As a result of the COVID-19 pandemic, many companies in Germany have suffered heavy losses. To mitigate the economic impact and prevent bankruptcies, the federal government has implemented several relief measures. One important measure is revenue replacement for businesses affected by government measures to contain the pandemic.
On 7. July 2021, the federal cabinet has approved a new guideline for sales replacement. The new scheme replaces the previous Bridging Assistance III Plus and is to apply for the period from July to September 2021. The changes mainly concern the conditions for eligibility to apply, the amount of the turnover rate and the timing of payment.
This overview of the new sales replacement guideline gives you a quick overview of who is eligible, how much sales replacement will be and what requirements must be met to receive sales replacement.
Read on to learn more about the new revenue replacement policy.
New revenue replacement policy
The federal government has adopted a new guideline for turnover replacement. This is intended to help businesses that have suffered massive sales losses due to the Corona crisis.
Businesses that have had to close due to an official order or whose sales have plummeted by more than 50 percent are now eligible for the sales substitute.
- The amount of the revenue replacement is based on the affected company’s average monthly revenue from 2019.
- The turnover replacement is 75 percent of the average monthly turnover from the year 2019.
- Companies can apply for turnover replacement for a maximum of six months.
It is important to know that the sales replacement is taxable and that the application for the sales replacement must be submitted by 15. December 2020 is possible.
Businesses that may benefit from the new sales replacement policy should be sure to check if they are eligible and apply for sales replacement.
Who is affected by the new policy?
The new revenue replacement policy primarily affects businesses, self-employed individuals and freelancers who have suffered significant revenue losses due to the COVID-19 pandemic. Tourism and catering businesses, cultural workers and event organizers are also affected by the directive.
In order to claim the sales substitute, the companies concerned must prove that they have experienced a sales decline of more than 50 percent compared to the previous year. You must also have your registered office or a permanent establishment in Austria.
Revenue replacement applies to the period of 1. November 2020 to 30. June 2021 and is up to 80 percent of the sales generated in the corresponding month of the previous year. In the case of companies that did not start operations until after 1. January 2019 were established, the average turnover of the previous year will be used as a reference.
- Businesses: those affected by COVID-19 pandemic with a decrease in sales of more than 50 percent compared to the previous year
- Freelancers and self-employed workers: freelancers and self-employed workers affected by COVID 19 pandemic with sales down more than 50 percent year-over-year
- Tourism and catering businesses: tourism and catering businesses affected by COVID 19 pandemic with a drop in sales of more than 50 percent compared to the previous year
- Cultural workers and event organizers: cultural workers and event organizers affected by COVID 19 pandemic with revenue decrease of more than 50 percent compared to previous year
How to apply for sales replacement:
The new guideline for turnover substitution poses the question for many entrepreneurs how to apply for turnover substitution. First, you must register with the tax office to obtain a tax number. If so, you must file your advance sales tax return for the month in which you suffered a sales shortfall.
After that, you can apply for the sales replacement. This is done electronically via the FinanzOnline portal. To do so, they must fill out a special application and provide all required information, such as.B. The amount of the loss in turnover and the reasons for it.
It is important that you submit all required documentation and supporting documentation to complete the sales replacement application process. This includes, for example, copies of invoices, bank statements or contracts.
After you submit the application, it will be reviewed by the tax office. If all information is received and correct, the sales replacement will be transferred to your account. This may take a few weeks to complete.
It is important to learn about the guidelines early and submit the application in a timely manner to avoid delays. Also, take advantage of expert help and advice to make the process as smooth as possible.
New policy for revenue replacement
The government has adopted a new directive for turnover replacement. This scheme is intended to be used to support companies and businesses that have suffered sales losses due to the COVID-19 pandemic.
To be eligible for revenue replacement, certain requirements must be met. First, revenue losses of at least 30% must be demonstrated for a given billing period. For this purpose, a comparative period from 2019 is to be taken as a basis. On the other hand, the application for revenue replacement must be submitted to the appropriate office.
Certain documentation must also be submitted when applying for revenue replacement. These include, in particular, the advance sales tax returns and the profit and loss accounts for the period in question. All receipts and invoices related to the loss of revenue should also be retained.
It should be noted that certain companies and businesses are not eligible for revenue replacement. These include, for example, businesses that have already applied for other assistance or subsidies, or those with a large drop in sales that have initiated closures due to the COVID-19 pandemic.
The changes in the new turnover replacement guideline
The new directive on turnover replacement contains several important changes compared to the old directive. One of the most important changes relates to the amount of revenue replacement. In the old guideline, revenue replacement was a maximum of 80% of the revenue generated in the comparable months of the previous year. In the new guideline, this percentage has been increased to 100%.
Other changes relate to the target groups that can apply for revenue replacement. In the old directive, only certain industries were eligible to apply for the sales tax rate. In the new guideline, the list of eligible industries has been expanded and many companies that were not eligible before can now apply for revenue replacement.
Additionally, provisions for crediting other grants have been changed in the new policy. In the old directive, all other receipts were counted toward revenue replacement, which meant that many business owners were not eligible for revenue replacement. In the new policy, some receptions are no longer counted toward the revenue substitute and the limit for crediting has been increased.
The new directive therefore brings many positive changes that will help to better support businesses and the self-employed.