On Friday 12 June, the Kern, expanded to include the parties supporting the federal government, reached an agreement on a series of additional support measures.
A first series of measures had already been adopted on 6 June. At that time, it was agreed to identify the measures that could supplement the initial package.
The new support measures contained in the agreement can be divided into two categories.
1. Investment support measures
- Strengthening capital through a tax shelter for SMEs
In order to support the financing of SMEs and capital investments, it was decided to expand the existing tax shelter for start-ups and scale-ups. The aim is to open up the tax shelter for SMEs affected by the Covid-19 crisis. Managers of SMEs may now also benefit from this measure. This scheme is intended to apply until the end of the year.
- Encouraging investment by increasing the investment deduction
In order to prevent SMEs and the self-employed from stopping their planned investments, it was decided to increase the investment deduction to 25%. This means that a company making investments between 12 March and 31 December 2020 will be able to deduct, in addition to depreciation, 25% of those investments from the taxable base. In addition, the stock of investment deductions increased by 20%, built up during the 2019 financial year, may be carried forward for two years instead of only one year.
- Suspension of the VAT advance payment of December 2020
Since the beginning of the COVID-19 pandemic, many companies have experienced difficulties in paying their bills. In order to give those companies additional breathing room, it was decided to suspend the payment of the VAT advance payment of December 2020 for one month.
- Support for the events sector
The events sector has been particularly affected by the COVID-19 crisis. Currently, 50% of event costs are deductible in both the natural person and corporate income tax schemes. In order to provide the events sector with breathing room, 100% of event costs will be deductible until the end of this year. This will serve to prevent the massive postponement of events to next year, which could lead to added difficulties for an already heavily-affected sector.
2. Social security measures
- Introduction of an adapted Corona unemployment scheme
The temporary unemployment scheme for reasons of force majeure linked to the Coronavirus was already extended last week until 31 August (and until the end of 2020 for sectors experiencing difficulties).
A new temporary unemployment scheme will be introduced in order to ensure the transition between the temporary unemployment scheme for reasons of force majeure linked to the Coronavirus and the traditional temporary layoffs scheme. The “transitional” temporary layoffs scheme may be used if the company is able to demonstrate a 10% decrease in its turnover. The worker will attend two days of training per month of unemployment and will continue to receive unemployment benefits equal to 70% of their last capped wages.
- Reduced working hours for companies undergoing restructuring and struggling companies
Companies undergoing restructuring and struggling companies will be given the possibility of reducing their working hours until they can resume normal operations, in order to avoid lay-offs. This can be done through a collective reduction of working hours, time credit or end-of-career time credit, with an allowance from the age of 55.
- Extension of the Corona parental leave
The Corona parental leave is extended to 30 September 2020. The allowance is increased to 150% for single-parent families and families with a disabled child.
- Reimbursement of teleworking expenses
The reimbursement of expenses incurred by teleworkers, up to a maximum amount of 127 Euros per month, will be made easier to claim in order to promote a better work-life balance in the future.
We will update you on these measures as soon as we have any new information.
Source: joint press release of 12 June 2020 on new measures for the third part of the Federal Social and Economic Protection Plan.
For more information on the social security measures: contact the "first points of contact" in your region.