<small>Corona Crisis: </small><br/>Corona Aid Update – Our Summary

Beware of Phishing Emails

We have increasingly noted in the media that the repayment and application processes for Corona aid programmes are accompanied above all by digital fraud attempts. Please check the senders of supposedly official emails, verify the email address, and contact us if in doubt. With regard to the settlement of the emergency aid in North Rhine-Westphalia, the state government administration has confirmed that all emails on this matter will be sent from the address: noreply@soforthilfe-corona.nrw.de. For other federal states and other programmes, no information is currently available to us. The communication for all Corona programmes that we apply for on your behalf is digitally encrypted, carries certified senders and recipients, and partially takes place via dedicated applications provided by the federal government.

Update on the Reporting Deadlines for the Already Disbursed NRW Emergency Aid 2020 (application deadline was 31 May 2020 = already expired)

The grant amounted to: EUR 9,000 one-off payment for three months for up to 5 employees and EUR 15,000 one-off payment for three months for up to 10 employees.

The reporting deadline was initially extended to 30 November 2020, with any repayments to be made by 31 March 2021. Currently, the reporting deadline is likely to be further delayed (cf. the following link):

“Due to the current situation, the resumption of reporting for the NRW Emergency Aid 2020 will be delayed somewhat further. This will largely be in the interest of the recipients. The settlement is now to take place in spring 2021, with time until autumn 2021 for any possible repayment. However, many emergency aid recipients have also expressed the wish to settle soon, in order to be able to record the repayment and claim it for tax purposes within this year.”

https://www.wirtschaft.nrw/nrw-soforthilfe-2020-rueckmeldeverfahren

At the end of November, all emergency aid recipients should therefore receive an email from the address noreply@soforthilfe-corona.nrw.de, giving them the option to settle within the current year and, if applicable, repay any funds received in excess. Anyone choosing this option will, with one click, gain access to the so-called calculation aid and the reporting form. Everyone else does not need to take any further action for the time being. Until receipt of this email, recipients are asked to be patient. Until the start of the reporting procedure, refunds to the granting authorities or to the state treasury should be avoided. Please check whether you receive a corresponding email at the end of November, as we as Steuerberater (German Certified Tax Advisor) had no influence on these applications, since taxpayers had to submit them themselves. Accordingly, you will of course also have to submit the reporting yourself. Should any questions arise, please feel free to contact us.

November Aid: Applications can foreseeably be submitted from 25 November 2020

Eligibility

• All companies (including public ones), businesses, self-employed persons, associations, and institutions that had to cease business operations on the basis of the closure ordinances issued by the federal states following the resolution of the Federal Chancellor and the heads of state government of 28 October 2020 (directly affected companies).
• All companies that demonstrably and regularly generate 80 percent of their revenue with companies directly affected by the above-mentioned measures (indirectly affected companies).
• Companies that regularly generate 80 percent of their revenue through deliveries and services on behalf of companies directly affected by the measures via third parties (for example event agencies) are also eligible to apply. These companies must prove beyond doubt that, due to the closure ordinances based on items 5 and 6 of the aforementioned resolution of 28 October 2020, they suffer a revenue drop of more than 80 percent in November 2020.
• Affiliated companies, if more than 80 percent of the group-wide total revenue is attributable to directly or indirectly affected affiliated companies. 75 percent of the revenue of the affected affiliated companies will be reimbursed.
• Accommodation establishments and event venues are regarded as directly affected companies.

Funding

The November Aid provides grants amounting to 75 percent of the corresponding revenue in November 2019, prorated on a daily basis for the duration of the Corona-related lockdown.

As an alternative, solo self-employed persons may use the average monthly revenue in 2019 as a reference. For eligible applicants who commenced business activities after 31 October 2019, the reference revenue may be either the monthly revenue in October 2020 or the average monthly revenue since founding.

The state aid framework results from the funding level:

• Aid up to EUR 1 million (based on the De Minimis Regulation and the Small Aid Scheme)
• Aid up to EUR 4 million (based on the Federal Fixed Cost Aid Regulation and the aforementioned November Aid)
• Aid above EUR 4 million (subject to notification to the EU Commission on the basis of Art. 107 Abs. 2 b TFEU).

Offsetting of Benefits Received

Other state benefits paid for the November 2020 funding period will be offset. This applies in particular to benefits such as Bridging Aid or short-time work allowance.

Offsetting Delivery Services / Take-Away Sales

If revenue is generated in November despite the general closure, this revenue will not be offset up to an amount of 25 percent of the reference revenue. To avoid overfunding of more than 100 percent of the reference revenue, revenue exceeding this threshold will be offset accordingly. For restaurants, the revenue reimbursement is limited to 75 percent of the revenue in the 2019 reference period at the full VAT rate. Take-away revenue at the reduced VAT rate is thereby excluded. In return, take-away revenue during the closures is exempt from being offset, in order to encourage expansion of this business.

Example: A pizzeria had EUR 8,000 in revenue from in-restaurant consumption and EUR 2,000 in revenue from take-away in November 2019. It therefore receives EUR 6,000 in November Aid (75 percent of EUR 8,000), i.e. initially somewhat less than other sectors (75 percent of the reference revenue). In return, the pizzeria can generate significantly more than the generally permissible EUR 2,500 (25 percent of EUR 10,000) in delivery service revenue in November 2020 without a reduction in funding.

Application Process

Applications can foreseeably be submitted from 25 November 2020 via the nationwide IT platform of the Bridging Aid (antragslogin.ueberbrueckungshilfe-unternehmen.de). The electronic application must be submitted by a Steuerberater, Wirtschaftsprüfer (German Statutory Auditor), sworn auditor, or Rechtsanwalt (German Attorney-at-Law).

Solo self-employed persons are directly eligible to apply, subject to special identification requirements, up to a maximum funding amount of EUR 5,000, provided they have not yet submitted an application for Bridging Aid. As a prerequisite, they require an ELSTER certificate.

Information on creating a user account for ELSTER and on the certificate file can be found on the ELSTER portal. Solo self-employed persons receive the applied-for funding directly in full.

The November Aid application is submitted independently of the Bridging Aid.

Advance Payment

From the end of November, advance payments will be granted to companies. The advance payment procedure includes the following points:

• Companies receive an advance amounting to up to 50 percent of their applied-for sum (max. EUR 10,000).
• The application for companies is submitted by an examining third party.
• The application and disbursement are fully electronic via the platform www.ueberbrueckungshilfe-unternehmen.de.
• Applications open in the last week of November 2020 (foreseeably 25 November 2020).
• The first disbursements of advance payments will be made from the end of November 2020.
• The procedure for the regular disbursement of the November Aid is being prepared and finalised in parallel, so that it can commence immediately following the advance payments.

Amendment Applications for Bridging Aid I (May to August 2020, application deadline = 9 October 2020 = already expired)

Amendment applications can still be submitted until 30 November 2020. The original deadline of 30 October 2020 has been extended again. Notes in case of amendment requirements in an already submitted application of Phase 1:

• In the case of an application that has been submitted but not yet decided upon, it is possible to withdraw the application in the electronic application procedure. The application must then be re-submitted within the above-mentioned application deadline.
• In the case of an application that has already been decided upon or partially decided upon, it is possible in all federal states (with the exception of Baden-Württemberg) to submit a reasoned amendment application via the electronic application procedure. In this way it is possible, for example, to add additional eligible costs or other information that is likely to lead to an increase in the funding amount. The amendment application must be submitted by 30 November 2020 at the latest. The original deadline of 30 October 2020 was extended again by the BMWi. (cf. FAQ catalogue on Bridging Aid I, question 3.13)
• A subsequent payment in the course of the final settlement will not be possible. Changes that do not lead to an increase in the funding amount do not require an amendment application. The actually incurred fixed costs and the actually incurred revenue decline will be confirmed in the final settlement. Consequently, no amendment application can be submitted for such adjustments. Further information on this can also be found in a short guide from the BMWi.

Bridging Aid Phase II (September to December 2020)

= Grant towards operating fixed costs – with certain improvements regarding the eligibility criteria.

Can currently be applied for; the original application deadline of 31 December 2020 has now been extended to 31 January 2021.

Please note that we should submit the applications, where possible, when the thresholds for revenue decline are met. Since the application deadline has been extended to 31 January 2021, applications should be submitted as late as possible so that the bookkeeping can be as up-to-date and timely as possible, in order not to have to make corrections retrospectively. Please discuss this with your Steuerberater / accounting staff member.

Eligibility

Companies with revenue declines

• of at least 50% in two consecutive months in the period April to August 2020 compared to the respective prior-year months, or
• of at least 30% on average across the months April to August 2020 compared to the corresponding prior-year period.

Reimbursement

(maximum EUR 50,000 per month) Grant towards monthly operating fixed costs has been increased (compared to Bridging Aid I):

• 90% (previously 80%) of fixed costs in the case of a revenue decline of more than 70%;
• 60% (previously 50%) of fixed costs in the case of a revenue decline between 50% and 70%; and
• 40% of fixed costs in the case of a revenue decline of more than 30% (previously more than 40% compared to the prior-year month).

The personnel cost flat rate has been increased to 20%. Finally, in the final settlement, not only refunds but also subsequent payments are to be possible in future.

Bridging Aid Phase III (January to June 2021)

According to information provided, with further improvements, e.g. EUR 200,000 per month instead of the previous EUR 50,000 per month (information is to follow)!

Newly Introduced: Restart Aid for Solo Self-Employed Persons

A one-off operating cost flat rate of up to 25% of revenue in the reference period (maximum EUR 5,000) for solo self-employed persons who otherwise cannot claim any fixed costs under Bridging Aid III, and who generated at least 51% of their income in the reference period (generally = 2019) from their self-employed activity.

This Restart Aid covers the period until June 2021 and is to be a one-off maximum of EUR 5,000. It is intended to be an unbureaucratic and rapid grant which – provided of course the application requirements are met – will not have to be repaid.

To determine the 2019 reference period, the average monthly revenue of 2019 is used as the basis (= reference monthly revenue). The reference revenue is seven times this reference monthly revenue – so much for “unbureaucratic”.

Offsetting of the Restart Aid against social benefits: Due to its designated purpose, the Restart Aid is not to be offset against basic social security benefits and similar benefits.

Form of Disbursement

The Restart Aid is to be paid out as an advance, even if the specific revenue losses during the term December 2020 to June 2021 have not yet been determined at the time of application.

Should revenue during the term, contrary to what was initially expected, be above 50 percent of the seven-month reference revenue, the advance payments must be repaid pro rata. With revenue of 50 to 70 percent, one-quarter of the Restart Aid is to be repaid, with revenue between 70 and 80 percent one half, and with revenue between 80 and 90 percent three-quarters. If the revenue achieved is above 90 percent, the Restart Aid must be repaid in full. If the repayment calculated in this way is below a de minimis amount of EUR 500, no repayment is required. After the funding period has expired, beneficiaries must prepare a final settlement by self-assessment. As part of this self-assessment, any income from dependent employment must be added to the revenue from self-employed activity. Any repayments due must be reported to the granting authority and transferred without prompting by 31 December 2021. To combat subsidy fraud, audits will be carried out. Time of application

Bridging Aid III, which will include the Restart Aid, is to apply from 1 January 2021. Due to the necessary technical programming and the coordination with the federal states and the EU Commission, applications can be submitted a few weeks after the start of the programme in the new year. The details on the application process are likely to be finalised in the coming weeks.

Conclusion

We hope that we have been able to provide you with an up-to-date overview.

It is no longer easy to keep track of everything, which is why we have tried to list only the most important points.

We currently receive new information and deadlines several times a day, so that the kind of forward-looking, carefully planned advice we are accustomed to providing – and which is important to us – is currently scarcely possible.

We are trying to do the best we can for you in light of the current circumstances, which are challenging and demanding for us all. In doing so, we kindly ask you to bear in mind that the situation is new for all of us and that we in all departments are currently reaching the limits of our capacity to a much greater extent than in normal times.

A heartfelt thank you at this point for your trust, and we wish you all as good a time as possible and plenty of perseverance. With best regards Your “Steffen & Partner”

PDF Download

Summary of the Corona Aid as PDF (as of 23 November 2020)Download

Legal Notice

All information provided to the best of our knowledge, but without any warranty. The author assumes no liability for the topicality, correctness, completeness, or quality of the information provided. This information does not replace individual advice. Legal status: 23 November 2020