Overview covid19 – OVH Lawyers & Tax Consultants in Cologne

Overview of working aids and brief information on COVID-19

COVID-19

Aid package for start-ups (volume: EUR 2 billion) is ready!
The Corona Pandemic poses fundamental challenges for companies. For this reason, the federal and state governments have launched a large number of aid programmes. However, these often require proof of turnover, which especially start-ups in the start-up and research phase cannot (yet) provide. Many start-ups therefore feel left alone by the state – they cannot use most of the classic credit instruments.

Since many investors are also pulling out due to the economic situation, start-ups are increasingly having to struggle with missing financing rounds and resulting liquidity bottlenecks. The federal government has now finally reacted to this and issued a special aid programme (matching fund) for start-ups.

But what does the aid actually look like and where can you apply for it?

Entry of public venture capital investors:
Additional public funds will be made available in the short term at the public fund of funds and at the fund level (above all KfW Capital), which can be used for financing rounds of start-ups in the context of co-investment together with private investors. KfW Capital can participate in a financing round with up to 70% in the form of convertible loans. However, at least 30% of the capital raised in the financing round must consist of private venture capital. However, the private investor must declare the corresponding interest to KfW Capital; a right of application by the start-up itself is not envisaged. A concrete application form does not yet exist.

Financing with venture capital and equity-replacing forms of financing:
For start-ups that are not or only marginally financed with private venture capital, the aid package offers further financial injections by the respective funding agencies of the federal states. The countries are provided with a credit line with which they can expand existing aid programs or set up completely new ones.

First steps of implementation:
NRW has, for example, set up the NRW.Start-Up akut programme to provide financial support to start-ups (UG and GmbH) which have been shown to be affected by the corona crisis in the start-up or seed phase through convertible loans (loan amounts of EUR 15,000.00 to EUR 200,000.00). More information about the program here:

https://www.nrwbank.de/de/foerderlotse-produkte/NRWStart-up-akut/16008/nrwbankproduktdetail.html

The application documents are currently not (yet) available, but will be made available shortly. The application must then be submitted to NRW.BANK via startup-akut@nrwbank.de

Conclusion and outlook:
Although the programme is well on its way, the concrete procedures and conditions are still rather unclear. Once the entire program has been implemented in all its facets, the corresponding applications should be submitted. If you have any questions or need assistance, we are of course available!

Use of Corona emergency aid for private living?

 

In the context of Corona emergency aid, many recipients are uncertain about the purposes for which the money may be spent. In particular, since there are different regulations in the individual federal states, questions arise such as: May the services received also be used for private purposes, such as private rent payments or private purchases?

The basic purpose of corona emergency aid is to secure the economic existence and bridge acute liquidity bottlenecks. The financing of current operating costs such as rents, leases and loans for operational purposes should thus be ensured. According to the information provided by the federal government, this does not include private purposes.

In principle, the emergency aid for companies with a maximum 50 employees for federal funds spent by the states. As a result, there are different opinions in the various federal states as to the possible uses of emergency aid.

The federal state of Baden-Württemberg, for example, considers use for private purposes to be possible. According to the current announcements of the NRW Ministry of Economic Affairs, however, the services may only be used for operational purposes, contrary to (!) the original announcements at the beginning of the application activation, which still stated on the website of https://www.wirtschaft.nrw

“Solo self-employed persons in their main occupation draw their livelihood from their self-employment and must therefore also earn their own salary in order to earn a living. If the financing bottleneck of the self-employed person in his main occupation means that he can no longer earn his regular salary, the emergency aid also serves to finance his own salary and thus his livelihood.”

However, this passage can no longer be found on the website and has been replaced by the following passage:

“In accordance with the key points decided on 23 March 2020, the Federal Government’s emergency aid programme supports small companies, the self-employed and members of the liberal professions with a grant to secure their economic existence and bridge acute liquidity bottlenecks. These ongoing operating costs may include, inter alia, commercial rentals, rents, loans for premises and leasing expenses, in relation to the three months following the application. On the other hand, costs of private subsistence, such as the rent of a private dwelling or health insurance contributions, cannot be covered by emergency aid. To ensure that the existence of small businesses, freelancers and self-employed persons is not threatened, access to benefits under Social Code Book II (SGB II), especially unemployment benefit II, will be simplified. Among other things, a significantly simplified assets audit is applied here for six months, and expenses for accommodation and heating are recognized at their actual amount for a period of six months from the date of application.”

There are now considerable risks associated with the use of the tools for private life – from recovery to criminal liability for subsidy fraud. Due to the current considerable legal uncertainty, private use of the services is strongly discouraged. If there are difficulties in financing their private life, those affected should, in the current view of the State of NRW, fall back on benefits under Social Code Book II (SGB II). The extent to which this legal interpretation is maintained depends on the one hand on the respective federal state and on the other hand on how and whether the federal government changes its guidelines for the use of aid.

 

Trust-protection solution: Solo self-employed persons may also use the Corona emergency aid for private purposes

May the Corona Aids also be used for private purposes? This is a question many solo freelancers have been asking themselves lately. So far, the Federal Government has answered this question with no: the aid is only intended for current operating expenditure. It referred the persons concerned to the basic provision (unemployment benefit), which, however, cannot regularly be claimed retroactively.

Contrary to the ideas of the Federal Government, North Rhine Westphalia is now introducing the so-called “trust solution” in order to provide better support for self-employed persons in the corona crisis.

According to this, all affected persons who applied for Corona emergency aid in March and April, but none on basic security, are allowed to spend a sum of 2,000 € to finance their private livelihood. This is a quick and fair solution for all those who need financial support in times of the Corona crisis. In any case, better planning security is now guaranteed for all those concerned.

– Request for tax relief

– Application for refund of advance payments of turnover tax

In future, the deferral request can/should be submitted at the same time as the submission of the advance VAT return, please let us know in advance if you want us to submit this request for you.

– Information from the NRW tax authorities

– Possibility of reducing the advance payments already made for the first quarter of 2020

– No deferral of wage tax is currently planned

We would like to point out that the aforementioned tax deferrals are merely interest-free payment deferrals, but not debt remission. Therefore, time-consuming deferral requests should be weighed up in advance against the need for the required liquidity.

If a company gets into difficulties as a result of the Corona crisis, the deferral of social security contributions is a way of giving the company some financial ‘breathing space’ again.
The precondition is that the company has serious payment difficulties or would get into such difficulties if the contributions were collected immediately. The decision on a deferral is made by the responsible health insurance company.

We would like to point out that the deferrals are merely interest-free payment deferrals, but not debt remission.

– Promotion Home Office
– Ordered closure of restaurants, cafés, retail outlets – we will be happy to advise you!
Effects of the Corona crisis on the management report

450€ limit may be exceeded in mini-jobs

According to the BMF, no taxes are levied on bonus payments up to EUR 1,500

– Relief for the travel industry – Federal government wants to secure travel vouchers

 

Corona aid for founders

Since 13.05.2020, companies founded after the previous cut-off date of 31.12.2019 can also apply for Corona emergency aid in NRW. This now also facilitates state aid for young entrepreneurs in particular so that they do not suffer too great a disadvantage in the Corona crisis.

The essential prerequisite for the subsidy is that the company has got into a corona-conditioned emergency situation through no fault of its own and has already offered its goods or services on the market before 11.03.2020. In more concrete terms:

At this point in time, sales must already have been generated, at least one customer order must have been placed or a long-term or permanently recurring operational payment obligation must already have been entered into, such as a lease agreement.

The application can be made with the help of a tax advisor. We are happy to do this for you and advise you on any questions that may arise. Please do not hesitate to contact us!

 

Corona compensatory payment for health care providers

As a result of the corona crisis, many health care providers, such as physiotherapists, occupational therapists or speech therapists, are experiencing a loss of revenue resulting from the failure to treat their regular, legally insured patients.

To accommodate this, there is now a new protective shield for such healing practices. This is based on the “Ordinance on the Compensation of COVID-19 Conditional Financial Burdens for Health Care Providers” of the Federal Ministry of Health. The Regulation entered into force on 5 May 2020.

Accordingly, practice owners will receive a compensation payment in the form of a one-off payment of 40% of the allowance that they settled with the statutory health insurance companies in the 4th quarter of 2019. Such practices that were approved between 01.10.2019 and 31.12.2019 will also receive 40% of the remuneration billed in the fourth quarter, but at least € 4500. In the case of admission from June 2020, the compensation payment is 1500 €. Outpatient clinics in hospitals also have a claim, provided they have a licence in accordance with § 124 section 2 in conjunction with section 1 SGB V.

However, the payment must be taxed. It is assigned to the account “other entry”.

If no settlements were made in the fourth quarter of 2019, there is no entitlement to a compensation payment under the current rules. This is not planned for this case and so far the health insurance companies are not expected to make any exceptions.

Moreover, the payment does not apply to revenues from private services either, since the funds are paid from the compulsory contributions of those with statutory health insurance.

In addition to the compensation payment, the new regulation also provides for a hygiene flat rate which can be calculated for the additional costs of corona protection measures. It amounts to €1.50 per prescription and can be claimed from 05 May to 30 September on every prescription that is billed.

– Already possible in some federal states: Requests for an extension of the deadline for submitting the 2018 annual tax returns by members of the tax advisory profession for companies and/or private individuals directly and significantly affected by the Corona crisis can be granted retroactively from 1 March 2020 to 31 May 2020, see Saxony.

Tax treatment of Corona Emergency aid

Corona Emergency Aid: The most important questions about private assets and liquidity shortage

Tax-free allowances and support for employees up to EUR 1,500

Temporary increase of time limits for short-term employment

The measures of KfW, NRW.BANK and the guarantee banks are usually handled by your principal bank, e.g. the Sparkasse banks.

Brief information NRW BANK

– Universal credit for companies and freelancers with annual sales of up to EUR 500 million: increased risk assumption (80 percent instead of 50 percent)

– no more minimum credit amount

– Credit commitment within three days for indemnity amounts up to a maximum of EUR 250,000.00

– changed maturity variables with grace years

Brief information Bürgschaftsbank Nordrhein-Westfalen

– Increase of the guarantee ceiling to EUR 2,5 million (previously EUR 1,25 million)

– Increase in the volume of loans that can be guaranteed to EUR 3,125 million

– Maximum amount for guarantee increases from EUR 150,000.00 to EUR 200,000

– Express application approval after 72 hours

Required documents must be submitted digitally by email to info@bb-nrw.de

Advice on aid loans from NRW.BANK

Corona aid from NRW.BANK

Further information for other federal states

The most important subsidies for companies

NEW!: KfW Fast Loan

Compensation for staff costs for employees affected by quarantine

Supplementary clarification to the IfSG
– Protection against infection law and compensation: If your business is closed down by the public health department, you may be entitled to compensation under the Infection Protection Act

We would like to point out that due to the large number of new developments, no guarantee is given for the current status of the above information and the above information does not replace legal or tax advice relating to the individual case!

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