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Draft bill out for comments: Another round of business cost support to open and new compensation for large companies under preparation

Ministry of Economic Affairs and Employment
18.5.2021 16.07 | Published in English on 20.5.2021 at 15.14
Press release

A fourth application round for business cost support for March–May will be organised for companies. The conditions of aid would remain unchanged. In addition, large companies would receive separate compensation if their premises were closed by law or by order of an authority due to the COVID-19 epidemic. The Government currently negotiates with the European Commission about the terms and amount of closure compensation.

The Ministry of Economic Affairs and Employment invites comments and opinions on the proposed amendments to the Act on Support for Business Costs by 20 May 2021. The aim is to submit the bill to Parliament for consideration in May. The Act is due to enter into force on 1 July 2021. The State Treasury would start accepting applications for the fourth round of business cost support and closure compensation for large companies in August.

“The coronavirus pandemic has severely restricted business activities this spring, making a fourth round of business cost support necessary. This is one way the Government helps companies cope with the pandemic. We are also currently negotiating with the European Commission to offer closure compensation to large companies, which were previously excluded from such support because of the EU’s State aid rules,” says Minister of Economic Affairs Mika Lintilä.

Terms of business cost support to remain unchanged

The fourth round of business cost support is intended for companies whose turnover has fallen by more than 30% due to the coronavirus pandemic between 1 March and 31 May 2021, compared with the corresponding period in 2019.

All companies can still apply for business cost support. The Government will separately issue a decree on the sectors that can apply for support without providing further justification. These include sectors where turnover has decreased by at least 10% during the period. If a company operates in a sector not defined in the decree, it will have to justify the loss of turnover due to COVID-19.

Sole entrepreneurs could still apply for business cost support. The support would amount to at least EUR 2,000 if the conditions were met. Maximum amount of aid would remain at EUR 1 million.

Closure compensation for large companies under preparation

The Government currently negotiates with the European Commission about closure compensation for large companies. The compensation would apply to companies that employ at least 50 people and that have been ordered to be closed by law or order of an authority. Such companies include restaurants and other food and beverage service businesses that were temporarily closed to customers under the Act on Accommodation and Catering Operations.

Compensation could also be paid to companies, which the municipality or the Regional State Administrative Agency has closed under the Communicable Diseases Act. Such establishments include sports facilities, gyms, public saunas, swimming pools, spas and indoor playgrounds.  

Large companies would be compensated for 70% of the difference between the costs and revenues during the closure period. In order to claim compensation, the company’s turnover must have decreased by at least 30% during the closure period compared with the corresponding period in 2019. Insurance compensation related to the closure period and the coronavirus pandemic as well as State aid received for the same costs would be deducted from the aid.

In its application, a company should include an auditor’s statement on the turnover, profits and costs during the support period, turnover of the reference period, insurance compensation received, and State aid received.  

The closure compensation for large companies would be subject to a new EU State aid scheme where the maximum amount of subsidies related to the coronavirus pandemic is EUR 10 million. The granting of business cost support would also be possible under the scheme. The aid scheme still requires the final approval of the European Commission.

Small and micro-sized companies can already apply for closure compensation at the State Treasury. The first application round for business cost support took place in July–August 2020. The second round began in December 2020 and ended in February 2021. The third application round is currently ongoing and will end on 23 June 2021.

Inquiries:

Mikko Huuskonen, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 506 3732
Maija Lönnqvist, Chief Specialist, Ministry of Economic Affairs and Employment, tel. +358 29 504 7105

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