To help troubled companies in the period from June to August 2020, a bridging aid was introduced in the wake of the Corona crisis. In the meantime, a second phase of the bridging aid has been decided by the federal government, which covers the funding months September to December 2020.
While many restrictions are now being relaxed, many companies still have some or all of their business operations restricted due to the Corona crisis. The bridging aid adopted is intended to help small and medium-sized enterprises affected by constraints or closures. For this reason, further liquidity support was granted for the months of June to August 2020 (phase 1). The program thus follows on temporally from the emergency aid program of the federal government (March to May 2020). The BMWi has published detailed FAQ's on this topic.
The services received as bridging aid are taxable and, in accordance with the general tax regulations, must be taken into account as turnover within the framework of the determination of profits.
Application deadline for phase 1 extended
The end of the application period for phase 1 bridging assistance was initially set to 31.8.2020 laid. However, this deadline was later extended to 30.9.2020 extended. The payment period for phase 1 ends on the 30.11.2020.
New: Applications for phase 2 of bridging assistance
The 2. Phase of the bridging assistance covers the funding months September to December 2020. Applications for 2. Phase can probably be put in place from October.
Who is entitled to file a petition?
- Companies and organizations from all sectors of the economy, as long as they do not qualify for the Economic Stabilization Fund and as long as they have had to cease all or a significant part of their business activities on a permanent basis as a result of the Corona crisis;
- solo self-employed persons and self-employed members of the liberal professions in their main occupation, if they have had to cease all or a substantial part of their business activities on a sustained basis as a result of the Corona crisis.
A cessation of business in whole or in substantial part as a result of the Corona crisis is presumed if sales for the months of April and May 2020 combined have plummeted by at least 60 percent compared to April and May 2019.
Attention (update): Companies that, due to the strong seasonal fluctuation of their business, achieved less than 5 percent of 2019 annual sales in April and May 2019 may be exempt from the sixty percent sales decline condition.
Eligible to apply are also, in the above sense, non-profit companies and organizations affected by the Corona crisis, regardless of their legal form, which are permanently economically active on the market (z. B. youth training centers, inter-company vocational training centers, family holiday centers). For these companies and organizations, revenue (sales generated on the market, membership fees, donations and government grants) is used instead of sales revenue.
When is the application excluded?
The following cases are not eligible to apply for bridge assistance:
- not registered with a German tax office,
- no domestic permanent establishment or registered office,
- Qualifies for the economic stabilization fund (in the last two fiscal years closed on the balance sheet prior to 1.1.2020 more than 43 Mio. EUR balance sheet total and more than 50 million. EUR sales revenue)
- Annual sales of at least 750 million. EUR part of a group of companies that prepares consolidated financial statements or is required to do so under regulations other than tax laws and whose consolidated annual sales reported in the consolidated financial statements in the previous year in which the application is submitted amounted to at least. EUR amounted to,
- on 31.12.2019 already in economic difficulties,
- Establishment only after 31.10.2019,
- Public enterprise (educational institutions of self-government of the economy in the legal form of public corporations are not considered public enterprises),
- non-profit enterprise that is also a public enterprise,
- Freelancing or. Solo self-employment only as a sideline.
Which costs are eligible?
Eligible costs are ongoing fixed costs incurred during the eligibility period that are contractually or officially determined and cannot be unilaterally changed, according to the following list, which is also intended to take into account industry-specific peculiarities.
- Rents and leases for buildings, land and premises directly related to the business activity of the company. Costs for private rooms are not eligible.
- Other rental costs (vehicles and machines used for business purposes, according to their percentage of use determined according to tax regulations)
- Interest expenses for loans and
- Finance charge portion of lease payments
- Expenses for necessary maintenance, servicing or storage of fixed assets and rented assets, including EDP
- Expenses for electricity, water, heating, cleaning and hygiene measures
- Property taxes
- Operating license fees
- insurance, subscriptions and other fixed expenses
- Costs for tax advisors or auditors incurred as part of the application for Corona bridging assistance
- Costs for trainees
- Personnel expenses in the subsidy period that are not covered by short-time allowance are subsidized at a flat rate of 10 percent of the fixed costs of items 1 to 10. Living expenses or an entrepreneur's salary are not eligible for reimbursement.
- In order to take due account of the particular affectedness of travel agencies, commissions paid back to tour operators by owners of travel agencies due to Corona-related cancellations shall also be included in the fixed costs under no. 1 to 12 equated.
The fixed costs of items 1 to 9 must be paid before the 1.3.2020 have been justified. Payments for fixed costs made to affiliated companies or to companies owned or directly or indirectly under the controlling influence of the same person or company are not eligible for funding.
In which amount is subsidized?
The bridging grant reimburses a share of fixed costs, depending on the intensity of the drop in sales in the month of the grant compared to the same month of the previous year:
| Sales slump | Reimbursement of fixed costs |
| more than 70 | 80 % |
| 70 % to 50 | 50 % |
| under 50 % up to 40 | 40 % |
The calculation is made for each month individually. If the drop in sales in an eligible month is less than 40 percent compared to the comparable month, the bridge assistance for that eligible month will not apply.
The maximum subsidy is 50.000 EUR per month. For companies with up to five employees, the maximum reimbursement amount is 3.EUR 000 per month, or 5 for companies with up to ten employees.EUR 000 per month. The maximum reimbursement amounts for small companies may be exceeded in justified exceptional cases. Entrepreneurial wages are not eligible.
How to apply and provide proof?
The application procedure is carried out by a tax advisor or auditor and transmitted directly to the EDP of the granting agencies of the federal states via a digital interface.
New: As announced by the German Federal Bar Association and the German Bar Association on 3.8.2020, lawyers can also apply from the 10.8.2020 to register on the online platform and apply for bridging assistance for their clients.
When submitting the application, a sales estimate for April and May 2020 must be submitted, as well as a sales forecast for the subsidy period applied for. An estimate of the anticipated fixed costs to which reimbursement is sought must also be submitted.
Important: The tax advisor, auditor or lawyer considered in the application procedure
- Advance sales tax returns for the year 2019 and, if available, for the months of April and May 2020,
- Annual financial statement 2019,
- Income resp. Corporate income tax return 2019 and
- Statement of fixed operating costs for 2019,
- Approval notice, if the applicant was granted emergency aid.
If the annual financial statements from 2019 or other required key figures are not yet available, the 2018 annual financial statements or other required key figures from 2018 may be used as a basis. If the company is exempt from the advance sales tax return, the plausibility check is carried out on the basis of the annual sales tax return. In the case of non-profit organizations and associations, the plausibility check must be carried out on the basis of the current accounting records. The specific amount of documentation/data to be submitted depends on the applicant's individual circumstances.
How will the final settlement be made?
If the final sales figures on the actual sales slump in April and May 2020 are available, they will be submitted by a tax consultant or auditor. If it emerges that the 60 percent revenue shortfall has not been achieved, grants already paid out must be repaid.
In addition, when the final sales figures are available, the tax advisor or auditor will inform the company of the actual drop in sales in the respective funding month. If this results in deviations from the sales forecast, excess subsidies must be repaid.
The tax accountant or auditor also submits the final fixed cost statement to the states' appropriations offices. If this results in deviations from the cost forecast, grants already paid out for the affected month of funding must be repaid. Additional payments are excluded.
Attention: the use of bridging aid and other emergency aid from the federal government and the provinces may not exceed the maximum amount permitted by state aid law under the Small Grants Scheme 2020, if necessary. cumulated with the maximum amount of aid under the de minimis regulation, not be exceeded.