Background and recent improvements to Überbrückungshilfe III (corona subsidy)

Who can apply for the subsidy?

Companies, solo self-employed persons, and freelancers with annual sales of up to EUR 750 million in 2020, as well as startups founded by October 31, 2021, non-profit companies, church-related companies, and organizations from all sectors. The EUR 750 million revenue cap does not apply to companies affected by the lockdown.

Prerequisite is Corona-related revenue declines of at least 30 percent in each month for which the fixed-cost grant is requested. The reference month in 2019 is decisive for the comparison. Special rules apply to companies established between January 1, 2019 and October 31, 2020 (previously April 30, 2020) and in justified cases in the event of exceptional operating circumstances. Companies receiving November and/ or December assistance are not eligible to apply for these months.

What and how is the subsidy provided?

The bridging allowance is used to subsidize fixed operating costs.

Reimbursed for the period November 2020 through June 2021:

  • up to 100 percent (previously 90 percent) of eligible fixed costs in the event of a more than 70 percent drop in revenue
  • up to 60 percent of eligible fixed costs in the event of a 50 percent to 70 percent drop in sales
  • up to 40 percent of eligible fixed costs in the event of a sales slump of at least 30 percent.
    (Sales slump in each case compared to the same month in 2019). Startups can use other sales figures.

Will a down payment be made?

Eligible applicants receive a down payment of 50 percent of the requested funding (maximum EUR 100,000 per month or up to EUR 800,000 in total).

What are current extensions to Überbrückungshilfe III?

As of April 13, 2021, the benefits of Überbrückungshilfe III have been enhanced to include the following:

  • Equity subsidy for companies with a sales slump of at least 50 percent in at least three months in the period from November 2020 to June 2021.
  • For businesses with a revenue slump of more than 70 percent: increase fixed cost reimbursement to 100 percent.
  • Eligibility for church-related businesses and startups founded by Oct. 31, 2020.
  • Special depreciation allowances for more merchandise (previously only winter merchandise and perishables) extended to manufacturers, wholesalers and professional users.
  • For companies in the event, culture and travel industry, in addition to the general personnel cost allowance, a start-up subsidy of 20 percent of the payroll that would have been incurred in the corresponding reference month in 2019 is introduced for each subsidy month. The maximum total funding amount of this start-up aid is EUR 2 million.
  • The event and culture industry can additionally claim cancellation and preparation costs incurred up to 12 months before the start of the planned event date.
  • Applicants will be allowed to choose alternative comparative periods to determine the 2019 revenue shortfall in justified cases of exceptional operational circumstances.
  • Businesses and solo self-employed individuals will be given a subsequent right to choose between New Start Assistance and Bridging Assistance III at the time of the final settlement.

Application for Überbrückungshilfe III

Applications must be submitted until August 31, 2021. Applications for amendments can be submitted by reviewing third parties since April 27, 2021. Applications are submitted exclusively by so-called reviewing third parties (tax consultants, auditors, etc.). Costs for the application by reviewing third parties are subsidized within the framework of Überbrückungshilfe III.

Please do not hesitate to contact us.

Source: https://www.ueberbrueckungshilfe-unternehmen.de/

Photo: Alex Azabache, Unsplash

Disclaimer: We assume no liability for the accuracy or completeness of the information. The information provided here does not constitute a recommendation for action.

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