Companies in all sectors can apply for business cost support if their turnover has decreased due to COVID-19
The support for business costs is intended for all companies whose turnover has decreased by at least 30 per cent due to the COVID-19 pandemic. On 18 December 2020, the Government issued a decree on the sectors that can apply for support without providing further justification. If a company does not operate in one of the sectors defined in the decree, it must justify the need for support and provide an account of the loss of turnover due to COVID-19.
“The listing of sectors in the Government decree will help speed up the processing of companies’ applications at the State Treasury. Companies can apply for the support if their turnover has decreased by 30 per cent during the reference period,” says Minister of Economic Affairs Mika Lintilä.
The list in the decree covers those sectors whose turnover decreased by at least ten per cent between June and October 2020 compared to the corresponding period in 2019. The decrease in companies’ turnover will also be calculated based on these reference periods. For companies established on or after 1 May 2019, the reference period is from 1 January 2020 to 28 February 2020.
Amendments to the Act on Support for Business Costs entered into force on 15 December 2020. Companies can apply for support from the State Treasury starting on 21 December 2020. The application cycle will be open until 26 February 2021.
Listing of sectors helps in targeting support
The listing of sectors aims to ensure that the support is targeted specifically to companies affected by the pandemic. This will help to better take into account other reasons for a decrease in a company’s business. These may include seasonal fluctuations or declines in turnover for reasons other than COVID-19.
This second round of applications for support covers 220 sectors, whereas 365 were listed in the first round. The listed sectors now include hotels, catering services, staff and institutional canteens, and certain fields in the arts, entertainment and recreation.
Sectors no longer listed in the second round include restaurants, cafes and bars, hairdressers and beauty care services, along with certain kinds of retail and manufacturing businesses. However, companies in these sectors can still apply for cost support if their turnover has decreased due to COVID-19 by at least 30 per cent between June and October 2020 compared to the corresponding period in 2019. Restaurants have also received separate support through an earlier programme.
The sectors listed in the decree were determined based on VAT data from the Tax Administration. Cost support cannot be granted to businesses in primary agricultural production, fisheries and aquaculture, as these sectors are subject to separate state aid rules that are the responsibility of the Ministry of Agriculture and Forestry. Business cost support also covers foundations and associations engaged in business activities.
Business cost support aims to prevent bankruptcies
Due to the reduced turnover caused by the coronavirus pandemic, companies have struggled to pay inflexible business costs and payroll costs. The support is compensation for these costs, but it does not compensate for a decrease in turnover. The objective of business cost support is to help companies cope with the difficult economic situation caused by COVID-19.
The State has reserved EUR 550 million for the second round of applications, but the estimate of the appropriation needed is uncertain and may not be used in whole. The use of the appropriation depends on the number of companies meeting the criteria for support and their costs.
Jenny Hasu, Special Adviser to the Minister of Economic Affairs, Ministry of Economic Affairs and Employment, tel. +358 295 047 213
Sampsa Nissinen, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 047 189