The exceptional business aid for the month of November 2020 provides further considerable relief to companies, the self-employed, associations and establishments that are particularly affected by the current coronavirus restrictions. Further details and terms of the aid have now been confirmed.
Minister of Finance Olaf Scholz said: “We are assisting those who have to close their business in November as a result of coronavirus measures. I know that people are deeply concerned and that many are waiting for more detailed information on the grant programme. These details have now been settled. I want the aid to reach those affected quickly. If we face this crisis by standing together in solidarity, we will continue to cope fairly well with the pandemic.”
Economic Affairs Minister Peter Altmaier said: “These are times that call for unity and mutual solidarity. In this difficult situation, we cannot leave our companies and their employees to cope on their own. Instead, we will further increase the support available for the self-employed, companies and establishments that are particularly affected by the coronavirus regulations. We have now settled on the conditions for applying for the aid. Advance payments should be made as soon as possible, preferably by the end of November 2020.”
The following conditions apply to the exceptional business aid:
- Total volume: The exceptional business aid will probably total €10 billion.
Eligibility to apply: Eligible applicants include companies, self-employed persons, associations and establishments that are directly affected by the temporary closures as well as companies that are indirectly affected. The following guidelines apply:
Directly affected companies: all companies (including public-sector enterprises), self-employed persons, associations and establishments that have had to cease operations following the closure ordinances issued by the Länder on the basis of the agreement reached between the Federal and Länder governments on 28 October 2020. Hotels are considered directly affected companies.
Indirectly affected companies: all companies that are able to give proof that 80% of their turnover regularly depends on transactions involving companies that are directly affected by the closure orders.
Corporate groups, i.e. companies with several subsidiaries or permanent establishments, are eligible to apply if more than 80% of total corporate turnover is accounted for by affiliated companies that are either directly or indirectly affected by the closure orders. Up to 75% of the turnover of the affiliated companies affected will be reimbursed. In the case of holding companies, for example, that operate both restaurants (closed) and retail companies (open), the emergency aid will be granted if the restaurants account for more than 80% of the holding company’s turnover.
- What is the scope of the aid? The November aid scheme provides for grants covering 75% of the average weekly turnover recorded in November 2019 up to a cap of €1 million for every week of the closure period, insofar as companies leave enough scope for support under EU State aid rules (State aid rules for small amounts of aid).
Grants issued within the framework of the November aid programme that exceed €1 million require notification to and approval of the European Commission. The Federal Government is currently engaging in intense discussions with the European Commission in order to obtain the approval for larger grants.
Own-account workers are given the option to indicate their average weekly turnover for 2019 as an alternative to weekly turnover in November 2019. For eligible applicants that started their business after 31 October 2019, reference turnover is to be determined either on the basis of average weekly turnover in October 2020 or on the basis of average weekly turnover since the date of establishment.
- Crediting of other support payments: Other government payments received for the November 2020 funding period are credited. This particularly applies to support in the form of bridging assistance or short-time work allowance.
- Crediting of turnover received in November: If any turnover is generated in November despite the closures, it is not credited up to a level of 25% of reference turnover. In order to prevent over-funding in excess of 100% of reference turnover, any turnover above this threshold is credited accordingly.
A special rule applies to restaurants offering takeaway options: turnover reimbursement covering 75% of the turnover recorded in the 2019 reference period is limited to those items subject to the full VAT rate, i.e. meals served on site. Thus, turnover from takeaway and delivery services, which are subject to the reduced VAT rate, is exempted. Equally, any turnover from takeaway and delivery services that is generated during the closures is exempted from crediting in order to promote this form of business. The fictitious example of a pizzeria may serve to illustrate this point: in November 2019, on-site meals and takeaway/delivery generated turnover worth €8,000 and €2,000 respectively. Thus, the restaurant will receive €6,000 in November aid (i.e. 75% of €8,000), which falls short of the level of reimbursement provided to other sectors (75% of reference turnover). In November 2020, however, the pizza restaurant is allowed to receive turnover from delivery services in excess of the generally permissible level of 25% (i.e. €2,500 of €10,000) without causing any cuts in funding.
- Application procedure: Applications can be filed throughout the coming weeks via the standardised nationwide IT platform for bridging assistance (www.ueberbrueckungshilfe-unternehmen.de). They have to be submitted electronically by a tax advisor or auditor. The grants are to be disbursed at Länder level via the platform for bridging assistance.
Own-account workers applying for no more than €5,000 do not have to consult the services of an auditing third party. Provided that specific identification requirements are met, they are eligible to file the application themselves.