Fixed cost subsidy will be extended from September

Oct 16, 2020 Benn-Ibler Rechtsanwälte

In September 2020, the second phase of the fixed cost subsidy will start for companies that suffer COVID-19-related revenue losses. In this context, new guidelines for granting these Phase II subsidies were published.

The Fixed Cost Subsidy II (Fixkostenzuschuss II, FKZ II) may only be granted if the following conditions are met cumulatively:

- Registered office or permanent establishment in Austria

- Income according to Sec. 21, 22 or 23 of the Income Tax Act 1988 (Einkommensteuergesetz, EStG)

- No legally binding financial penalty and no legally binding abuse as defined by the Federal Fiscal Code (Bundesabgabenordnung, BAO)

- Loss of sales due to the spread of COVID-19

- Damage-reducing measures were taken in order to reduce the fixed costs to be covered (damage reduction obligation)

Excluded from the granting of fixed cost subsidies are in particular local authorities and publicly owned institutions as well as companies that had more than 250 employees measured in full-time equivalents as of December 31, 2019, and that terminated more than 3% of their employees in the period considered instead of making use of short-time working.

Fixed costs within the meaning of the guideline are exclusively expenses from the Company's operating activities. In particular, these include office space rents and leases, depreciation of fixed assets, interest expenses for loans and credits, and expenses for electricity, gas and other energy and heating costs. Personnel costs are only included in fixed costs if they are incurred exclusively for processing cancellations and transfers due to the crisis.

The FKZ II is granted from a loss of turnover of at least 30% and must be applied for by 31.08.2021 at the latest. At the request of COFAG (Covid-19-Finanzierungsagentuer des Bundes) or the tax authorities, all necessary documents and confirmations that are relevant for the granting of the subsidy must be submitted.

The published guidelines of the Federal Minister of Finance are subject to the approval of the measures by the European Commission.

Directive on the granting of fixed cost subsidies of phase II