Lockdown – the strengthening of governmental emergency aid for businesses

26 November 2020
Antoine Rousseau

The second lockdown has forced the government to strengthen emergency and support measures for companies. These exceptional measures complement the specific sectoral and regional aid already put in place to deal with the economic slowdown of businesses, weakened by the pandemic’s first wave.

1. A widen Solidarity Fund

Businesses with less than 50 employees that are administratively closed due to lockdown will receive up to €10,000 per month in aid to make up for their loss of turnover. Depending on their sector of activity, businesses that remain open but suffering a loss of more than 50% of their turnover may also receive a State allocation between €1,500 and €10,000 per month.

2. Exemption and deferral of social security contributions

Companies with less than 50 employees that are administratively closed due to lockdown may benefit from (i) a total exemption of employers’ social security contributions and (ii) an aid for the payment of social security contributions of 20% of the total payroll. Other employers may request a payment deferment of their contributions for all November 2020 deadlines. Social contributions for the self-employed will not be collected for the month of November.

3. Tax credit for commercial landlords

In order to reduce rents, a tax credit for commercial landlords will be implemented for owners who waive the right to receive payment of rent for at least one month’s rent between October and December 2020. The reduction will represent 30% of the amount of rent waived.

4. The extension of the exceptional Partial Business Activity Regime

The furlough scheme has been extended until December 31, 2020. No remaining amount will be due by the employer of protected sectors (tourism, events, culture, sport) or those subject to administrative closures due to the lockdown. Employees will be paid 84% of their net salary.

5. Strengthening of State-guaranteed loans

The State-guaranteed loan regime is extended from December 31, 2020 to June 30, 2021. Amortization of said loans may be spread over up to 5 additional years, with rates for SMEs ranging from 1 to 2.5%. The State will also be able to grant direct loans to VSE/SMEs that have not been able to obtain a State-guaranteed loan.

Antoine Rousseau, Partner.