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Reduced administrative burden for small food service businesses in preparing financial statements

Ministry of Economic Affairs and Employment
Publication date 26.11.2020 13.38
Press release

The Government proposes a legislative amendment concerning the support and compensation paid to food and beverage service sector businesses. The amendment will reduce the administrative burden and costs of small companies by simplifying the accounting obligations regarding compensation. The amendment is based on the European Commission’s decision to relax the State aid rules.

A small company would no longer be required to prepare a special financial statement on the results of the closure period and the reference period, as required by the Act in force now. As a result, a small company would avoid the additional cost of preparing such accounts and auditing them.

The amendment does not require any special measures from food and beverage service businesses. It is sufficient that the financial statement indicates the company is a small enterprise within the meaning of the amendment. Food and beverage service businesses, which have already been granted compensation, could also make use of the relief in preparing their financial statements, as the amendment would apply to them too.

The Government submitted the proposal to Parliament on 26 November 2020. The Act is expected to enter into force as soon as possible.

Administrative burden and costs have arisen from EU State aid rules

Restaurants were closed to customers between 4 April and 31 May 2020 to prevent the spread of the coronavirus. When approving the restrictions, Parliament required compensation for reasonable costs and measures to mitigate the effects of the restrictions. The act on support for job retention and re-employment in the food and beverage service sector and on compensation for the restriction of activities entered into force on 5 June 2020.

The entry into force of the Act was conditioned on the European Commission approving the aid scheme contained therein under the EU State aid rules. The Commission required that the compensation granted to a food and beverage service sector business is at most the amount by which the losses accrued during the closure period exceed the result of the reference period. Because of this requirement, small companies would also have had to include special profit and loss accounts in their financial statements for the closure and reference periods. The preparation of such accounts requires exceptional computational work, which means that preparing the accounts and their auditing would have caused significant costs for small companies in relation to the compensation they received.

However, the European Commission amended its rules on State aid on 2 July 2020. It is possible to waive the requirement to provide special accounts in the financial statements by amending the Act so that the new EU rules will apply to small and micro-sized food and beverage service sector businesses.

Most of the food service businesses granted compensation are small and micro-enterprises

The KEHA Centre has granted compensation for the restriction of business activities to 7,000 companies totalling approximately EUR 90 million. The majority of them are small and micro-enterprises, to which the legislative amendment will apply.


Mika Björklund, Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 063 586
Timo Kaisanlahti, Chief Specialist, Ministry of Economic Affairs and Employment, tel.  +358 295 047 139

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