COFAG-Correction Notice: In case COVID-19 subsidies were unjustly obtained

Overview

Taxpayers who have received a subsidy from the “COVID-19 Finanzierungsagentur des Bundes GmbH” (COFAG) and it turns out that there was no or only a partial entitlement as the requirements were not met in the first place, may pay back the exceeding amount and disclose this by means of the COFAG-correction notice. Around 2,000 COFAG-correction notices have already been filed with an overall volume exceeding the amount of 25 million Euros (reporting date: 25 February 2022).

In which cases should a COFAG-Correction Notice be filed?

COVID-19 subsidies are granted based on private legal agreements. The taxpayer confirms the correctness and completeness of his*her statements in course of the application. Furthermore, the taxpayer is obliged to immediately notify changes of any kind regarding the relevant requirements for the subsidy.

If a COVID-19 grant has been paid out, but the applicant was not or only partial entitled according to the relevant directive, the COFAG offers the opportunity of correcting the application and paying back the partial or full amount of the subsidy. With the COFAG-correction notice the repayment of the grant is disclosed accordingly.

What are the requirements for filing a correction notice?

• The subsidy product which was applied for (this includes Lockdown Turnover Compensation, Lockdown Turnover Compensation II, Turnover Loss Bonus, Loss Compensation, Fixed-Cost Subsidy I as well as Fixed-Cost Subsidy 800.000) has already been fully paid out by COFAG.
• Missing or discontinuation of the application eligibility (leading to a repayment of 100 %) or partial changes of the eligibility by which a correction of the amount of the subsidy is necessary (leading to a partial repayment).
• The correction amount must be paid back before the correction notice is filed:
  • Sender: Applicant or tax consultant/auditor/accountant
  • Recipient: COVID-19 Finanzierungsagentur des Bundes GmbH (COFAG)
  • Recipient account: The correction amount must be transferred back to the exact same account of which the subsidy has been received from.
  • Purpose of payment: In order to guarantee a clear and fast assignment, the sender must state the purpose of payment which was indicated when the COFAG initially granted the subsidy. Should this be unfeasible, the corresponding subsidy product and the respective tax number have to be stated under purpose of payment (eg: “Fixed_Cost_Subsidy_800_tax number”).
    
    

How does the process of filing a correction notice look like?

After paying back the correction amount the correction notice can be filed with the COFAG. In contrast to the application the correction notice cannot be reported via FinanzOnline. The correction notice needs to be filed using the following link:

• Step 1: For registration the applicant needs to sign in either by means of mobile phone signature (“Handysignatur”) or via the Austrian citizen card (“Bürgerkarte”). Alternatively, the applicant may also proceed without registering, in which case the upload of a copy of an official identification document is required.
• Step 2: Entering of master data as well as information concerning the repayment.
• Step 3: Uploading documents such as the proof of payment (obligatory) and the explanations on the correction amount (optional).
• Step 4: Summary of the entered data as well as the possibility to correct them.
• Step 5: Completion and transmission

It should be noted that for each subsidy product a separate COFAG-correction notice needs to be filed. In case of the Turnover Loss Bonus a separate correction notice has to be submitted for each month concerned. The correction notice is subsequently assigned to the repayment. As soon as this process is completed, the applicant will receive a confirmation by e-mail stating that the repayment was received. According to COFAG, this process can take some time.

What are the benefits of the correction notice?

In the worst-case scenario, unjustly paid out subsidies may lead to criminal consequences. The COFAG emphasizes that an exemption from punishment (“Tätige Reue”)is only applicable if the actual, complete damage is compensated and genuine efforts to make up for any damage were made. Thus, paying back an insufficient amount does not preclude criminal liability.

Conclusion

In order to prevent criminal consequences, the COFAG offers the opportunity to repay unjustly received COVID subsidies and to disclose them by means of a correction notice. It should be noted that a correction notice can only be filed after effectuating the repayment.