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CORONA UPDATE

CORONA - UPDATE

Our office premises are currently closed to protect our staff and clients. Using fully digital workflows and technology and home-office facilities, we continue working for our clients without interruption.  

Please feel free - as usual - to reach out to your respective contact person, ideally per E-mail or call to our mobile numbers. We will respond to general E-mail enquiries sent to interaudit@moore.at imminently.


FLORIAN EDER

Partner
T +43 664 546 7997
E florian.eder@moore.at
FIRST AID - MEASURES
(AS AT 18.03.2020) 

Measures to secure liquidity
  • Deferral of all taxes due, reduction of quarterly (corporate) income tax prepayments
  • Deferral of social security contributions
  • Simplified application for reduced staff working hours (to be reduced down to zero hours)
  • Simplified public guarantees for new loan applications to secure liquidity 

COVID-19 ACT

On 15.03.2020 (Sunday) the Austrian Parliament enacted the Federal Law on Establishment of the COVID-19-Emergency Fund (COVID-19-FondsG), which governs the - yet to be established - COVID-19 Emergency Fund.

According to current plans, the Austrian government earmarked the amount EUR 4 billion to establish:

  • Measures to secure and stabilize healthcare
  • Measures to reactivate the Labor Market (in particular reduced working hours ("Kurzarbeit") in accordance with section 13 para 1 Labor Market Financing Policy Act (AMPFG))
  • Measures to maintain public order and security
  • Measures relating to policies governing educational institutions
  • Measures to mitigate crisis-related losses of income;
  • Measures related to the Act on Epidemics 1950 
  • Measures to stimulate the economy 

Actual terms and conditions relating to the Fund have not been finalized; business-related measures, as published as of today, are summarized below. 

DEFERRAL OF TAX PAYMENTS

With no direct relation to the COVID-19 Act, Austrian tax authorities allow for simplified measures to reduce tax prepayments due and/or defer tax payments as they fall due. 

(Corporate) income tax prepayments made for the first quarter of 2020 (due on 15.02.2020) subsequently reduced to EUR 0.00 will be credited back and may be reclaimed/repaid. 

To apply, the following standard form (in German: Standardformular) should be used.

LOAN GUARANTEES

To address Corona-related financing issues, AWS as Austrian public funding agency provides simplified loan guarantees (German: Blanko-Kreditbesicherungen

Requirements
  • SME - less than 250 employees (subsidies for companies with > 250 employees are currently under negotiation)
  • Businesses other than those operating in hospitality and tourism (separate programs are available) 
  • No reorganization requirement in accordance with Austrian Company Reorganisation Act (URG; equity ratio < 8% AND deemed repayment term of liabilities > 15 years)
  • the last financial statement closing date cannot be earlier than 9 months from application date 
This measure is designated to support the application for working capital loans and new loans to extend and refinance existing credit facility for "healthy" companies, which may face liquidity constraints due to the "Corona-Crisis", or which require Addition funding to maintain operations. 
  • Guarantees for up to 80 % of loans amounting up to EUR 2,5 Mio per company (or group of companies)
  • Guarantee term of up to 5 years
  • Guarantee fee: starting from 0,3 % p.a. (risk-based); waived if permissible under EU competition law 
  • No other loan guarantees required (no requirement for proprietors/shareholders to enter into personal loan guarantees)

How to apply

  • Requesting (abstract) credit approval from designated bank of up to 2.5 MEUR
  • Bank confirms that conditions for issuance of guarantee are met (ratios), issuance of internal credit rating
  • Submission to AWS; approval of application
  • Issuance of loan

SOCIAL SECURITY

ÖGK (Austrian public health care provider) is currently granting payment deferrals for social security contributions as they fall due.

This entails the following measures as at 16.03.2020:

  • No dunning of overdue amounts
  • Automatic deferral of open amounts due to underpayments/omission of payments
  • Auto-approval of applications to pay past due amounts in installments
  • ÖGK will not start collection proceedings 
  • ÖGK will not force companies into insolvency proceedings

ÖGK requests companies to timely register new employees. Late registration due to Corona will not be fined. Monthly reports to ÖGK will still ned to be submitted on a timely basis. 

These measures may be applied for, using regular means of communication (German link: normale Behördenkommunikation). Currently, there is no standard form or simplified application process available.

LABOR LAW -
REDUCED WORKING HOURS

The concept of reduced working hours ("Kurzarbeit") foresees the  temporary reduction of normal working hours and, consequently, corresponding wages/salaries due to economic challenges. The purpose is the temporary reduction of personnel costs while maintaining and securing employment contracts. Employees will therefore no longer be (fully) paid by their employers. Employees will be compensated for financial losses by means of public funding similar to unemployment benefits, whereby compensation is available to match up to 90% of prior net salaries. This measure does not affect the existence and continuation of employment contracts.

Requirements
  • Maximum term: 3 months (currently)
  • Minimum remaining work time: 10%  (on average; temporary reduction to 0% possible)
  • Existing leave and overtime balances to be consumed before eligibility for public funding (FULL payment of salaries)
  • Individual/collective agreement to be signed according to  the following sample documents: Muster: Einzelvereinbarung, . Sozialpartnervereinbarung

Application process
  • Establish individual/collective agreements  
  • Apply with the Austrian Employment Agency (AMS) using the Corona application form 
  • Proof of economical challenges due to Corona 
  • Submit application documents (online / per E-mail 
  • Approval within 48 hours

OUTLOOK - OTHER TOPICS

Currently, a number of topics are under public discussion which have not been finalized, or which relate to topics that SHOULD NOT BE PURSUED WITHOUT PRIOR COMPREHENSIVE LEGAL ADVICE:

  • Waiver of rental payment obligations due to impossibility to use the corresponding rental objects; contributors argue that the Austrian legal framework permits the unilateral and inconsequential discontinuation of rental payments.  It is currently impossible to assess potential consequences to rental agreements as such, and other legal consequences. 
  • Cease of employer responsibilities under employment contracts; contributors maintain that employers are not required to pay wages/salaries under employment contracts if employees are - even due to force majeure - unable to work as required by the respective employment contracts. We refer to the above: It is currently impossible to assess potential consequences to employment contracts as such, and other legal consequences. 
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