COVID-19 news: UPDATE
News – 23.04.2020
The Austrian government has approved further tax measures, which are summarized in the following update. For the details on the first package of tax and other measures, please refer to our COVID-19 news dated 26 March 2020.
1 Tax Law
Tax exemption for subsidy payments
The Austrian government has approved several state aid measures for Austrian taxpayers in order to cope with the COVID-19 pandemic. Payments granted under the following programmes shall be tax exempt as from 1 March 2020:
- the COVID-19-crisis management fund (COVID-19-Krisenbewältigungsfonds);
- the hardship fund (Härtefallfonds);
- the Corona Crisis Fund (Corona-Krisenfonds);
- programmes established by the federal states, municipalities and legal interest groups for purposes of coping with the COVID-19 crisis.
Exemption from stamp duties
Austrian stamp duties are levied on certain legal transactions documented by deed. The rates vary between 0.8 % and 2 %; some stamp duties are levied as a fixed amount. With effect from 4 April 2020, legal transactions that are necessary for the implementation of COVID-19 related measures have become exempt from stamp duties. In fact, the exemption covers guarantees which shall ensure the liquidity of companies.
Summary of major tax-related relief and simplification measures
- Advance payments on corporate income tax and income tax for 2020 can be reduced in part or in total.
- Payment of taxes can be, upon request, deferred or made in instalments until 30 September 2020.
- Relief from late payment penalties has been already fixed.
- Tax authority will refrain from late interest assessment provided that the taxpayer can substantiate that he has faced (acute) liquidity shortage.
- The deadline for submitting annual tax returns for 2019 has been moved to 31 August 2020.
- Periods for appeal, objection and submission as well as deadlines for appealing against measures which were available on 16 March 2020 or started in the period 16 March to 30 April shall be interrupted until 1 May 2020.
- No fees or federal administrative charges for the application for support services shall be levied.
2 Corporate Law
Shareholder meetings and resolutions
Shareholder meetings of Austrian public limited companies (Aktiengesellschaften), private limited companies (Gesellschaften mit beschränkter Haftung) and cooperatives (Genossenschaften), which must generally take place within 9 months following the end of the business year, can be held within a 12-month period. The deadline extension does not, however, apply to the SE and the SCE.
The legal possibility of virtual shareholder meetings and board management meetings (please refer to our COVID-19 news dated 26 March 2020) has been extended to mutual insurance associations (Versicherungsvereine auf Gegenseitigkeit), small insurance associations (kleine Versicherungsvereine) and savings banks (Sparkassen).
In general, the annual financial statements (including the consolidated financial statements, group management report and other accounting documents) must be submitted to the supervisory board within 5 months following the business year end. The deadline has been extended for another 4 months if the legal representative is unable to comply with the reporting obligation due to the COVID-19 pandemic (e.g. submission by 30 September 2020 for business year end 31 December 2019).
Further extension has been approved for the disclosure of financial statements to the commercial register, which must be, under normal circumstances, done within 9 months following the business year end. The extended period of 12 months also applies to the report of the supervisory board and the resolution on the distribution of profits.
The relief is, however, eligible only for companies, which were not under obligation to have the financial statements prepared by 16 March 2020 and in fact, applies only if the business year has ended on 30 October 2019 or later. The extension shall cease to apply on 31 December 2020 and may be, thus, applied to financial statements with a balance sheet date before 1 August 2020. Thus, a company with a balance sheet date of 31 July 2020 must prepare the financial statements before 30 April 2021 and comply with the disclosure obligation until 31 July 2021. The relief however applies only if the company is not able not meet the deadlines due to the COVID-19 pandemic.
If financial statements should have been prepared before 16 March 2020, the relief is not available. The disclosure period has been, however, extended by 40 days.
3 Civil Law
Use of electronic communication for public notaries
Under Austrian civil law rules, certain legal contracts must be, in order to become legally effective, concluded by means of a notarial deed or notarial certification; this requires a physical meeting with a notary public. In order to limit the spreading of the Coronavirus, it shall be now possible to perform the notarial act by means of electronic communication. The latter must be a real-time communication including optical and acoustic two-way connection. This simplification applies until 31 December 2020.
- Termination restrictions
Landlords are not allowed to terminate a rental agreement by means of a clearance action (Räumungsklage) if tenants are in default with respect to the rent payments for the period of 1 April 2020 to 30 June 2020. In order for the restriction to become applicable, the default must be caused by the COVID-19 pandemic. In addition, the landlord may not legally enforce a default payment for the period of 1 April 2020 to 30 June 2020 until 1 January 2021 and may not offset the defaulted amounts against the tenant’s deposit.
- Special extension of rental agreements
Fixed-term rental agreements, which are subject to the Tenancy Law Act (Mietrechtsgesetz) must be generally concluded for a minimum period of 3 years. According to the relief granted by the law, rental agreements that expire or would have expired between 30 March 2020 and 1 July 2020 may be extended in writing until the end of 2020 or an earlier date (instead of the minimum term of 3 years).
In case of default, the claim for late payment interest shall be limited to a maximum of 4 % p.a. In addition, debtors shall be released from paying debt enforcement costs. The relief is, however, subject to the following requirements, which must be all met:
- the payment becomes due within the period of 1 April 2020 to 30 June 2020;
- the underlying agreement was concluded before 1 April 2020;
- the debtor’s credit rating has been negatively affected by the COVID-19 pandemic (e.g. a waiter or a tour guide whose employment has been terminated due to the lockdown of the restaurant or tourism business).