BMDW: Draft for a "Grace Period Law" is available

Nov 3, 2021 Benn-Ibler Rechtsanwälte

The Federal Ministry for Digitalisation and Economic Affairs (Bundesministerium für Digitalisierung und Wirtschaftsstandort, BMDW) has submitted a draft for the so-called "Grace Period Act". It mainly deals with the suspension of the exercise of a trade or business and facilitation of business transfers.

So far, business people are obliged to notify the Chamber of Commerce of the suspension and resumption of their trade within three weeks. Failure to notify the Chamber in due time may result in an administrative penalty. This obligation is now to be dropped. Instead, the suspension is to be newly designed as a right that business owners can claim (Section 93 para 1 of the Trade, Commerce and Industry Regulation Act - Gewerbeordnung, GewO). Therefore - due to the principle of favourability under criminal law - all pending administrative criminal proceedings are to be discontinued. This is primarily intended to benefit those businesses that have ceased operations due to COVID-19 or due to classic company holidays, but have forgotten to report it.

The law also makes things easier for the transfer of businesses. For example, the following shall apply in connection with employee protection for a period of two years from the transfer of the business (Sec. 101a of the Employee Protection Act - ArbeitnehmerInnenschutzgesetz, ASchG):

• If safety representatives are appointed, the notification to the Labour Inspectorate (Arbeitsinspektorat) according to Sec. 10 para 8 ASchG is omitted.
• The Occupational Safety and Health Committee (Arbeitsschutzausschuss) must be convened at least once within two years. The chair, invitation and minutes are not subject to any formal requirements.

In addition, a monitoring of a transfer of a business to relatives is to be established in terms of tax law (Secs. 153h - 153l Federal Fiscal Code - Bundesabgabenordnung, BAO). Only natural persons may file such an application. Special requirements apply with regard to the legal form and structure of the participation in companies (Sec. 153i para 1 no 1 BAO). Furthermore, the Austrian tax office (Finanzamt Österreich) must be responsible for collecting the company's sales tax. Large companies are therefore not allowed to monitor the transfer of a business.

During the monitoring, there are increased disclosure periods to the tax office. At the same time, meetings between the representatives of the company concerned and the tax office can be held as often as necessary to clarify tax-related issues. This is intended to ensure legal and planning security.

BMDW, Draft review (22.10.2021)