The fifth application round of cost support covers the costs for companies that have suffered from public law restrictions related to the fight against the COVID-19 pandemic. The support covers expenses incurred between 1 June and 30 September 2021. The restriction may have been directed directly at the company or its customer base.

Cost support is intended for companies that meet the following conditions:

• The company’s main sector of business as reported to the Tax Administration on 1 June 2021 is within the scope of the support. If the company’s sector of business is not covered by the support but other conditions of the support are met, the support may be granted on a discretionary basis, if the company or its customer base has been subject to a restriction under public law in the fight against the coronavirus pandemic. See sectors covered by the support >
• The company’s turnover has decreased by more than 30% compared to the reference period.
• The company has salary and fixed expenses that are difficult to adjust.

In addition to companies, foundations and associations with business can apply for support. The size or form of the companies is not limited. However, the company must have a Business ID.

The fifth application round for cost support is from 21 December to 18 February 2022.

The application must be submitted to the State Treasury no later than 18 February 2022 at 4.15 p.m. Please note that this also applies to paper applications, which must be received by the State Treasury on the last application day at 4.15 p.m. A same-day stamp is not enough.

The fifth round of cost support is aimed especially at the accommodation, restaurant, and event sectors. Sectors that are directly eligible for cost support are listed in the Government Decree. See sectors covered by the support >

However, support may also be granted on a discretionary basis to companies outside the list of sectors, subject to a restriction related to the management of the pandemic under public law. Restriction may include, for example, a restriction on opening hours. The restriction may apply either directly to the company or significantly to customer base.

It should be noted, however, that the authority’s recommendation alone is not sufficient to justify granting support for companies outside the sector. For example, the recommendation for teleworking is not grounds for paying support to a company outside the sector.

The support can be applied for via the State Treasury’s e-services. The e-service guides you in filling in the application. You can also save the application as a draft and continue filling it out later.

You can use the application form to provide all the information needed. In addition, the State Treasury automatically receives information from other authorities, such as the Tax Administration and the Income Register, in order to grant support.

You will receive a case number and a notification in your email upon successful registration. You do not need to contact the State Treasury before or after sending in the application. The State Treasury will request additional information if necessary.

Inquiries do not speed up the processing of the application. The estimated processing time will be updated on the State Treasury’s website.

Comparison periods refer to the periods which are compared, and the comparison defines the decrease in the company’s turnover between the normal period and the pandemic period. The granting of cost support requires a drop in turnover of more than 30%.

The change in the company’s turnover is calculated by comparing the turnovers of the comparison periods. The comparison takes into account both sales subject to value added tax (VAT), which are reported on VAT declarations, and sales free of VAT.

Comparison periods are based on the company’s VAT tax period. A VAT tax period is the period for which a company reports and pays VAT. Comparison periods are determined as follows:

• The company’s VAT tax period is one month and the company was established before 1 June 2019: the comparison periods are 1 June to 30 September 2019 and from 1 June to 30 September 2021.
• The company’s VAT tax period is quarterly and the company was established before 1 July 2019: the comparison periods are 1 July to 30 September 2019 and from 1 July to 30 September 2021.
• The company’s VAT tax period is one year and the company was established before 1 January 2019: the comparison periods are the years 2019 and 2021.
• The company was established on or after the first day of the first reference period (monthly declarant 1 June 2019, quarterly declarant 1 July 2019 and annual declarant on or after 1 January 2019) or the company’s VAT tax period has changed: the comparison periods are 1 January to 29 February 2020 and from 1 January to 28 February 2021.
• The company has not had a VAT-tax sale : the comparison periods are 1 June to 30 September 2019 and from 1 June to 30 September 2021.

New companies

If the company was established in March 2020 or later, it is not possible to define reference period for the company. Therefore, no cost support can be granted to the company.

The amount of the cost support and closure compensation depends on the other expenses during the support period as reported by the company on the application.

Other expenses include the inflexible costs reported by the company in its application, and business costs during the support period.

Inflexible expenses refer to costs that cannot be adjusted in a manner that is equivalent to the volume of operations. The company must therefore bear these costs even if the company has no sales at all, and it is not possible to adjust the inflexible costs accordingly, unlike, for example, expenditure on materials and articles or new investments.

Expenses may also include prepayments made by the company that have proved to be final. Expenses do not include, for example, expenditure on materials and articles, new investments and wage costs that can be reduced.

Examples of inflexible expenses:

• Rental expenses related to the company’s property/premises (such as facility and property rent) and maintenance charges
• Electricity, water, gas,
• Waste management
• Security, facility surveillance or security systems
• Hosting, property maintenance and cleaning
• Property taxes
• Vehicle taxes on means of transport used in business
• Equipment and software rentals (including leasing fees)
• Concessions and license fees
• Long-term marketing contract fees
• Financial management, accounting and auditing
• Group management fee
• Permits and other official fees
• Dues
• Phone subscriptions
• Telecommunication
• Premiums for statutory and other essential insurance policies
• Loan interest on owner-occupied property and fixed assets acquired for business purposes

The necessary temporary agency workers’ expenses can also be reimbursed. These include expenses that correspond to the actions performed by your own staff, which are necessary to maintain business. This also applies to the costs of maintaining the assets used in the business.

Statutory and other necessary insurances are, for example, insurances related to real estate or vehicles used in business. They must be specified in the additional information section of the application, together with the amounts. Pension and health insurance contributions are taken into account on the application, in the section on wage expenses and YEL insurance. They should therefore not be indicated in the application’s expense table.

Costs that are flexible to some extent can also be reimbursed. In this case, compensation may be paid only for an amount which has not been flexible due to reduced volume of activity.

The costs must be final and cover the support period 1 June 2021 -30 September 2021. After the support period, the costs to be read in favour of the applicant, for example as a discount, cannot be reimbursed. The company is obliged to provide information on actual expenditure incurred during the support period even retrospectively in order to adjust the amount of support.

Wage expenses include data on direct wages paid by the company from the Incomes Register. In addition, the employer’s incidental expenses will be accepted as a percentage of wage expenses. The employer’s incidentals include holiday and sick pay and holiday bonus, as well as the costs of social security and occupational health care.

In the case of business name entrepreneurs and company-employed persons, the wage costs are accepted as the wage income established for the self-employed person’s pension insurance. In addition, the YEL insurance contribution and the health insurance contribution are accepted according to the company’s report.

The wages and wage side costs of self-employed persons of limited liability companies can only be accepted according to the data of the Incomes Register. Separate YEL contributions are therefore not accepted.

According to the bill, support will not be granted in the following situations

1. The company has less than 2000 euros of costs for the support period
2. The turnover of the company during the support period has not decreased by more than 30% compared to the turnover of the comparison period
3. The company is a credit or financial institution or its main activity is primary production, fisheries or aquaculture. The Act on Fixed-term Cost Support does not apply to these industries.
4. The company is not registered in the prepayment register
5. The company has failed to file a tax return
6. The company has tax debt information in the tax debt register
7. Recovery proceedings has collected unpaid taxes from the company
8. The company has been declared bankrupt or is the subject of bankruptcy proceedings.
9. The company was in difficulty before the coronavirus pandemic (31 December 2019). See the definition of a company in difficulty. Exception: This does not apply to small and micro enterprises that have been in difficulty before 1.1.2020. They may be granted support if the company is not in bankruptcy or reorganization proceedings at the time the support is granted and has not received rescue or restructuring aid.

Definition of a company in difficulty in the EU Regulation:

A company in difficulty refers to a company in accordance with Article 2(18) of the General Block Exemption Regulation of the EU. According to the definition, a company is in difficulty,

a. if more than half of its share capital has disappeared as a result of accumulated losses (limited liability companies),

b. more than half of its capital as shown in the company accounts has disappeared as a result of accumulated losses (companies where at least some members have unlimited liability for the debt of the company),

c. the company is subject to collective insolvency proceedings,

d. the company 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. the company is not an SME, and for the past two years, its book debt to equity ratio has been greater than 7.5 and its EBITDA interest coverage ratio has been below 1.0.

Only section c applies to SMEs that were under 3 years of age on 31 December 2019.

The minimum amount of support is EUR 2,000. The maximum amount of support is EUR 1 million.

The other support already granted will be taken into account in the amount of the business cost support so that the total aid granted under the same temporary State aid rules of the European Commission will not exceed EUR 2,3 million.

Note! When granting cost support, the State Treasury takes into account expenses that correspond max. four times of average monthly turnover of the company during the reference period.

Cost support can be applied for even if the company has already received other direct supports to mitigate the consequences of the coronavirus pandemic. Insurance compensation for the same costs, closure compensation and event guarantee granted by the State Treasury are deducted from the cost support.

Cost support is granted under the EU’s framework support programme. All aid granted under the framework support programme is subject to a maximum amount of EUR 2,3 million per company, which must not be exceeded. The ceiling of EUR 2,3 million is calculated taking into account all aid received by an individual company and companies belonging to the same group.

The following supports are under the EU framework support programme:

• Cost support (State Treasury)
• Closure compensation (not closure compensation for medium-sized and large companies) (State Treasury)
• Event guarantee (State Treasury)
• Grant for cultural events cancelled or organised smaller than expected due to the coronavirus pandemic, as well as grants to interrupted competition series and sports federations organising series at the top division level of sport (Ministry of Education and Culture OKM)
• Support for re-employment in the food sector (KEHA Centre)
• State aid for promoting journalistic content (Traficom)
• Temporary RKI loan in the event of a business disruption (Business Finland)
• Temporary extended ELA of the Provincial Government of Åland (tillfälligt utökat likviditetsstöd)
• Development grant granted by the ELY Centres (only if, exceptionally, the aid has been granted under the framework aid scheme and not as de minimis aid)

In its application for cost support, the company must notify the State Treasury of all aid granted to the company under the framework aid scheme.