Take advantage of the last days of investment support

Take advantage of the last days of investment support

A visit to the salt office is more productive than complaining about Corona. The Viennese tax consultant Heinz Harb, managing director at LBG Austria, puts it this way: “Companies have no choice but to make the best possible effort through this phase.” To ensure that companies do not run out of strength, the Austrian government has woven a network of bridging aid that is very helpful, but also very opaque. The most urgent issue for all companies at the moment is the investment bonus, which won't be open for long: it must be applied for by February 28th at the latest. 

There are relaxations

For Heinz Harb, the installation of the investment bonus is one of the “successful measures in the Corona aid offer”. He observes a boost in motivation influenced by the bonus. Many people use the funding incentive for early investments. “The resulting corporate spending will provide important impetus, especially in the coming months, to keep the economic cycle going.” With the Covid-19 investment bonus, investments of between 5,000 and 50 million euros are supported with a non-repayable grant of seven percent to 14 percent (depending on the investment). The application for the investment bonus must be submitted electronically to the funding manager of Austria Wirtschaftsservice (aws) by February 28, 2021 at the latest. “Initial measures” such as ordering, signing the purchase contract or starting services were originally supposed to take place by February 28, 2021. The government has relaxed the time requirements here: With the Council of Ministers decision of January 20, 2021, the deadline for the so-called “first measure”, which marks the start of the investment, is extended to May 31, 2021. 

More time for implementation

This was no surprise, says Heinz Harb: “Otherwise the companies would not have enough time to adequately prepare their projects.” Recently, it was not always possible to receive a detailed offer at short notice from a plumber, electrician or other trade or supplier. However, the LBG managing director points out, “the application deadline remains February 28, 2021 at the latest,” and he expects a strong application finish by then.

The construction industry and construction-related companies in particular are currently receiving a lot of inquiries. At Christmas it was already clear that in many industries it would no longer be possible to start orders for new plans before March. Especially in the case of commercial photovoltaic systems and thermal renovations, there is a “special boom” due to the bonus.  In fact, the demand from companies for the bonuses is enormous: budgeted at one billion euros in August, the funding pots have now been increased to three billion euros.  At the end of January, the aws received 80,000 applications for funding, which, with a funding amount of 2.8 billion euros, will trigger an investment volume of almost 30 billion euros. 

That's what the bonus is for

Any Austrian company can apply for the investment bonus, regardless of its legal form. The target group ranges from one-person companies to large industries, whereby the investment must have a contract value of at least 5,000 euros. The premium amounts to seven percent of the eligible investment amount and increases to 14 percent for investments in digitalization, greening and health (see for a detailed list lbg.at ). 

The focus is always on questions about real estate-related plans such as workshop expansions or building repairs: The acquisition of company buildings is eligible for funding if a property developer is involved. However, the basic share must be excluded. Construction and renovation of company buildings are supported by aws as long as they are attributable to the company. If people also live in parts of the company building, then the corresponding share of the project costs must be deducted. If there is no property developer as the seller during the purchase or if a property is only purchased for company building projects, the investment bonus does not apply. The aws bridging guarantee, another Corona aid measure, has no effect on the aws investment bonus. 

What to do

The “initial measures” that must be taken by the end of May are understood by aws to be “orders, deliveries, the start of services, down payments, payments, invoices, the conclusion of a purchase contract or the start of construction of eligible investments.” For an investment volume of up to 20 million euros (excl. VAT), commissioning and payment must take place by February 28, 2022 at the latest. If the project is not completed, the funding will be reduced pro rata. If you believe the bush drums, this commissioning date for February next year is under discussion. It is also expected to be pushed until the end of May. Let's take a look.