The support is intended for companies whose turnover has fallen significantly as a result of the COVID-19 pandemic and whose wages and other costs for the support period (1 November 2020 to 28 February 2021) are difficult to adjust. The aim of the cost support is to support businesses in the difficult situation caused by the COVID-19 pandemic and to reduce the number of companies going bankrupt by giving companies more time to adjust their activities and costs once the COVID-19 crisis persists.

In the third round of cost support, changes have been made to the support to allow for more flexible support, especially for sole proprietors and small businesses. Sole proprietors and small businesses have been able to apply for cost support in the past, but a large proportion of the cost support applications for the smallest companies have been rejected. The main reason for rejecting the aid application has been that the aid is below the threshold of EUR 2000.

The aid is granted on the basis of the decline in companies’ turnover and actual costs. In future, the aid will be paid at least EUR 2000, even if the company’s aid is calculated to be less than that amount. In this way, more small businesses and sole proprietors can receive support if other support conditions are met.

A company can apply for cost support if it has a business ID. It is also required that the company has eligible costs of at least EUR 2000 during the aid period and that its turnover has decreased by more than 30% compared to the reference period.

The third application round for cost support starts on 27 April at 9:00 and ends on 23 June.

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.

Apply for cost support if

• the company’s own turnover has decreased by more than 30% compared to the reference period
• the company has at least €2000 of eligible costs for the support period
• the company has a business ID
• the company is registered in the prepayment register

In addition to the company’s own turnover, the decline in the turnover of the company’s sector is estimated. If the sector’s turnover has fallen by at least 10% during the support period, the company can apply for cost support without further justification, provided that the other conditions of the support are met.

Even if the company’s main sector is not eligible under the Government Decree, cost support may be granted to it on discretionary grounds.

In addition to companies, foundations and associations can also apply for support.

In addition to companies, associations and foundations can apply for cost support. Cost support can only be granted for the financial activities of associations and foundations.

The support is granted under the EU Temporary COVID-19 Framework Program for Support (Commission Decision SA.56995). All aid granted under this framework is subject to a company specific cap of EUR 1,800 000, which may not be exceeded when the support is granted. When calculating the maximum amount of EUR 1,800 000, all support received by an individual company and of companies belonging to the same group as the one receiving grant under this frame shall be taken into account.

In the third application round for business cost support, companies that fall within the specific sectors defined by the Government Decree, and that were established on or after 1 January 2020, are eligible for support on the basis of changes in the average turnover of the sector. However, such companies are not eligible for discretionary support because they cannot demonstrate a change in their turnover.

The minimum amount of support is EUR 2,000. The maximum amount of aid is EUR 1 million, which meets the needs of large companies in particular. The maximum amount of support was EUR 500,000 in the previous application rounds.

The aid 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 1.8 million. The maximum amount of total aid was previously EUR 800,000. The new maximum amount is based on the Commission’s decision to raise the company-specific ceilings for aid.

The amount of the cost support and closure compensation depends on the other costs during the support period as reported by the company on the application. According to the Act on Cost Support, other costs during the support period refer to the inflexible operating costs and losses during the support period (1 November 2020 to 28 February 2021) justified by the company that are final and for which no cost support has previously been granted. The company must be able to distinguish the costs during the support period from other expenses it has declared on the application.

Inflexible costs cannot be adjusted in a way that corresponds with the volume of activities. In other words, even if the company does not have any sales, these expenses must be paid and it is not possible to adjust them according to decreased business activities unlike, for example, material and supplies costs or new investments.

The content of the inflexible costs that the amount of cost support is based on may be different for each company. Such costs include, but are not limited to, rental costs and other expenses concerning property used for business, equipment and item rentals, compensation for the right of access, licence fees, and necessary hired labour costs. Losses may include, for example, prepayments made by the company that have proved to be final.

The company must notify the State Treasury if the inflexible costs or losses indicated in the application later change, for example in the form of discounts received by the company or reductions in expenditure.
Below, you can find examples of expense types that can be considered inflexible costs and losses during the support period as referred to in the Act. Please note that the list is not exhaustive but only includes some examples. The eligibility of declared costs and losses is always decided on a company-specific basis when granting cost support.

Rental and other expenses on property used for business:
• Rental expenses related to the company’s property/premises (such as facility and property rent)
• Maintenance charge
• Electricity, water, gas, steam
• Security, facility surveillance or security systems
• Inflexible cleaning costs, waste management
• Property insurance premiums and property tax
• Statutory vehicle insurance premiums and taxes
• Road maintenance fees
• Interest expenses on a loan related to real estate
• Inflexible financial, accounting and audit costs
• Inflexible communications technology and phone plan expenses
• Maintenance costs for animals used in business
• Rental and bank guarantee costs

Equipment and item rentals

• Cost of leased vehicles
• Leased electronics (computers, monitors, phones, etc.)

License and access right fees
• Inflexible franchising fees
• Inflexible taxi hire company fees
• Royalty payments
• Computer software license fees
• Inflexible server costs (purchased from an external service provider)

Necessary hired labour cost

Necessary hired labour cost are considered to be e.g. hired labour costs that correspond to activities by the company’s own staff that are necessary for maintaining business or business readiness. Only necessary hired labour cost labour costs are eligible for the cost support. Upon request, the company must present a report on the necessity of using hired labour to maintain the company’s business.

Inflexible losses

Inflexible losses may include, for example, prepayments made by the company that have proved to be final. This may include advance payments made by a tour company to hotels or service providers for which the company has not received any refunds despite the cancellation of the trip. Upon request, the company must be able to verify that the losses indicated in the application are final and cannot be reasonably refunded by the receivers of the prepayments or other parties.

Payroll costs include the direct wages the company has paid. The State Treasury will collect this information from the income register. In addition, the employer’s non-wage labour costs would be accepted as payroll costs, calculated as a percentage of the payroll costs. Non-wage labour costs include sick pay, holiday pay and holiday bonus, as well as social security contributions and occupational health expenses.

For private traders and general partners of a partnership, the earned income reported to self-employed persons’ pension insurance would be accepted as payroll costs. The contributions to the self-employed persons’ pension insurance and to health insurance would also be accepted as payroll costs based on the company’s declaration.

Reference periods refer to the periods for which the comparison defines the decrease in the company’s turnover between the normal period and the pandemic period. The granting of cost support is subject to a drop in turnover of more than 30%.

The normal period and the pandemic period are determined by the company’s VAT reporting period and the date of establishment. You can use the counter on the counter tab to find out your reference period.

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The support period, for which cost support is applied for, is the same for all applicants.

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’s main line of business is not covered by the support and the company has no COVID-19-related particularly serious reasons for the decrease in turnover
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.

Cost support and closure compensation can be applied for even if the company has already received other direct subsidies intended to alleviate the consequences of the COVID-19 pandemic. However, the support already granted is taken into account in determining the amount of the cost support, and the total amount of support may not exceed EUR 1,00,0000. The maximum amount of support per company is laid down in the European Commission’s regulations on temporary State aid.