The support and recovery package for companies affected by the coronavirus is constantly changing. Below we provide a letter update on the recent developments regarding the Temporary Emergency Measures for the Preservation of Employment (“NOW“) and the Fixed Costs Allowance (“TVL“).
On Friday 12 March 2021, a number of changes were published to the NOW schemes. The parameters for the fifth tranche of the NOW, which covers the period April to June 2021, have been aligned with the parameters of the fourth tranche. Employers can once again receive compensation of up to 85% of their wage bill.
The changes also cover the periods in which the final determination of the various NOW schemes can be requested. The determination of NOW 1 can be requested until 31 October 2021. For NOW 2, the final date for the determination is 5 January 2022.
Accountant protocol and third-party declaration NOW 2
Companies that receive an advance payment of at least EUR 100,000 and/or a definite grant of EUR 125,000 under NOW 2 or who make use of the operating company scheme, require an auditor’s report for the determination of NOW 2. An important addition to the protocol compared to NOW 1 is that the bonus and dividend prohibition must be checked for all companies, not only for companies using the operating company scheme.
The form for the third-party statement, which must be submitted by employers with an advance payment of EUR 20,000 or more and/or a subsidy of EUR 25,000 or more, has not been amended compared to NOW 1.
The TVL schemes are also still being developed and amended. The TVL offers companies with a loss of turnover of more than 30%, an allowance for their fixed costs, the amount of which depends on the average fixed costs percentage in the sector and the loss of turnover. Specific or supplementary schemes apply to certain sectors.
Hardship clauses SBI codes
The subsidy for the TVL is partly determined by the main activity registered for the company in the Trade Register of the Chamber of Commerce on 15 March 2020. Following a number of rulings by the Trade and Industry Appeals Tribunal, it was decided to introduce specific hardship clauses in this regard. Companies whose actual activities on 15 March 2020 were different from those registered in the Trade Register may be granted subsidy based on their actual activities, if they can provide sufficient proof.
Approval by European Commission
These hardship clauses must first be approved by the European Commission. The European Commission has already approved a number of previously announced changes to the TVL on 17 March 2021, such as the access of the TVL for non-SME businesses as of the first quarter of 2021 and the increase of the maximum subsidy amounts per quarter. More information on when these changes will take effect is expected in week 12.
The other amendments to the TVL for the second quarter of 2021, such as the increase of the subsidy percentage from 85% to 100%, will still be submitted for approval at the end March 2021.
In order to make optimal use of the available support measures, it is important to continuously investigate the consequences of the changes to these measures for your company. We are, of course, happy to support you in this regard.