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Innovations introduced by the 3. COVID-19 Act

In the COVID-19 crisis, the Austrian Parliament is also going through a period of rapid changes of laws. After the adoption of the COVID-19 Act on Sunday, 15 March 2020 and the 2. COVID-19 Act on 20/21 March 2020, three comprehensive compilations of new laws (3. COVID-19 Act, 4. COVID-19 Act, 5. COVID-19 Act) have been passed on 3/4 April 2020. The new laws (mainly) entered into force on 5 April 2020.

The 3. COVID-19 Act is a detailed legislative piece with 47 amendments and 4 new federal laws.

In the following, we will briefly summarize the main legal innovations introduced with the 3. COVID-19 Act for you (the masculine form is used for better readability):

Amendments to the employment laws

The 3. COVID-19 Act also adapts numerous labour law provisions to the crisis situation:

  • AVRAG: In view of the fact that there is currently a shortage of care workers for 24-hour care due to the border closures, the special leave of absence established specifically in connection with the COVID-19 crisis (limited until 31 May 2020) (which can be agreed with the employer and in which 1/3 of the wage costs are reimbursed by the federal government upon application) was extended to employees who take over the predominant care of a relative in need of care from the time the care worker ceases to be available. In addition, the special leave of absence will be open to employees who care for disabled persons at home who are normally accommodated in an assisted facility.
  • EstG: The legislator has decided to reward employees who perform exceptional services in the COVID-19 crisis with a tax gift. Therefore, allowances and bonus payments made to employees as a result of the COVID 19 crisis will be tax-free up to EUR 3,000 in 2020. These additional payments must be made exclusively for this purpose and must not have already been granted before.
  • ASVG: Until now, there has been no specific legal regulation stating that an accident in the home office must also be considered an occupational accident. Due to the "quasi" obligation to work in the home office, the legislator has now reacted and, for the duration of measures under the COVID-19 Measures Act, has expressly qualified accidents in a temporal and causal connection with work activities in the home office as occupational accidents. In addition to accidents during the actual performance of work, this includes in particular the way to lunch and the taking of the meal as well as, for example, visiting the toilet. As a consequence of this, employees are generally entitled to benefits from the statutory accident insurance in the event of accidents in the home office in the current situation.

    Employees who belong to the Covid-19 risk group and do not work in critical infrastructure areas are now entitled to paid time off under certain circumstances, unless working in the home office is possible or the risk of infection at the workplace and on the way to work can be excluded by implementing appropriate measures with the highest possible level of certainty. The exemption of employees in critical infrastructure is already the subject of controversial discussions.

    The definition of the general Covid-19 risk group is carried out by a group of experts comprising three experts each from the Ministry of Social Affairs, Health, Care and Consumer Protection, the umbrella organisation of social insurance institutions and the Medical Chamber, as well as one expert from the Federal Ministry of Labour, Family and Youth. The assignment to the risk group is based on medical knowledge and, if possible, on the intake of medicines. According to the Minister of Health, these should be elderly people and people who have a massively reduced immune defence, for example after a serious cancer, after a serious operation or due to severe diabetes. The health insurance institution must inform an employee or apprentice of his assignment to the Covid-19 risk group.

    Employers of employees who are entitled to leave of absence after the treating physician has assessed the individual risk situation and issued a corresponding COVID-19 risk certificate, can regress with the health insurance carrier with regard to the remuneration paid and the social security contributions payable on it. The respective application must be submitted within six weeks after the end of the leave of absence.

  • Labour Market Financing Act (AMPFG): Based on the high number of Corona short-time work applications to date, for which an amount of EUR 1 billion was last budgeted, the legislator assumes that this will not be sufficient in 2020 and authorises the Labour Minister, in agreement with the Finance Minister, to adjust the upper limit flexibly to the respective situation by decree.
  • AuslBG: An exception was made for the maximum duration of engagement of third-country nationals in agriculture. The permissible duration of engagement for seasonal workers who are already engaged based on a respective permit and who are needed for urgent work will be extended beyond the generally applicable nine-month maximum duration of engagement in order to prevent supply bottlenecks with domestic products during the COVID 19 crisis.

Amendment of the Epidemic Act 1950 (Epidemiegesetzes 1950) and the COVID-19 Measures Act (COVID-19 Maßnahmengesetzes)

The present amendment involves the public security service bodies more closely in monitoring these laws. Accordingly, they may take preventive measures (e.g. "mere patrol duty", legal instructions, warnings, frequent inspections and presence on location) and impose administrative fines or report to authorities in accordance with § 50 VStG.

At the same time, the enforcement of the Epidemic Law 1950 will become easier for the competent authorities:

  • Ordinances of the district administrative authorities (Bezirksverwaltungsbehörden) may now also be legally effective by publication on the authority's website.
  • Competence is transferred from the district administrative authority to the State Governor, if ordinances shall cover the entire district, several districts or the entire Province. With the legal validity of such an ordinance of the State Governor, any conflicting ordinances of the district administrative authorities shall cease to be effective.

COFAG and the increase in the COVID 19 crisis management fund

The (first) COVID-19 Act established a crisis management fund endowed with up to EUR 4 billion. Settlement should take place via the Federal Wind-Down Company (Abbaumanagementgesellschaft des Bundes).

In the meantime, a subsidiary of the Federal Wind-Down Company was founded on behalf of the Federal Minister of Finance under the name COVID-19 Finanzierungsagentur des Bundes GmbH (COFAG). Appropriate tasks have already been assigned to it. With the current amendment, the federal government is obliged to provide COFAG with the necessary financial resources - up to a maximum amount of EUR 15 billion​​​​. From a regulatory perspective, this makes COFAG a “public body”. Credit institutions may thus treat risk positions vis-à-vis COFAG privileged in terms of risk assessment (i.e. like risk positions vis-à-vis the federal government).

With the 3. COVID-19 Act, the fund resources will be increased from the previous EUR 4 billion to up to EUR 28 billion. They may now also be used to stabilise the liquidity of directly or indirectly affected companies (e.g. assumption of liability, guarantees, granting of loans or subsidies for operating costs).

KMU Promotion Act (KMU-Förderungsgesetz) - Faster guarantees

Affected companies need fast and unbureaucratic support throughout the COVID 19 crisis. One aspect of this is the maintenance of liquidity by means of bridging financing by credit institutions, which is made possible by state guarantees.

For this purpose, the bureaucratic written form requirement of the funding decision will be reduced, in order to ensure faster processing here as well. Accordingly, the settlement agency can now transmit the guarantee bond electronically and sign it by copying the handwritten signature (facsimile)", in order to ensure faster settlement here as well. Accordingly, the settlement agency can now transmit the guarantee statement electronically and sign it by reproducing the handwritten signature (facsimile).

Extension of the hardship fund

With the adoption of the 2. COVID-19 Act the hardship fund for single-person entities, micro enterprises and the self-employed to provide rapid financial support was created.

However, the circle of the potential beneficiaries for support and the conditions for support were quite strict, which led to an "outcry". For this reason, the circle of eligible persons under the Hardship Fund Act was extended to include the following groups:

  • "New self-employed"
  • natural persons or working shareholders who are compulsorily insured under BSVG/GSVG/FSVG or in insurance policies of corresponding institutions of the liberal professions
  • accommodation providers of private guest rooms in their own household with a maximum of 10 beds (not be subject to Austrian Trade Act).

The Hardship Fund will continue to be administered by the Austrian Federal Economic Chamber, but no longer exclusively. Agrarmarkt Austria is in fact entrusted with the administration of the fund for affected agricultural and forestry enterprises and private accommodation providers. In addition, it is stipulated that the Austrian Federal Economic Chamber may make use of other legal entities (such as the Chambers of Commerce of the Provinces) to carry out this processing.

Not least because of the extension of the circle of potential beneficiaries, a rapid and unbureaucratic examination of the eligibility criteria for funding must be ensured.  For this reason, the circle of the institution is now also being expanded, which - in compliance with data protection regulations - must provide the administrative agencies on request with the data necessary for the amount of the grant to be awarded and the purpose of establishing identity.

The hardship fund will be increased from EUR 1 billion to a maximum of EUR 2 billion.

Amendment of various provisions in the health sector

Numerous acts (e.g. the Paramedics Act, the Health and Nursing Care Act and the Federal Act on the Regulation of Higher Medical-Technical Services) specify that certain privileges enacted in the course of the 2nd COVID-19 Act shall only apply in the context of the COVID-19 crisis. Any privileges based on these provisions will continue to exist, but at the latest until the end of 31 March 2021.

Epidemic doctors are appointed when a notifiable disease occurs (e.g. as in the case of coronavirus), if the doctors available in the affected areas are not sufficient to effectively combat the disease. They are now treated equal with public health officers.

Federal Act on Hospitals and Health Resorts (Bundesgesetz über Krankenanstalten und Kuranstalten)

In the event of an epidemic, pandemic, terrorist threat, armed conflict or other crisis situation, the legislator empowers the state legislature (Landesgesetzgeber) to authorise the state government (Landesregierung) by state Act (Landesgesetz) to provide for exceptions to the state regulations governing hospitals and sanatoriums (e.g. with regard to collegial management in hospitals or the appointment of the responsible head of the medical service). This, however, only to the extent that the special situation requires such an approach and the protection of the life and health of people is maintained. The respective state law must limit the validity of such regulations to a maximum of six months.

Federal Act on the marketing on the marketing of face masks during the Corona COVID-19 pandemic (Bundesgesetz über das Inverkehrbringen von Mund-Nasen-Schnellmasken während der Corona COVID-19-Pandemie)

Oronasal masks are in great demand these days but must be certified for marketing. The legislator now stipulates that oronasal masks do not have to be certified in advance (based on the Medical Devices Act or the Machine Marketing and Notification Act). This means that oronasal masks may be distributed to the population unbureaucratically.

The Republic of Austria currently procures medical protective equipment at central level. In order to speed up distribution, the Federal Minister of Finance will be given the appropriate authorisation to dispose of these goods or services. Insofar as other legal entities (e.g. federal states) also benefit from this, they must at least assume the purchase value of the goods or services received.

Amendment of the Income Tax Act

Clarification of the tax exemption of COVID-19 grants

As of 1 March 2020, the following grants are tax exempt:

Grants paid by the COVID-19-crisis management fund (e.g. payments in connection with short-time work).

Grants paid by the Hardship Fund under the Hardship Fund Act.

Grants paid by the Corona crisis fund.

Other comparable grants paid by the federal states, municipalities and statutory interest representations that are made for coping with the COVID-19 crisis situation.

Clarification of commuting allowance and overtime surcharge

Also in case of COVID-19-related short-time work, teleworking (home office) or inability to work, the commuter allowance is granted to employees for tax purposes, i.e. despite the distance between home and place of work is no longer commuted or not commuted every working day due to the current COVID-19 crisis.

Likewise, overtime surcharges as well as dirt-, aggravation- and hazard-bonuses, which are continuously paid to employees despite telework or quarantine, will continue to be tax exempt.

Tax exemption of employee bonuses in connection with the COVID-19-crisis

Allowances and bonus payments which are additionally paid due to the COVID-19-crisis are tax exempt up to EUR 3,000 in the calendar year 2020. These must be additional payments made exclusively for this purpose and have not usually been granted before. They do not increase the tax-privileged one-sixth of the year (Jahressechstel) and are not credited against it.

Allowances and bonus payments not covered by this shall be taxed according to the standard tariff taxation.

Half tax rate for retired doctors who become active again due to the Corona-crisis

Generally, § 37(5)(3) second sentence of the Income Tax Act (EStG) stipulates that the application of the half-tax rate to the profit from the sale or abandonment of an entrepreneur remains in force if the total turnover does not exceed EUR 22,000 and the total income from the activity exercised does not exceed EUR 730 in a calendar year.

Doctors who have reached the age of 60 and have sold or given up their business and ceased their gainful employment, and who during the COVID-19-pandemic in 2020 will again work as a doctor are also not prevented from exceeding the limits of the application of the half-tax rate.

Amendments to the Stamp Duty Act 1957

In addition to the exemption from fees and federal administrative charges for deeds and official acts already decided in the 2. COVID-19 Act, legal transactions that are necessary for the implementation of measures in connection with the management of the COVID-19-crisis situation are now exempted from the percentage fees. In particular, this is intended to exempt guarantees and lease agreements concluded as a result of the COVID-19-crisis situation. This regulation will enter into force retroactively on 1 March 2020 and will cease to apply on 31 December 2020.

Amendment of the Fiscal Criminal Code

In addition to the suspensions of the period for objection (§ 145 (1) FinStrG, as all other §§), the period for appeal (§ 150 (2)) and the period for filing an appeal (§ 150 (4)) already decided in the 2. COVID Act, the course of the period for filing an application for reopening of the proceedings (§ 165 (4)), the period for filing an application for restitutio in integrum (§ 167 (2)) and the period for filing objections for the minutes (§ 56b (3)) are now also suspended if the period has not yet expired on 16 March 2020 (thus retroactively) or has started to run between 16 March 2020 and 30 April 2020. The periods shall begin to run anew on 1 May 2020.

Under the new para 3a of § 265a FinStrG, the chairman may initiate the deliberation and adoption of resolutions by the senate using suitable technical means of communication if a hearing before a panel of experts (§ 125(3)) or before a senate for fiscal criminal law at the Federal Finance Court (§ 160(2) and (3) is omitted by 30 September 2020. In addition, the chairman may replace the discussion and adoption of a resolution by obtaining the consent of the other members of the Senate to a draft decision by way of circulation.

Amendment of the alcohol tax act

The new provision in § 116l alcohol tax act introduces a temporary special regulation for the production of disinfectants by a business of use (Verwendungsbetriebe). On application, a tax already paid is refunded if a product used for the production of biocidal products or comparable disinfectants for hygienic hand disinfection and surface disinfection has been incorporated into a business of use (§ 11) and the customs office is provided with proof of tax payment and use for preferential purposes.

This special regulation comes into force on 1 March 2020 and expires at the end of 31 August 2020.

Postponement of the organisational reform of the financial administration

Due to the COVID-19-crisis, it was not possible to complete the preparatory work required for the organisational reform of the federal tax administration in time before 1 July 2020. The entry into force of the organisational reform of the federal tax administration will therefore be postponed until 1 January 2021.

This postponement requires amendments to the Federal Fiscal Code (BAO), the Fiscal Criminal Code (FinStrG), the Federal Act on Personnel Measures Resulting from the Modernisation of the Tax and Customs Administration, the Federal Act on the Establishment of an Anti-Fraud Office, the Tax Administration Organisation Act, the Financial Organisation Reform Act and the Financial Criminal Cooperation Act.

COVID-19 also requires changes in the transparency database

The fight against the COVID-19 crisis is leading to extensive government support (cash benefits, guarantees, warranties, indemnities, benefits in kind, other benefits). These must be made visible in the transparency database.

The legislator creates the corresponding administrative precautions for the purpose of traceability (own service offers, which are to be marked with "COVID-19", additional service types).

Notification periods according to the Beneficial Owner Register Act (Wirtschaftliche Eigentümer Registergesetz) are suspended

In times of crisis it is important to give companies air to breathe. Upcoming deadlines should therefore be extended if possible. We already know this from previous COVID-19 provisions.

Now the four-week periods for initial notifications, notifications of changes and update notifications to the Beneficial Owner Register will also be suspended. In detail, the suspension applies to deadlines which had not been expired by the end of 16 March 2020 or which start to run between 16 March 2020 and the end of 30 April 2020. The aforementioned periods shall begin to run again on 1 May 2020.

However, the Federal Minister of Finance is authorised to extend the suspension of the deadlines in the event of a longer lasting restriction of daily life by measures of the Federal Government until 31 December 2020 at the latest, insofar as this is necessary to prevent and combat the spread of COVID-19.


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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