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Government opens November rescue fund | Free Press

Berlin (dpa) – “Temporarily closed” has been the motto since Monday, not only in many pubs and restaurants. Hotels can no longer accept tourists, and museums, cinemas and theaters are also closed.

Germany in partial lockdown: A few days after the harsh measures began, the federal government now announces exactly what the promised aid for November will look like.

During the Corona crisis, the federal government has already launched programs worth billions to maintain businesses and jobs. Time and again, however, there was criticism that the aid was not sufficiently targeted. The government does not want to “spoil” the November aid, as Economy Minister Peter Altmaier (CDU) put it. It reached an agreement with Finance Minister Olaf Scholz (SPD) on the details of the aid.

“This crisis is about coming together in solidarity so that we can continue to overcome the pandemic comparatively well,” Scholz said Thursday. And Altmaier: “We are not going to leave our companies and their employees alone in this serious situation.”

The big question, however, remains open: when exactly does the money flow? Scholz said aid should reach those affected “quickly.” Altmaier said that advance payments should be made as soon as possible, if possible by the end of November 2020. Summary of attendance:

SCOPE OF HELP

The aid is expected to have a financial volume of around 10 billion euros. The money should come from the existing bridge aid pot. These are grants primarily for small and medium-sized businesses that have large sales losses during the Corona crisis. Of the 25,000 million euros allocated to this, so far only around 1,500 million euros have been requested. The associations criticize an excessively bureaucratic procedure. The government notes that many industries have recovered since the close of spring.

WHO WILL RECEIVE NOVEMBER HELP:

The federal and state governments agreed to restrictions to break the second crown wave. According to the Ministry of Finance and Economy, companies, freelancers, associations and institutions directly affected by temporary closures can request the aid. The prerequisite is that business operations had to cease based on federal and state government resolutions on October 28. Hotels count as directly affected businesses.

Businesses that are indirectly affected are also supported, such as bar suppliers. In principle, the aid is available to all companies, but they must “verifiably and regularly” generate 80 percent of their sales with companies directly affected by the closures. So the big arithmetic should start now with these companies. The rule also generates criticism.

AMOUNT OF FINANCING:

With November’s help, grants are awarded per closing week amounting to 75 percent of average weekly turnover in November 2019, up to an upper limit of € 1 million, to the extent permitted by margin maneuvering under the EU state aid law. Therefore, the government technically talks about weekly sales, because it may be purely theoretical that the federal and state governments will lift the closures in mid-November, which, however, is not to be expected.

Grants of more than € 1 million must be approved by the EU Commission. Brussels pays special attention to large companies so that competition is not distorted.

Freelancers, that is, sole proprietorships without employees, such as artists, can also use the average turnover in 2019 as a comparison. In doing so, the government is accommodating musicians and actors, for example, whose incomes often fluctuate and who had no sales in November 2019.

A special rule applies to young companies that started their business after October 31, 2019. You can also use October 2020 as a comparison or an average of sales since the company was founded.

CREDITS

Other government benefits that companies receive in November are taken into account. This is especially true for benefits such as long-term bridging benefits or short-term employment benefits.

A special rule also applies if businesses don’t shut down completely. If sales are achieved in November despite the general close, up to 25 percent of comparable sales will not be counted. This is to prevent companies from making a profit.

For restaurants the following applies: The refund is limited to sales with the full VAT rate. This means that meals sold at out-of-home businesses are removed from the overall bill so that restaurants can expand this struggling business.

The Ministry of Finance and Economy gave an example: in November a year ago, a pizzeria had a turnover of 8,000 euros in the restaurant and a 2,000 euros through the take-out business. Now he receives a November aid of 6000 euros, 75 percent of the turnover within the restaurant. That’s less than in other industries because the comparative figure is not total sales. In return, the pizzeria should be able to achieve significantly more than the 2,500 euros generally allowed in sales with delivery services in this individual case in November 2020 without the subsidy being reduced.

APPLICATIONS AND PAYMENT

Applications will be sent in the coming weeks through the national bridge aid platform. This still needs to be changed accordingly. As with bridging assistance, requests must be submitted by a tax advisor or auditor; the federal government wants to prevent abuse. The payment itself is made by the federal states. There is an exception for the self-employed who do not request financing of more than 5000 euros. You should be able to submit requests directly.

REVIEW

Some industries are disappointed. Michael Oppermann, managing director of the Federal Association of Taxis and Car Rentals, criticized the taxi industry’s turnover by 80 percent due to the ordered measures, but only those who have restaurants, tourism or organizers as customers get help. “But our clients are his guests, who of course are now absent.” Oppermann warned of a wave of bankruptcies. There was also criticism from the German Travel Association – travel agencies and tour operators fell for the rust of the November aid package.