In case sales drop at least 40 % in the months January 2022 to March 2022 the loss compensation III can be applied for. The loss compensation III follows the already well-known aid programs loss compensation II and the initial loss compensation.
In order avoiding any confusion, please find below a break-down of the loss compensation programs up to now:
The requirements for application have only been slightly amended compared to the loss compensation II program. In the following, we inform you about the most important regulations and changes to the requirements laid down in the Regulation Loss Compensation III of the Ministry of Finance.
Only beneficiary companies are eligible to apply. These are operating companies in Austria generating operating income (“betriebliche Einkünfte”).
The beneficiary companies must comply with the principles of tax conduct. These are violated in case of abuse according to Sec 22 Fiscal Code, deduction prohibitions for intra-group reduced taxation (“konzerninterne Niedrigbesteuerung”), additional taxation (“Hinzurechnungsbesteuerung”) and method change (“Methodenwechsel”) as well as predominant passive income in non-cooperative countries and certain fiscal penalties. Furthermore, not eligible are companies in insolvency, companies in economic difficulties with the well-known exceptions for small enterprises or limited to the amount according to the De Minimis rules. Moreover, entities of the financial sector, institutions under public law, non-profit organizations, and companies with more than 250 employees in case of dismissals of more than 3 % of employees instead of short-time work are excluded, too.
Not entitled are companies that have not generated any sales before 1 November 2021. However, the application is possible for companies, which have already existed before 1 November 2021 in case they are carried on by means of universal succession. This preferential treatment is also granted in case of individual succession under certain conditions.
Precondition is a drop in sales of at least 40 %. Each month between January 2022 and March 2022 is considered as observation period. The drop in sales is calculated as the difference in sales in goods and service in the respective observation period compared to the corresponding months of 2019. Applications can be submitted for a maximum of three observation periods. The chosen observation periods must be consecutive. A gap is not permitted. It is not required that each observation period shows a drop in sales of 40 %. Decisive is the decline in sales on average concerning the chosen observation periods.
Newly founded companies with sales before 1 November 2021 may determine the loss of sales on basis of a plausible planning calculation due to the lack of comparative sales in 2019.
The procedure for calculating the loss has not changed. In general, the principles of double entry- bookkeeping appropriate to the period are to be applied. However, the calculation might also be based on cash expense accounting, provided that there are no arbitrary shifts.
It is essential that the application for the default bonus III (Ausfallsbonus III) is filed before the application for loss compensation III, as the default bonus has a loss-reducing effect. The replacement rate in general amounts to 70 % of losses incurred. Only small companies are entitled to a replacement rate of 90 %. Loss compensations below EUR 500,00 are not paid out.
The maximum amount for all loss compensations programs together has been increased from EUR 10 mio to EUR 12 mio.
There are two tranches which can applied for within the following periods:
Please note that an application within the framework of the first tranche is not mandatory. The entire loss compensation III can also be applied for by means of a single application in the second tranche.
The application can only be filed by tax advisors, auditors, or accountants via FinanzOnline.
There is the obligation to adjust withdrawals and profit distributions in the period from 1 January 2022 to 30 June 2022 to the economic conditions of the business. In particular, distributions of dividends or other legally non-mandatory profit distributions as well as the repurchase of shares in the period between 1 January 2022 and 30 June 2022 are not allowed. After that, until 31 December 2022 a moderate dividend and profit payment policy is required.
In addition, there is the obligation that the remuneration of the owner, the bodies and employees of the applicant has to be appropriate. No bonus payments to board members and managing directors of more than 50 % of the bonus payments in the year 2019 are permitted between 23 December 2021 to 31 December 2022.
Attention should be paid to the fact that new sanctions in connection with non-compliance with corona measures were introduced. The applicant has to confirm that there are neither legally binding penalties due to violations of Sec 8 para 8 of the COVID-19 Measures Act (compliance with entry controls) nor repeated failures to carry out entry controls. In case of misconduct the applicant has to inform the COFAG and repay the subsidy.
With the further extension of the loss compensation program by loss compensation III for the months January 2022 to March 2022 companies still suffering from a high drop in sales are supported with financial subsidies. On the one hand, loss compensation III has stricter requirements as new sanctions were introduced. On the other hand, we see alleviations as the threshold concerning the drop in sales was lowered to 40 %. Attention should be paid to the priority of default bonus III.
Mag. Sieglinde Moser ist Steuerberaterin und Wirtschaftsprüferin und seit 2020 Partner bei Deloitte in Wien. Sie verfügt über langjährige Expertise in der steuerlichen Beratung von Unternehmen unterschiedlicher Branchen und Größe. Ihr Fokus liegt auf der umfassenden Betreuung von Klein- und Mittelbetrieben sowie freier Berufe zu sämtlichen steuerlichen-, Buchhaltungs- und Personalverrechnungsthemen. Sieglinde Moser ist zudem zertifizierte Expertin für Verfahrensrecht und Autorin mehrerer Fachpublikationen.