The Federal Government presents details of the so-called ‘Novemberhilfe’ (November aid) for companies affected by (partial) closures. These framework conditions apply to the exceptional business aid in November 2020.

Total volume
The exceptional business aid is expected to have a financial volume of around EUR 10 billion.

Eligibility to apply
Eligible to apply are companies, businesses, self-employed persons, associations and establishments that are directly affected by the temporary closures and companies indirectly affected.

Directly affected companies
All (public) companies such as businesses, self-employed persons, associations and establishments which had to cease operations on the basis of the closure ordinances issued by the regional governments and the Federal Government on 28 October 2020. Hotels count as directly affected companies.

Indirectly affected companies
All companies that demonstrably and regularly generate 80 percent of their turnover with companies directly affected by the closure measures.

Affiliated companies, i.e. companies with several subsidiaries or permanent establishments, are eligible to apply if more than 80 % of the total group turnover is accounted for by affiliated companies that are either directly or indirectly affected. Up to 75 % of the turnover of the affiliated companies affected will be reimbursed. In the case of a holding company, for example, that operates both restaurants (closed) and retail companies (still open), the emergency aid will be granted if the restaurants account for more than 80% of the holding company’s turnover.

What is the scope of the aid?
The November aid scheme provides for grants covering 75 % of the average weekly turnover recorded in November 2019 up to a cap of EUR 1 million for every week of the closure period, insofar as companies leave enough scope for support under EU State aid rules (State aid rules for small amounts of aid).

Grants issued within the framework of the November aid programme that exceed EUR 1 million require notification to and approval of the European Commission. The Federal Government is currently engaging in intense discussions with the European Commission in order to obtain the approval for larger grants.

Own-account workers are given the option to indicate their average weekly turnover for 2019 as an alternative to weekly turnover in November 2019.  For eligible applicants that started their business after 31 October 2019, reference turnover is to be determined either on the basis of average weekly turnover in October 2020 or on the basis of average weekly turnover since the date of establishment.

Crediting of other support payments
Other government payments received for the November 2020 funding period are credited.  This particularly applies to support in the form of bridging aid or short-time working allowance. However, KfW loans received are not taken into account.

Crediting of turnover achieved in the month of November
If any turnover is generated in November despite the closures, it is not credited up to a level of 25 % of reference turnover. In order to prevent over-funding in excess of 100 % of reference turnover, any turnover above this threshold is credited accordingly.

A special rule applies to restaurants offering takeaway options. In this case, turnover reimbursement covering 75 % of the turnover recorded in the 2019 reference period is limited to those items subject to the full VAT rate, i.e. meals served on site.  Thus, turnover from takeaway and delivery services, which are subject to the reduced VAT rate, is exempted. In return, any turnover from takeaway and delivery services that is generated during the closures is exempted from crediting in order to promote this form of business. Example: In November 2019, a pizzeria had a turnover of EUR 8,000 from consumption in the restaurant and EUR 2,000 from takeaway/delivery. It therefore receives EUR 6,000 in November aid (75 % of EUR 8,000), i.e. initially slightly less than other sectors (75 % of the reference turnover). On the other hand, the pizzeria will be able to generate significantly more than the generally permitted EUR 2,500 (25 % of EUR 10,000) in turnover from delivery services in November 2020 without any cuts in funding.

Application procedure
Applications can be filed in the next few weeks via the standardised nationwide IT platform for bridging aid. The electronic application must be submitted by a tax consultant or certified public auditor. Disbursement is to be made by the federal states via the platform for bridging aid.

Own-account workers (so-called “Soloselbständige”) who do not apply for funding in excess of EUR 5,000 are not required to submit their applications via an auditing third party. Provided that specific identification requirements are met, they are eligible to file the application themselves.

At as: 10 November 2020

Author: Marcus Kogel, Certified Tax Consultant, Auren

Source: Federal Ministry of Finance

Image: Adobe Stock, joda

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