Investment in Progress
Since the beginning of the Corona crisis, a large number of measures have been taken by the Austrian government. The following is a brief overview of key measures for startups:
1. Personnel measures
a.) short-time work
Temporary reduction of normal working hours (a temporary reduction to 0% is possible, whereby a maximum of 10% is to be applied in the averaging period) in order to safeguard employment. Short-time work is possible for companies regardless of their size and industry.
In case of short-time working, the employer will only be charged for the agreed number of short-time working hours (eg in the event of a reduction to 10%, only the gross amount calculated at 10% must be paid and is subject to ancillary wage costs), while the AMS covers the rest (for gross monthly incomes up to EUR 5,370.00). The employees receive between 80 and 90% of their wage/salary irrespective of the extent of the working hours.
Before short-time work begins, the employer must endeavour to ensure that employees can use up time credits and old holidays from previous years. Finally sharpening was carried out for the event of a sick leave during short-time work, as AMS will bear the costs for working hours that are not required due to sick leave to the extent of the reduced working hours.
An AMS application can be submitted retroactively from 1.3.2020 (i.e. working time worked in the first two weeks of March can already be considered on a case-by-case basis). Details concerning the procedure can be found on the homepage of the Chamber of commerce or the Labour Market Service (mainly in German).
b.) Other personnel measures
Apart from this, other personnel measures can also be considered:
2. Measures to strengthen liquidity
a.) Measures concerning tax payments
In order to support Austrian companies in these difficult times, the Austrian Ministry of Finance provides the following measures that could be also relevant for startups:
Contributions to overcome the Corona crisis should be tax-free, while the expenses covered by this are to remain operating expenses in full (legal regulation still to be awaited).
b.) Facilities for payment of social security contributions
The Austrian Health Insurance Fund supports companies with various payment facilities (e.g. automatic deferral for partially paid or not paid contributions; instalment payments are accepted informally; no collection measures).
Guarantees for new / additional operating funds can be received from aws (companies that meet the URG criteria in the previous business year, i.e. equity ratio less than 8% and fictitious debt repayment period more than 15 years are excluded) or WKBG (only in German) under certain circumstances.
d.) Contributions from hardship funds
In cases of hardship (i.e. no longer able to cover running costs, official prohibition to enter the premises, a drop in turnover of at least 50% compared to the same month of the previous year) amongst others managing partners of a GmbH (insured under commercial social insurance) can apply for a non-repayable grant from the Chamber of Commerce. In this context, however, certain income limits must be met.
e.) Funding of IT infrastructure to create teleworking jobs
The funding program supports Viennese companies that aim to set up teleworking jobs and to create stable communication between teleworking jobs and the company location (i.e. consulting services on hardware and software equipment, IT hardware and software). Applications can be submitted under certain conditions by using the online form (retroactive from 1.3.2020).
3. Rent reduction possible?
Companies that have to close down their operations due to coronavirus restrictions and therefore cannot use the rented space should check on a case-by-case basis whether a rent reduction is possible (as the legal regulations are sometimes not mandatory and can be contractually amended). In this context a lawyer should be consulted immediately.
Taking these aspects into consideration, certain measures are already available to startups. Apart from this, Economics Minister Margarete Schramböck assured that she will evaluate special measures for startups as soon as the first broad-based measures for SMEs, EPUs and large companies are put on track. The further development remains to be seen
As the framework conditions of the Corona aid package are still partly in preparation (e.g. use of the funds of the increased aid package, coordination between social partners), changes may still occur. Up-to-date information and new legislative proposals or further information on the aid measures can be found at: https://www.ecovis.com/at/.
Christoph Puchner, Managing Director and Tax Advisor & David Gloser, Partner, Chartered Accountant and Tax Advisor from ECOVIS Austria.