Information for businesses & companies (NRW) “SARS-CoV-2/ Covid19” – crisis Status: 18.03.2020

Initial situation:

Decrees of the Ministry of Labour, Health and Social Affairs NRW from March 15/17. & March 18.

The following facilities, meeting places and services are to be closed or discontinued: All pubs, cafés, opera houses and concert halls (from 16 March), all trade fairs, exhibitions, leisure and animal parks and providers of leisure activities (indoors and outdoors), special markets and similar facilities, coach tours, all sports operations on and in all public and private sports facilities and all meetings in clubs (from 17 March), amusement arcades, casinos, betting shops and similar establishments (from 16 March), places of prostitution, brothels and similar establishments (from 16 March).

How can I reduce running coststhrough wages/salaries?

Companies and businesses can apply for short-time work if necessary. If companies reduce working hours for economic reasons or – as in the case of the Corona crisis – due to an unavoidable event, the Federal Employment Agency pays so-called short-time work compensation. The application can be made with retroactive effect from 01.03.2020. The conditions have fallen to such an extent that now only 10 percent of the company’s employees must be affected by the loss of working hours, instead of the previous figure of 33 percent of employees. The application shall be submitted to the competent employment agency. Employees on short-time work generally receive 60 percent of their flat-rate net remuneration. If there is at least one child living in the household, the short-time working allowance amounts to 67 percent of the lost flat-rate net remuneration. The maximum statutory subscription period is 12 months. By introducing and applying for short-time work, you can protect your liquidity in the medium term.

In addition, full reimbursement of social security contributions for lost working hours (decision by the health insurance fund on a case-by-case basis) and continued remuneration insurance (U1) can be used.

We will be happy to assist you with the implementation in your company and the application for short-time work benefits for your employees.

Will I receive compensation if my business is closed down due to a government order in connection with infection control?

Claims for compensation are primarily based on the Infection Protection Act (IfSG). If you are subject to a prohibition of activity under the IfSG, compensation should be considered. For example, if you have been placed in quarantine purely as a precautionary measure because there was a positive case of infection in your company, you can apply for compensation. However, before an application is made prematurely, an expert examination should be carried out. The application for compensation under IfSG must be submitted to the LVR Rheinland or the LVR Westfalen-Lippe, depending on jurisdiction. In the case of self-employed persons, the profit from the previous year must be used to determine the amount of the reimbursement claim, since the compensation is based on the loss of earnings. In addition to the loss of earnings, self-employed persons can also be compensated for business expenses to a reasonable extent. In addition, the possible occurrence of a company insurance policy must always be examined.

How can I generate short-term liquidity,to survive the crisis economically?

Liquidity shortages can be secured by the Bürgschaftsbank NRW (up to EUR 2.5 million) and the state guarantee programme (from EUR 2.5 million, also large companies). Small businesses and start-ups can apply for equity capital from the micro-mezzanine fund of up to EUR 75,000.00.

We generally recommend the following procedure:

1. determine liquidity requirements;
2. preparation/ compilation of decision-relevant documents:
– Annual accounts (YES) 2018,
– Preliminary financial statements 2019 or business analysis 2019 incl. Summary and balance list 2019,
– Preliminary revenue/profitability/liquidity planning 2020.
3. advice/selection of suitable financing
(e.g. default guarantee of BB Bank NRW up to EUR 250,000.00 in combination with loans from the house bank, express procedure: Decision within 3 days after application).
4. application for financing.

Can I reduce tax prepaymentsor take other tax-related precautions?

The Ministry of Finance of North Rhine-Westphalia has instructed the North Rhine-Westphalian tax offices to make extensive use of their scope for discretion and decision-making in tax deferral applications and applications for reductions in advance payments of income tax and corporation tax in favour of those directly affected.
According to a statement by the City of Cologne, companies subject to trade tax can now apply for a reduction in advance payments of trade tax if there are signs of a drop in profits. This should also be implemented in the same way in other cities. However, depending on the municipality, this remains a case by case assessment.
It should therefore be expertly considered whether the following measures should be taken:
– Reduction or suspension of current tax prepayments (mainly income tax, corporate income tax) upon application;
– Deferral of tax payments already due upon request;
– Remission of surcharges for late payment;
– Waiver of enforcement measures;
The above measures must be applied for at the relevant tax office or tax collection agency.

Is the obligation to file an insolvency petition suspended until the end of the year in the event of insolvency or overindebtedness?

This information was actually disseminated in relevant press reports. Currently, however, there are only political intentions to “suspend” the application obligation. A concrete legislative amendment has not yet been adopted. Therefore, legal entities are currently still obliged to file for insolvency if they are ready for insolvency. In this context, we would also like to point out the criminal liability of not filing an application in due time (delay in filing insolvency, Section 15a (4) InsO). In case of insolvency maturity, the obligated party is only granted a test period of up to 3 weeks. An application must be submitted within this period.

We keep an eye on the current legislation and update this information continuously. Therefore, please pay attention to the topicality in the header of this information.

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How can we help you?

How can we help you?

We offer you a wide range of services so that you can lead your company through the current crisis and you have the opportunity to act in your economic existence. The OVH lawyers and tax consultants are there to help you with advice and support.

In the course of this, we discuss which concrete measures come into consideration for you and develop a protection concept individually adapted to your company.

We are also happy to support you in the preparation, tax and legal review of the measures to be taken.

Finally we would like to point out that this information only contains a non-binding overview of the topic addressed. They do not replace legal or tax advice. We are always at your disposal as a contact person for this client information and for advice.

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