April 21, 2020

Reducing liquidity shortages via modified tax & social security regulations

Europe
COVID-19
Description of the core change(s) brought by this policy instrument

A. Special tax regulations concerning Coronavirus

  • Prepayments of income or corporate income tax for 2020

Prepayments of income or corporate income tax for 2020 can be reduced or assessed amounting to EUR 0. In addition, there is the possibility to total or partial non-imposition of prepayments of income or corporate income tax for 2020.

Taxpayers which are affected by a loss of income due to the SARS-CoV-2 virus may apply for a reduction of prepayments for income or corporate income tax for the calendar year 2020 until the 31st of October 2020. The application can be filed via FinanzOnline. For taxpayers who do not use/have access to FinanzOnline, a template form is provided.

  • Tax collection

Taxpayers may apply to their tax office to defer the date of payment of a tax (deferment) or to grant payment in installments. The application has to include specific facts of the taxpayer's individual circumstances of being affected. When processing the application the tax office has to take into account the specific situation that occurred in individual cases due to the SARS-CoV-2 virus. The application has to be processed immediately.

Taxpayers may apply to their tax office to reduce or not assess a fine for late payment. The application must include the taxpayer's specific circumstances of being affected and explain these credibly. When processing the taxpayer's application for a reduction or non-assessment of late payment fines, the tax office has to take into account that there is no gross negligence in the delay if the taxpayer's specific circumstances of being affected have been substantiated. See more details, here.

 

B. Social security contributions

Social security contributions for employees (ÖGK): Automatic deferment at the level of the social security carrier without any specific measures to be taken.

Social security contributions traders (SVS): Applications for deferred or instalment payments can be made with an informal email. The reduction of the current provisional contributions can be made via an online application.

  • Deferment of contributions
  • Instalment payments for the contributions
  • Reduction of the current provisional contributions
  • Total or part leniency of default payments

     

    Lifecycle of target firms for this policy instrument
    Existing SMEs
    Scale-ups
    Support offered
    Direct Financial Support
    Indirect Financial Support
    Level of intervention
    Firm-level
    Barrier(s) addressed with this policy tool
    Regulatory/policy: hiring costs
    Regulatory/policy: other
    Regulatory/policy: red tape/bureaucracy
    Policy timeline

    All measures introduced in response to the COVID-19 crisis are intended to be applicable immediately and will be in force until the end of 2020.

    Notes and additional context

    The above describes one of the four axes of the Austrian support measures for companies affected by COVID-19. To stimulate the economy, either new programs may be established as a result of the draft law or existing support programs (e.g. aws, ÖHT) will be expanded. The measures include the following areas:

    1. Hardship-fund for EPU and micro enterprises
    2. Financial support by means of guarantees and interim loans
    3. Measures to reduce liquidity shortages caused by tax and social security contributions
    4. Corona short-time work

    In order to mitigate the economic disadvantages resulting from the measures to prevent the spread of the 'Coronavirus', the following sectors should be financially supported:

    • Measures facilitating economic recovery
    • Mitigating the loss of revenue as a result of the crisis
    • Stimulation of the labor market
    Geographic scope
    National-level