Blümel: Providing rapid assistance to all businesses affected by lockdown
 
Turnover compensation for the hospitality and hotel sectors; turnover compensation "plus" for retailers and close-contact services
 

"Rising infection rates necessitate an extension of measures and an expansion of those areas of the economy needing to close in order to protect people as well as possible, and to keep the health service functioning. At the same time, it is our continued aim to protect both Austria as an economic centre and Austrian companies, and to carry them through this crisis as well as possible, to preserve jobs and to enable confidence looking to the future. For this reason, we are expanding government assistance to those forced to close their businesses as a result of the expanded lockdown," explained Finance Minister Gernot Blümel.

Overview of available assistance

Turnover compensation for the hospitality and hotel sectors: For the period of compulsory closure, affected Austrian businesses will receive compensation in the sum of 80% of their net turnover. In order to enable this compensation to be paid as straightforwardly, unbureaucratically and swiftly as possible, it will be calculated automatically based on tax data held by the Tax Administration. Applications can be made via FinanzOnline. So far, 30,041 applications have been filed, in a total volume of over EUR 900 million. Of this, over EUR 800 million will be paid out in the next few days, and indeed, initial payments have already been made.

Turnover compensation "plus" for retailers and close-contact services: Due to differing framework conditions, as well as the parameters determining turnover and profit in the different sectors, different structures will be put in place: close-contact services, for example hairdressers, massage therapists or beauticians, will receive compensation for their period of closure in an amount of 80% of turnover, based on their November 2019 figures.

As a result of differing parameters such as profit margins, perishable goods, resale and catch-up effects, different areas of retail will be treated differently. As a general rule, 40% of turnover will be compensated. Those areas with perishable goods and goods of a highly-seasonal nature will receive proportionately higher compensation than those areas in which merchandise is subject to either no or very little value impairment and/or where catch-up effects may be anticipated. The precise lists and thresholds are currently being finalized, and the technical work related to processing is undergoing implementation.

Due to the associated complexity, a number of technical adjustments are required. Until these have been completed, at present it will provisionally not be possible to apply for turnover compensation via FinanzOnline.

Fixed cost subsidy: With regard to companies not directly affected by the measures, but which have recorded significant declines in sales as a result of coronavirus, the fixed cost subsidy is an effective form of economic assistance. A two-pillar model has been devised for phase II of the fixed cost subsidy: before the end of November, a fixed cost subsidy of up to EUR 800,000, less assistance already received, will be available. This will take account of both write-downs and frustrated expenses (e.g. in the case of travel agencies). In parallel to this, there will be a fixed cost loss option, with up to EUR 3 million for larger companies.

Both versions are being finalized. A combination of turnover compensation (for November) and fixed cost subsidy (for months other than November) is available to affected companies for different periods.

"Every company which we succeed in helping through this crisis will secure valuable jobs in Austria. The more resolutely we now act, the greater will be the prospect of enjoying Christmas and significant Christmas trade. And our outlook for the coming year can be all the better, which will be a deciding factor for us all and for Austria as a centre of economic activity," concluded Minister Blümel.