ATTENTION: Suspected fraud! NRW halts payment of coronavirus emergency aid
17 April 2020: Applications for coronavirus emergency aid in NRW are online again! Please remain vigilant when submitting your application and ensure that you only file it via the state government's website, https://soforthilfe-corona.nrw.de. The risk of fraud for applicants does not yet appear to have been fully averted. The State Office of Criminal Investigation continues to monitor and pursue fraud attempts involving coronavirus emergency aid.
Further information can be found in the state government's press release at:
04 April 2020: The State of NRW had initially halted the payment of coronavirus emergency aid for solo self-employed individuals and micro-enterprises.
The Ministry of Economic Affairs announced that there had been numerous indications of fake websites and that a criminal complaint for fraud had been filed. The stoppage was ordered in coordination with the State Office of Criminal Investigation.
The latter had determined that the operators of the fake websites — which ranked highly in internet search results — used forged application forms to collect data, which was presumably exploited for criminal purposes.
The state subsequently instructed the district governments to suspend further disbursement of funds. The investigation team will now continue its inquiries in order to identify fraudulent applications.
Of course, small businesses and self-employed individuals can still apply for the emergency aid.
But please note: applications must be submitted exclusively via the official website — https://soforthilfe-corona.nrw.de. The Ministry intends to provide timely updates on further developments.
Applicants awaiting their transfer have been asked for patience.
Federal government emergency aid: Applications possible until 31 May 2020 at the latest!
The application form has been available online since Friday, 27 March 2020 (electronic form) for companies based in NRW here:
https://www.wirtschaft.nrw/nrw-soforthilfe-2020
The federal government's "Coronavirus Emergency Aid for Micro-Enterprises and Solo Self-Employed Individuals" has become more concrete: financial emergency aid (taxable grants) for micro-enterprises from all economic sectors, as well as solo self-employed individuals and members of the liberal professions with up to 10 employees, will be made available.
– EUR 9,000 one-off payment for 3 months for up to 5 employees (full-time equivalents)
– EUR 15,000 one-off payment for 3 months for up to 10 employees
(full-time equivalents)
PDF explanation of the federal government's coronavirus emergency aidDownload
NRW supplements aid for companies with ten to 50 employees
NRW emergency aid available since Friday, 27 March 2020!
The NRW state government is supplementing the federal funding and is supporting companies with ten to 50 employees with direct grants of EUR 25,000.
The application form has been available since Friday, 27 March 2020 (electronic form) here:
https://www.wirtschaft.nrw/nrw-soforthilfe-2020
The press release can be found here: https://www.wirtschaft.nrw/pressemitteilung/soforthilfen-fuer-kleine-unternehmen-nrw-ergaenzt-zuschuesse-des-bundes-um
Frequently asked question: How are employees counted?
Employees are counted as full-time equivalents (FTE).
The reference date for calculating the number of employees is 31 December 2019. For converting part-time employees and mini-jobbers (EUR 450 basis) into full-time employees:
Employees up to 20 hours = factor 0.5
Employees up to 30 hours = factor 0.75
Employees over 30 hours & trainees = factor 1
Employees on a EUR 450 basis = factor 0.3
The entrepreneur themselves must be counted.
Also included are employees receiving parental allowance or who are on maternity leave.
An employee is anyone who had a current employment contract with the company as of 31 December 2019.
What conditions must be met for the aid to be disbursed?
The entrepreneur or company must have significant financing bottlenecks and economic difficulties as a result of the coronavirus. This is presumed if
- more than half of the orders from the period before 1 March have been lost due to the coronavirus crisis
or
- revenues have more than halved compared to the same month of the previous year (for an application filed in March or April, revenues for March 2020 will be compared with March 2019. Where the same month of the previous year cannot be used (e.g. for start-ups), the preceding month applies).
or
- the ability to generate revenue has been massively restricted by an official order in connection with the COVID-19 pandemic
or
- the available funds are insufficient to pay the company's short-term liabilities (e.g. rent, loans for business premises, leasing instalments) (= financing bottleneck)
The applicant must affirm that the financing bottleneck did not already exist before 1 March.
AND:
The applicant must additionally declare that the company was not an "undertaking in difficulty" as of the reference date 31 December 2019. Further information is provided below.
What constitutes an "undertaking in difficulty" in this context?
A small or medium-sized enterprise is in difficulty as of 31 December 2019 if at least one of the following conditions is met:
-
In the case of limited liability companies (e.g. GmbH, UG) that commenced business operations before 31 December 2016: more than half of the subscribed share capital (including all share premiums) has been lost as a result of accumulated losses. This is the case where deducting accumulated losses from reserves (and all other elements generally considered part of the company's own funds) results in a negative cumulative amount exceeding half of the subscribed share capital.
-
In the case of companies in which at least some shareholders have unlimited liability for the debts of the company (e.g. KG, OHG) that commenced business operations before 31 December 2016: more than half of the own funds shown in the accounts has been lost as a result of accumulated losses.
-
The company is subject to insolvency proceedings or meets the conditions under German law for being placed in insolvency proceedings at the request of its creditors. Grounds for opening insolvency proceedings at the request of a creditor exist where the company is insolvent or over-indebted.
-
The company has received rescue aid and the loan has not yet been repaid or the guarantee has not yet been terminated, or the company has received restructuring aid and is still subject to a restructuring plan.
Thus, if one of these conditions applies to your company as of 31 December 2019, your company is deemed to be "in difficulty" and the grant may not be applied for!
Below is the relevant excerpt from the application together with Art. 2 para. 18 of Regulation (EU) No 651/2014
I declare that, as of the reference date 31 December 2019, my company was not an undertaking in difficulty within the meaning of
Art. 2 para. 18 of the General Block Exemption Regulation (Regulation (EU) No 651/2014) (see No. 1.1).
- "Undertaking in difficulty": an undertaking to which at least one of the following circumstances applies:
a)
In the case of a limited liability company (other than an SME that has been in existence for less than three years or, for the purposes of eligibility for risk finance aid, an SME within 7 years from its first commercial sale that qualifies for risk finance investments following due diligence by the selected financial intermediary): where more than half of its subscribed share capital has disappeared as a result of accumulated losses. This is the case when deduction of accumulated losses from reserves (and all other elements generally considered as part of the own funds of the company) leads to a negative cumulative amount that exceeds half of the subscribed share capital. For the purposes of this provision, "limited liability company" refers in particular to the types of company mentioned in Annex I of Directive 2013/34/EU (37) and "share capital" includes, where relevant, any share premium.
b)
In the case of a company where at least some members have unlimited liability for the debts of the company (other than an SME that has been in existence for less than three years or, for the purposes of eligibility for risk finance aid, an SME within 7 years from its first commercial sale that qualifies for risk finance investments following due diligence by the selected financial intermediary): where more than half of its capital as shown in the company accounts has disappeared as a result of accumulated losses. For the purposes of this provision, "a company where at least some members have unlimited liability for the debts of the company" refers in particular to the types of company mentioned in Annex II of Directive 2013/34/EU.
c)
Where the undertaking is subject to collective insolvency proceedings or fulfils the criteria under its domestic law for being placed in collective insolvency proceedings at the request of its creditors.
d)
Where the undertaking has received rescue aid and has not yet reimbursed the loan or terminated the guarantee, or has received restructuring aid and is still subject to a restructuring plan.
e)
In the case of an undertaking that is not an SME: where, for the past two years, 1. the undertaking's book debt to equity ratio has been greater than 7.5; and 2. the undertaking's EBITDA interest coverage ratio has been below 1.0.
Are students and pensioners eligible to apply?
The status of "student" or "pensioner" is irrelevant when assessing the "undertaking" eligibility requirement.
What matters is the "undertaking as applicant" or the self-employed activity. Provided that applicants were active in the market as self-employed entrepreneurs as of 31 December 2019 and are independently carrying out a commercial or professional activity within the meaning of § 2 UStG at the time of application, students and pensioners may also submit an application.
What information is required for the application?
- For identification purposes, an official identity document (identity card, passport, etc.) is required.
- In the application, the commercial register number or another register number (where applicable) and the corresponding local court must be indicated.
- The company's tax number and the tax ID of one of the owners are also requested.
- Banking information (IBAN + bank) of the company account for disbursement.
- The type of commercial or freelance activity (so-called classification of economic activities) is also requested. Further information here.
- The number of employees is requested in the application. For guidance on calculating full-time employees, see above.
Note: North Rhine-Westphalia provides funding under the federal small aid scheme. A so-called de minimis declaration is not required.
Who fills out the form?
In principle, each entrepreneur/company must fill out the application themselves.
You may, for example, ask your Steuerberater (German Certified Tax Advisor) for help/support; however, the eligible applicant must submit the application electronically themselves!
Important: The eligible applicant bears responsibility for the content of the application themselves!
Attention: Observe the application deadline!
Applications must be submitted by 30 April 2020 at the latest.
Attention — do not forget the grant in your tax return!
The grant must be taxed as part of the 2020 tax return.
Designated use and verification of use by the district government!
The emergency aid is intended exclusively to mitigate the financial hardship of the affected company in order to bridge liquidity bottlenecks that have arisen since 1 March 2020 in connection with the COVID-19 pandemic. Economic difficulties or liquidity bottlenecks that arose before 1 March 2020 are not covered.
Existing credit lines may not be offset or netted.
Only ongoing operating costs such as commercial rents and leases, loans for business premises and leasing expenses are to be covered by the grant. By contrast, costs of private living expenses such as rent for private premises, health insurance contributions, etc. may not be covered by the emergency aid!
The approved emergency aid must be used in full to compensate for the economic bottlenecks directly caused by the coronavirus pandemic.
The district governments reserve the right to audit the use of the emergency aid. In such cases, books, receipts and other business records may be inspected.
So will there be a check on whether the applicant was actually entitled to the aid?
The applicant is required to include the grant in their 2020 tax return. Since the tax number or tax ID must be included in the application, the tax office has the opportunity to subsequently verify the plausibility of the claim.
In the form, the applicant affirms that all information has been provided to the best of their knowledge and belief and truthfully. False statements constitute subsidy fraud. The benefit must then be repaid, and criminal prosecution may follow.
Proof of use of the emergency aid is provided using the form available online at
https://www.soforthilfe-corona.nrw.de
and must be enclosed with the next tax return.
The grant is paid as a so-called equitable measure and must be repaid with interest if the applicant is not entitled to it.
What amount will be paid out?
The maximum amount is always paid out, i.e. EUR 9,000 or EUR 15,000 or EUR 25,000, depending on company size.
But please note: Overcompensation must be repaid afterwards!
Overcompensation arises if the applicant receives more in benefits than their actually incurred loss — that is, in particular, the loss of revenue caused by the coronavirus crisis less any costs saved (e.g. rent reduction). Overcompensation must be repaid after the three-month funding period.
Frequently asked questions
Frequently asked questions
How much is the Corona emergency aid based on number of employees?
Solo self-employed individuals and micro-enterprises with up to 5 employees (full-time equivalents) receive a one-time payment of €9,000 for three months. For up to 10 employees, the subsidy is €15,000. NRW additionally supplements the federal funding with €25,000 for companies with 10 to 50 employees.
How are employees converted into full-time equivalents for the Corona emergency aid?
The reference date is 31 December 2019. Employees working up to 20 hours count with a factor of 0.5, up to 30 hours with 0.75, over 30 hours and apprentices with 1.0, and 450-euro workers with 0.3. The entrepreneur as well as employees on parental leave or maternity protection are included; the decisive factor is an active employment contract on the reference date.
What conditions must be met to qualify for the Corona emergency aid?
A significant financial bottleneck caused by the Corona crisis must exist. This is assumed if more than half of the orders have been lost since March 1, revenues have been more than halved compared to the same month of the previous year, official restrictions massively limit the ability to generate revenue, or the funds available are insufficient to cover short-term liabilities. The bottleneck must not have existed prior to March 1, 2020.
When is a company considered an "undertaking in difficulty" and therefore not eligible to apply?
Under Art. 2 No. 18 of Regulation (EU) No. 651/2014, this applies if, in the case of limited liability companies (e.g. GmbH, UG, founded before 31.12.2016), more than half of the share capital has been lost due to accumulated losses; if, in the case of partnerships (KG, OHG), more than half of the equity capital has been lost; if insolvency proceedings are pending or the conditions for such proceedings are met; or if rescue aid has not yet been repaid or restructuring aid is still ongoing. If any of these conditions applied as of 31.12.2019, the subsidy may not be requested.
Can students and pensioners apply for the Corona emergency aid?
Yes, status as a student or pensioner is irrelevant. What matters is that the person was active in the market as a self-employed entrepreneur on 31 December 2019 and is independently carrying out a commercial or professional activity within the meaning of § 2 UStG at the time of application.
Where must the application for NRW emergency aid be submitted to avoid fraud?
Applications may only be submitted via the official website of the NRW state government at soforthilfe-corona.nrw.de. Fraudulent websites with replicated application forms had been used to harvest data for criminal purposes, which is why payouts were temporarily suspended. Applicants should review search results critically and use only the official URL.