COVID-19-Crisis: Special Tax Regulations
To address liquidity and payment problems caused by the COVID-19 crisis, the Austrian Federal Ministry of Finance has, on 13 March 2020, published guidelines. These guidelines provide special regulations supporting taxpayers with regard to the loss of income already incurred.
Any taxpayer, who credibly demonstrates a liquidity shortage specifically due to a SARS CoV-2 virus infection, can apply for a reduction or non-assessment regarding advance payments of income or corporate income tax (including on interest). Concerning tax collection, deferrals and payment in instalments as well as a non-assessment of deferral interest may be requested. Moreover, affected taxpayers may apply for a reduction or non-assessment of late payment surcharges.
Due to the current crisis situation, the Federal Ministry of Finance has provided a combined application with regard to the special regulations concerning coronavirus (link: https://www.bmf.gv.at/en/current-issues/Corona/Corona-help.html). These applications have to be processed immediately by the responsible tax offices.
A prompt filing of the applications is crucial. The most appropriate way to file the application is to mail the completed application form directly to the e-mail address set up for this purpose (email@example.com) or to upload the form on FinanzOnline. It should be noticed that this special procedure only applies for the specific tax regulations due to coronavirus. In particular, should other applications or filings be necessary (e.g. extension of the appeal period), such filings must be made in the regular procedure, i.e. via FinanzOnline, post or fax. In extraordinary cases, oral applications are possible, but not applications and filings via e-mail.
Support Measures by Social Security Institutions
The Social Security for the Self-Employed (Sozialversicherung der Selbständigen, SVS) provides the following supports to all SVS-insured people who expect financial losses due to the coronavirus or who are affected by illness or quarantine: deferral of contributions or agreement on instalments, reduction of the provisional contribution base as well as full or partial non-determination of interests for late payment. The reduction of the provisional contribution base may be requested by means of an online application form
Likewise, the Austrian Health Insurance (Österreichische Gesundheitskasse, ÖGK) provides support to affected employers, such as: no late notices for due contributions, automatic deferral if contributions are not paid, only partially paid or not paid in due time; payment in instalments, no collection measures, no insolvency applications.
Measures of the Federal Government
Last weekend, the Austrian Federal Government implemented various measures in order to stop the spread of SARS-CoV-2 virus. These measures may also have major impact on the business operation of individual entrepreneurs and the Austrian economy.
No compensation under the Epidemics Act due to closures under the decree issued on the basis of the COVID-19 Measures Act
No compensation for loss of earnings according to the Epidemics Act for employees and entrepreneurs due to the closure of a permanent establishment in accordance with the administrative decree based on the COVID-19-Measures Act
The COVID-19-Measures Act restricts the scope of the Epidemics Act to the extent that employees, who are employed in a business to which access has been prohibited by decree of the Federal Minister of Social Affairs, Health, Care and Consumer Protection, and entrepreneurs, whose business is affected by such decree, may not claim compensation under the Epidemics Act.
However, all other provisions of the Epidemics Act concerning potential compensation, i.e. for cases in which access to the business has not been completely prohibited by decree, currently seem to remain in force. Accordingly, in such cases, the entitlement for compensation under the Epidemics Act should, in principle, exist. Please note that if this is an unintended consequence of the currently rapidly changing regulations, amendments to these provisions might be implemented at short notice.
Changes regarding short-time work
The Labour Market Service Act has been extended now also covers economic difficulties related to coronavirus as temporary non-seasonal economic difficulties. Furthermore, higher lump sum payments for the partial compensation of additional expenses for short-time work support as well as for social security contributions and contributions to employee pensions. In addition, the subsidy shall be increased from the fourth month onwards for the employer’s increased expenses on social security contributions due to the special contribution basis.
Short-time work support is still regarded as taxable wage for income tax purposes and as remuneration for other levies and allowances under federal law. For the period of time receiving short-time work support, the contributions and social security benefits are based on the last contribution base before short-time work has started, if this was higher than the current contribution base.
This means that the employer's contribution to the compensation funds for family allowances (DB) and the supplement to the employer's contribution (DZ) have to be paid by the employer for short-time work support as well. An explicit exception is only provided for municipal tax, that is not payable for short-time work support in accordance to the Labour Market Service Act.
Moreover, regarding municipal tax paid for wages additionally paid to the short-time work support a deferral or payment in instalments may be granted at the request of the taxpayer. The application has to be submitted to the responsible municipality no later than the due date.
Please note: This newsletter merely provides general information and does not constitute legal advice of any kind from Binder Grösswang Rechtsanwälte GmbH. The newsletter cannot replace individual legal consultation. Binder Grösswang Rechtsanwälte GmbH assumes no liability whatsoever for the content and correctness of the newsletter.
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