche.

The maximum amount of total loss compensation per company was increased to EUR 12 million (previously EUR 10 million).

 

Hardship fund phase 4

One-person company (“EPU”) and micro enterprises can apply for the hardship fund. The prerequisite is, among other things, the economic impact of the Corona crisis in the period under consideration (ie current costs cannot be covered or drop in sales of at least 40% [November and December 2021 at least 30%]). Additionally, e.g. receiving unemployment compensation and a company foundation after October 31, 2021 are also reasons for exclusion.

The periods under consideration are as follows:

 

observation period	comparison period	application period
November 2021	November 2019 or 1/3 from Q4/2019	01.12.2021 – 02.05.2022
December 2021	December 2019 or 1/3 from Q4/2019	01.01.2022 – 02.05.2022
January 2022	January 2020 or 1/3 from Q1/2020	01.02.2022 – 02.05.2022
February 2022	February 2020 or 1/3 from Q1/2020	01.02.2022 – 02.05.2022
March 2022	March 2019 or 1/3 from Q1/2019	01.04.2022 – 02.05.2022

 

The allowance for compensation for loss of income is again generally based on the net loss of income, which is determined on the basis of data derived from an income tax assessment of a previous year.

 

2. Other accompanying measures

Repayment obligation for certain COVID funding in the event of COVID administrative penalties

Finally, it should be noted that it has been announced that in the event of violations of the COVID regulations (e.g. no control of the 2G-inspections) parts of the certain COVID funding (e.g. loss compensation III, default bonus III) has to be repaid.

Extension of the deadline for disclosing annual financial statements to the companies register

For annual financial statements with a reporting date between January 1, 2021 and September 30, 2021, the deadline for disclosure to the companies register will be extended to 12 months.

Corona bonus until February 2022

Employers can pay their employees a tax-free Corona bonus of up to EUR 3,000. However, this bonus must be related to the work assignment during the Covid pandemic and may not replace any other bonus but must be paid in addition. The payment has to be made by February 2022.

 

3. Outlook

After almost two years with COVID measures, companies are familiar with most of the support tools. However, since the framework conditions are regularly adjusted as support instruments are renewed and FAQs are continuously maintained, COVID support measures need to be constantly reviewed in order to make the best use of them.

 

Authors:

Christoph Puchner, Managing Partner and Tax Advisor &
Bianca Habitzl, Tax Manager from ECOVIS Austria, one of the leading tax consultants in Austria in the startup sector.